Reprieve for Phila. taxi owners after insurer's failure

Taxi owners scrambled Friday to find replacement liability insurance after a major insurer failed, but the threat of immediate grounding of one-quarter of the city's taxi fleet was lifted.

The Philadelphia Parking Authority, which regulates cabs and limousines in the city, will not ground taxis until Tuesday or Wednesday if they do not have new insurance, spokesman Martin O'Rourke said. On Thursday, the PPA had said taxis without adequate insurance would be pulled out of service at 5 p.m. Friday.

An emergency hearing has been scheduled for Monday morning with a PPA hearing officer on the PPA's order requiring owners of 466 of Philadelphia's 1,600 taxis to replace their insurance immediately.

The taxi owners contend their existing insurance continues to provide coverage for 30 days, despite the insolvency of First Keystone Risk Retention Group Inc., a commercial auto insurance company organized and licensed in South Carolina and with headquarters on Aramingo Avenue.

The insurance company was ordered liquidated Tuesday by a South Carolina judge at the request of the state insurance director.

The judge also ordered current insurance policies canceled in 30 days.

"A very large number of the taxi owners have gotten replacement coverage," the owners' attorney, Michael Henry, said Friday. "I don't know if it's more than half, but it's a very large number."

Dennis Weldon, general counsel of the PPA, said: "We're really happy that so many of them are changing insurance. . . . The response has been very positive."

In another development roiling the city's troubled taxi industry, Freedom Taxi Association, which represents about 200 of the city's cabs, filed a civil rights lawsuit Friday in federal court against the PPA, claiming harassment and selective enforcement against Freedom cabs and their owners.

The suit seeks unspecified monetary damages from the PPA and an order requiring the PPA to grant broker's licenses sought by Freedom's owners. The suit says the PPA has refused to act on the applications. Weldon declined to comment on the suit Friday, saying he had not seen it.