844-McLain-Broker Services AgrmSEP 13
BROKER SERVICES AGREEMENT (IIFP 99/00-25)
between ARTHUR J. GALLAGHER & CO., duly authorized o
Florida, whose address is 7380 Sand Lake Road, Suite 390, Orlando, Florida 32819, and M°Lain,
Pierce and Associates, duly author/z. ed to conduct business in the State of Florida, whose address
is 720 S. Park Avenue, Sanford, Florida 32772, hereinafter called the "BR.OKjERS" and City of
Sanford, a pollIdeal subdivision of the State of Florida, whose address is City of Sanford~ 300 N.
Park Avenue, Sanford, Florida 32771, hereinafter called the "CITY."
WITNESSEl/I:
WHEREAS, the CITY desires to retain the services of competent and-qualified
contractors to provide broker services in THE CITY O1: SANFORD; and
WHEREAS, the CITY has requested and received expressions of interest for the
retention of services of contractors; and
~REAS, BP, OIGP,-S are competent and qualified to furnish broker services to the
CITY 'and desires to provide its professional services accordi-g to the tcnns and conctitions
stated herein,
NOW, THEREFORE, in consideration of the mutual understandings and covenants set
forth herein, CITY and Br<OKEES agree as follows:
SECTION 1. SERVICES. CITY does hereby retain BROKERS to x~amish professional
services and perform those tasks as outlined in their response to RFP 99/00-25 (Se~ Attactnnent A)
incorporated herein and made part hereof.
SECTION 2. AUTHORIZATION FOR SERVICES. Authorization for performance
of professional services by the BROKERS under this Agreement shall be in the form of written
Notice to Proceed issued and executed by the CITY.
SECTION 3. COMPENSATION.
(a) The CITY agrees that compensation to BROKERS for the professional services
called for under this Agreement will be provided by the Insurance Companies said BROKERS
will utilize for procurement of insurance coverages. No fees of any type will be paid for by the
CITY for services rendered. Brokers, shall make all materials and records relating to
professional services available to the City for inspection upon request.
(b) CITY agrees to maintain services of said BROKERS for (3) three consecutive years
with an annual option in year (4) four and in year (5) five.
SECTI.ON 4. RESPONSIBILITY OF BROKERS.
(a) BROKERS shall be responsible for the professional quality, technical accuracy and
the coordination of all plans, studies, reports and other services related to the Risk Management
Program(s) furnished by the BROKERS under this Agreement. BROKERS shall, without
additional compensation, correct or revise any errors or deficiencies in their services.
(b) Neither the CITIES review, approval or acceptance of, any of the services required
shall be construed to operate as a waiver of any rights under this Agreement or of any cause of
action arising out of the performance of this Agreement and the BROKERS shall be and remain
liable to the CITY in accordance with applicable law for all damages to the CITY caused by the
BROKERS performance or non-performance of any of the services furnished under this
Agreement.
SI~CTION 5. OWNERSHIP OF DOCUMENTS. All. deliverable reference data,
survey data, plans and reports that result from the BROKERS services under this Agreement
shall become the property of the CITY. No changes or revisions to the documents furnished by
BROKERS shall be made by CITY or its agents without the written approval of BROKERS.
SECTION 6. TERM. This Agreement shall take effect on the date of its execution by
CITY and shall remain in effect for a period of three (3) years. At the option of the CITY, this
Agreement may be renewed for two (2) additional terms of one (1) year each.
SECTION 7. TERMINAITON.
(a) The CITY may, by written notice to the BROKERS, terminate this Agreement, in
whole, or in part, upon a 90-day notice because of the failure of the BROKERS to fulfill
BROKER Agreement obligations. Upon receipt of such notice in writing, the BROKERS shall:
(1) immediately discontinue all services affected unless the notice directs
otherwise, and
(2) deliver to the CITY all plans, studies, reports, estimates, summaries, and
such other information and materials as may have been accumulated by
the BROKERS in performing this Agreement, whether completed or in
process.
(b) If the termination is due to the failure of the BROKERS to fulfill his Agreement
prosecute the same to completion by Agreement
be liable to the CITY for reasonable additional costs occasioned to the CITY thereby. The
BROKERS shall not be liable for such additional costs if the failure to perform the Agreement
arises out of causes beyond the control and without the fault or negligence of the BROKERS.
CI Y m e~the , r
strikes, freight embargoes, and unusually severe weather; but, in every case, the failure to
perform must be beyond the control and without the fault or negligence of the BROKERS.
(c) If, after notice of termination for failure to fulfill Agreement obligations, it is
determined that the BROKERS had not so failed, the termination shall be deemed to have been
effected for the convenience of the CITY. In such event, adjustment in the Agreement price
shall be made as provided in subsection (b) of this Section.
(d) The rights and remedies of the CITY provided in this clause are in addition to any
other rights and remedies provided by law or under this Agreement.
SECTION 8. EQUAL OPPORTUNITY EMPLOYMENT. BROKERS agree that it
will not discriminate against any employee or applicant for employment for work under this
Agreement because of race, color, religion, sex, age, national origin, or disability and will take
steps to ensure that applicants are employed, and employees are treated during employment,
without regard to race, color, religion, sex, age, national origin or disability. This provision shall
include, but not be limited to, the following: employment, upgrading, demotion or transfer;
recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship.
SECTION 9. ASSIGNMENT. This Agreement, or any interest herein, shall not be
assigned, transferred, or otherwise encumbered, under any circumstances, by the parties hereto
without prior written consent of the opposite party and only by a document of equal dignity
herewith.
4
SECTION 10. SUBCONTRACTORS. In the event BROKERS, during the course of
the work under this Agreement, requires the services of any subcontractors or other professional
associates in connection with service covered by this Agreement, BROKERS must secure the
prior written approval of the CITY. If subcontractors or other professional associates are
required in connection with the services covered by this Agreement, BROKERS shall remain
fully responsible for the services of subcontractors or other professional associates. A//
subcontracts shall include a provision making the CITY a Third Party Beneficiary of the
contact.
SECTION 11. INDEMNIFICATION OF CITY. BROKERS shall indemnify and hold
harmless and defend CITY, its officers, agents, and employees from and against any claim,
demand or cause of action of whatsoever kind including the payment of attorney fees and costs
or nature arising out of, allegedly arising out of, or related to the performance of services under
this Agreement by BROKERS, its officers, agents or employees.
SECTION 12. INSURANCE.
(a) General. The BROKERS shall at the BROKER'S own cost, procure the insurance
required under this Section.
(1) The BROKERS shall furnish the CITY with a Certificate of Insurance
signed by an authorized representative of the insurer evidencing the
insurance required by this Section (Professional Liability, Workers'
Compensation/Employer's Liability and Commercial General Liability).
The CITY, its officials, officers, and employees shall be additional named
insured under the Commercial General Liability policy. The Certificate of
Insurance shall provide that the CITY shall be given not less than thirty
5
(2)
(3)
(4)
(30) days written notice prior to the cancellation or restriction of coverage.
Until such time as the insurance is no longer required to be maintained by
the BROKERS, the BROKERS shall provide the CITY with a renewal or
replacement Certificate of Insurance not less than thirty (30) days before
expiration or replacement of the insurance for which a previous certificate
has been provided.
The Certificate shall contain a statement that it is being provided in
accordance with the Agreement and that the insurance is in full
compliance with the requirements of the Agreement. In lieu of the
statement on the Certificate, the BROKERS shall, at the option of the
CITY submit a sworn, notarized statement from an authorized
representative of the insurer that the Certificate is being provided in
accordance with the Agreement and that the insurance is in full
compliance with the requirements of the Agreement.
In addition to providing the Certificate of Insurance, if required by the
CITY, the BROKERS shall, within thirty (30) days after receipt of the
request, provide the CITY with a certified copy of each of the policies of
insurance providing coverage required by this Section.
Neither approval by the CITY or failure to disapprove the insurance
furnished by BROKERS shall relieve the BROKERS of the BROKERS
full responsibility for performance of any obligation including BROKERS
indemnification of CITY under this Agreement.
(b) Insurance Company Requirement. Insurance companies providing the insurance
under this Agreement must meet the following requirements:
(I) Companies issuing policies other than Workers' Compensation 'must be
authorized to conduct business in the State of Florida and prove same by
maintaining Certificates of Authority issued to the companies by the
Department of Insurance of the State of Florida. Policies for Workers'
Compensation may be issued by companies authorized as a group self-
insurer by Section 440.57, Florida Statutes.
(2) In addition, such companies other than those authorized by Section
440.57, Florida Statutes, shall have and maintain a Best's Rating of "A"-
or better and a Financial Size Category of "VI" or better according to
A.M. Best Company.
(3) If, during the period which an insurance company is providing the
.;,
insurance coverage required by this Agreement, an insurance company
shall: 1) lose its Certificate of Authority, 2) no longer comply with Section
440.57, Florida Statutes, or 3) fail to maintain the Best's Rating and
Financial Size Category, the BROKERS shall, as soon as the BROKERS
has knowledge of any such circumstance, immediately notify the CITY
and immediately replace the insurance coverage provided by the insurance
company with a different insurance company meeting the requirements of
this Agreement. Until such time as the BROKERS has replaced the
unacceptable insurer with an insurer acceptable to the CITY the
BROKERS shall be deemed to be in default of this Agreement.
(c) Specifications. Without limiting any of the other obligations or liability of the
BROKERS, the BROKERS shall, at the BROKERS sole expense, procure, maintain and keep in
force amounts and types of insurance conforming to the minimum requirements set forth in this
Section. Except as otherwise specified in the Agreement, the insurance shall become effective
prior to the commencement of work by the BROKERS and shall be maintained in force until the
The amounts and types of insurance shall conform to the following
Agreement completion date.
minimum requirements.
(1)
Workers' Compensation/Employer's Liability.
(A) BROKERS insurance shall cover the BROKERS and its
subcontractors of every tier for those sources of liability which would be covered by the latest
edition of the standard Workers' Compensation Policy, as filed for use in Florida by the National
Council on Compensation Insurance, without restrictive endorsements. In addition to coverage
for the Florida Workers' Compensation Act, where appropriate, coverage is to be included for
the United States Longshoremen and Harbor Workers' Compensation Act, Federal Employers'
Liability Act and any other applicable federal or state law.
(B) Subject to the restrictions of coverage found in the standard
Workers' Compensation Policy, there shall be no maximum limit on the amount of coverage for
liability imposed by the Florida Workers' Compensation Act, the United States Longshoremen's
and Harbor Workers' Compensation Act, or any other coverage customarily insured under Part
One of the standard Workers' Compensation Policy.
(C) The minimum amount of coverage under Part Two of the standard
Workers' Compensation Policy shall be:
$100,000.00 (Each Accident)
$500,000.00 (Disease-Policy Limit)
$100,000.00 (Disease-Each Employee)
(2) Commercial General Liability.
(A) The BROKERS' insurance shall cover the BROKERS for those
sources of liability which would be covered by the latest edition of the standard Commercial
General Liability coverage Form (ISO Form CG 00 01), as filed for use in the State of Florida by
the Insurance Services Office, without the attachment of restrictive endorsements other than the
elimination of Coverage C, Medical Payment and the elimination of coverage for Fire Damage
Legal Liability.
(B) The minimum limits to be maintained by the BROKERS (inclusive
of any amounts provided by an Umbrella or Excess policy) shall be those that would be provided
with the attachment of the Amendment of Limits of Insurance (Designated Project or Premises)
endorsement (ISO Form CG 25 01) to a Commercial General Liability Policy with amount of
coverage specified ,for each project as follows:
LIMITS
$Three (3) Times the Each Occurrence Limit
$300,000.00
General Aggregate
Personal & Advertising
Injury Limit
Each Occurrence Limit
$300,000.00
(3) Professional Liability Insurance. The BROKERS shall carry limits of
not less than FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00).
(d) Coverage. The insurance provided by BROKERS pursuant to this Agreement shall
apply on a primary basis and any other insurance or self-insurance maintained by the CITY or
9
the CITIES officials, officers, or employees shall be excess of and not contributing with the
insurance provided by or on behalf of the BROKERS.
(e) Occurrence Basis. The Workers' Compensation Policy and the Commercial General
Liability required by this Agreement shall be provided on an occurrence rather than a claims-
made basis. The Professional Liability insurance policy must either be on an occurrence basis,
or, if a claims-made basis, the coverage must respond to all claims reported within three (3) years
following the period for which coverage is required and which would have been covered had the
coverage been on an occurrence basis.
(f) Obligations. Compliance with the foregoing insurance requirements shall not relieve
the BROKERS, its employees or agents of liability from any obligation under a Section or any
other portions of this Agreement.
SECTION 13. EMPLOYEE BENEFITS. Coverage to be afforded as outlined in RFP
99/00-25 (Attachment A).
SECTION 14. REPRESENTATIVE OF CITY AND BROKER.
(a) It is recognized that questions in the day-to-day conduct of performance pursuant to
this Agreement will arise. The CITY, upon request by BROKERS, shall designate in writing and
shall advise BROKERS in writing of one (1) or more CITY employees to whom all
communications pertaining to the day-to-day conduct of the Agreement shall be addressed. The
designated representative shall have the authority to transmit instructions, receive information
and interpret and define the CITIES policy and decisions pertinent to the work covered by this
Agreement.
(b) BROKERS shall, at all times during the normal work week, designate or appoint one
or more representatives of BROKERS who are authorized to act on behalf of BROKERS
10
regarding all matters involving the conduct of the performance pursuant to this Agreement and
shall keep CITY continually advised of such designation.
SECTION 15. ALL PRIOR AGREEMENTS SUPERSEDED. This document in-
corporates and includes all prior negotiations, correspondence, conversations, agreements or
understandings applicable to the matter contained herein and the parties agree that there are not
commitments, agreements or understandings concerning the subject matter of this Agreement
that are not contained or referred to in this document. Accordingly, it is agreed that no deviation
from the terms hereof shall be predicated upon any prior representations or agreements, whether
oral or written.
SECTION 16. MODIFICATIONS, AMENDMENTS OR ALTERATIONS. No
modification, amendment or alteration in~ the terms or conditions contained herein shall be
effective unless contained in a written document executed with the same formality and of equal
dignity herewith.
SECTION 17. INDEPENDENT CONTRACTOR. It is agreed that nothing herein
contained is intended or should be construed as in any manner creating or establishing a
relationship of copartners between the parties, or as constituting the BROKERS including its
officers, employees, and agents, the agent, representative, or employee of the CITY for any
purpose, or in any manner, whatsoever. The BROKERS are to be and shall remain an
independent contractor with respect to all services performed under this Agreement.
SECTION 18. EMPLOYEE STATUS. Persons employed by the BROKERS in the
performance of services and functions pursuant to this Agreement shall have no claim to pesion,
workers' compensation, unemployment compensation, civil service or other employee rights or
11
privileges granted to the CITIES officers and employees either by operation of law or by the
CITY.
SECTION 19. SERVICES NOT PROVIDED FOR. No claim for services furnished
by the BROKERS not specifically provided for herein shall be honored by the CITY.
SECTION 20. PUBLIC RECORDS LAW. BROKERS acknowledges CITIES
obligations under Article 1, Section 24, Florida Constitution and Chapter 119, Florida Statutes,
to release public records to members of the public upon request. BROKERS acknowledge that
CITY is required to comply with Article 1, Section 24, Florida Constitution and Chapter 119,
Florida Statutes, in the handling of the materials created under this Agreement and that said
statute controls over the terms of this Agreement.
SECTION 21. NOTICES. Whenever either party desires to give notice unto the other,
it must be given by written notice, sent by certified United States mail, with return receipt
requested, addressed to the party for whom it is intended at the place last specified and the place
for giving of notice shall remain such until it shall have been changed by written notice in
compliance with the provisions of this Section. For the present, the parties designate the
following as the respective places for giving of notice, to wit:
FOR CITY OF SANFORD:
Mayor
300 N. Park Avenue
Sanford, Florida 32771
FOR BROKERS:
Arthur J. Gallagher & Co. McLain, Pierce and Associates
7380 Sand Lake Road, Suite 390 720 S. Park Avenue
Orlando, Florida 32819 Sanford, Florida 32772
12
SECTION 22. RIGHTS AT LAW RETAINED. The rights and remedies of the CITY,
provided for under this Agreement, are in addition to any other rights and remedies provided by
law.
SECTION 23. COMPLIANCE WITH LAWS AND REGULATIONS. In providing
all services pursuant to this Agreement, the BROKERS shall abide by all statutes, ordinances,
rules, and regulations pertaining to, or regulating the provisions of, such services, including those
now in effect and hereafter adopted. Any violation of said statutes, ordinances, rules, or
regulations shall constitute a material breach of this Agreement, and shall entitle the CITY to
terminate this Agreement immediately upon delivery of written notice of termination to the
BROKERS.
SECTION 24. CONFLICT OF INTEREST.
(a) The BROKERS agree that it will not engage in any action that would create a conflict
of interest in the performance of its obligations pursuant to this Agreement with the CITY or
which would violate or cause others to violate the provisions of Part III, Chapter 112, Florida
Statutes, relating to ethics in government.
(b) The BROKERS hereby certifies that no officer, agent or employee of the CITY has
any material interest (as defined in Section 112.312 (15), Florida Statutes, as over 5%) either
directly or indirectly, in the business of the BROKERS to be conducted here, and that no such
person shall have any such interest at any time during the term of this Agreement.
(c) Pursuant to Section 216.347, Florida Statutes, the BROKERS hereby agree that
monies .received from the CITY pursuant to this Agreement will not be used for the purpose of
lobbying the Legislature or any other State or Federal Agency.
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IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement
for the purposes stated herein.
Date: ~I41X)
ARTHUR J. GALLAGHER & CO.
ny:~,~..4..)f.~/
Glenn R. Tobey, Area President
Date: September 6, 2000
BMy~LA~OCIATES
Chester A. Pierce, President
Date:
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ATTACHMENT A
BROKER
SERVICES
MARKETING
AND
INSURANCE COVERAGES
BROKER SERVICES
Marketing Strategy
In order to determine the best advantageous insurance markets to provide the services requested
by the City, a History of Losses and Exposures of t he City is paramount.
1. Who will insure the environment liability?
2. Who can provide incidental medical malpractice for EMT?
3. Will the insurance company allow the County to select their own legal defense, or
will it be assigned by the company?
4. Who can provide Florida Wind capacity at reasonable deductible levels?
5. Who can offer the most advantageous Managed Care arrangements for Workers'
Compensation? '-
There are only five (5) examples of probably one hundred (100) scenarios we at Gallagher
consider before approaching any market for insurance coverages.
The Loss Analysis we conduct, not only demonstrates premium to loss ratio's, but specifically
provides type of loss, by what department, by part of body. This information is crucial in
determining what insurance markets may be approached.
Exhibits A, B and C are hypothetical examples of what we present to insurance underwriters for
the best possible program.
2
Timing
In theory for a Public Entity client, the Brokers completed proposal should be in the hands of the
City sixty days prior to expiration. This allows two (2) full weeks for staff to review and
recommend to the board. Based on the board's agenda items, it allows three (3) board meetings
to vote on staffs recommendation. This also means updated underwriting data should be sent to
the City by the broker on July 1 of each year. This allows staff forty-five days to compile the
requested information. Once received by the broker, it allows us forty-five days to prepare the
underwriting proposal, meet with underwriters and prepare the final proposal. In many cases
three or four insurance companies may be involved, especially with Florida Property Coverage.
With on broker working on all areas in insurance, there should be no problem meeting these time
frames.
An annual timetable has been developed on Exhibit D. This is further elaborated on in Section 6,
Stewardship Reports.
We know ideal conditions can not always be met. With the relationship we have with a number
of underwriting companies, we have been able to accomplish our clients goals and needs in as
little time as three weeks.
3
Client Meeting and Meeting with Underwriters
It should be noted that we at Gallagher encourage meeting with underwriters. By building a closer
relationship between client and underwriter can only enhance renewal terms and conditions.
Underwriters also get a better appreciation of what City staff faces on a day-to-day basis. We at
Gallagher meet with underwriters on a frequent basis. It builds trust and assurance that the
underwriters know we at Gallagher know City exposures.
We further encourage at least monthly meetings with our clients to discuss ongoing situations at the
City. We provide periodical updates of the marketplace and can provide updated information which
relates to City business. We also recommend that we be brought in on claim involvement. Through
our expertise in policy language and interpretation, we can assist in equitable claim settlement. The
attached letter, Exhibit E, from Seminole County School Board supports our involvement.
Major Insurance Carriers by Line of Coverage
Arthur J. Gallagher & Co. is one of the leading brokers in the country who provides insurance
programs to Public Entities. In stating that our Corporation has developed a Corporate Solvency
Committee to monitor the fmancial stability of insurance companies. Attached, Exhibit F, indicates
our corporate guidelines which indicates we must use a Best Rated insurance company which is A-6
or better.
Them are insurance companies who might be able to provide lower pricing, however, their rating
structure is less than A-6. If our client elects to purchase from that company or companies, we must
obtain a sign-off letter from the client. Therefore, we do not recommend insurance companies that
are not rated by Best with an A-6 or lower rating. The only exception is the Underwriters of Lloyds
of London (not rated by Best) with policyholders surplus in excess of 23 Billion U.S. dollars.
CLAIM
ADMINISTRATION
Claims Administration
Our team effort have access to the following list of "TPA", Third Party Administrators.
1. Gallaghcr Bassett Services, Inc. - A division of Arthur J. Gallagher & Co.
2. United Self Insured Services - A large, local finn in Orlando
3. Humana - A large, local firm in Orlando
4. Crawford and Company
5. Professional Administrators
6. IAS
7. Commercial Risk Management
8. Johns - Eastern
9. GAB
10. Willis-Coroon Administrative Services
11. Sewell, Todd & Broxton
All of the above firms have clients in the Public Entity Sector. The first four (4) fn'ms have the
most experience in the Public Entity Sector, especially here in Florida. Humana, primarily
focuses on Workers' Compensation coverages.
The following criteria will be required by all TPA Service Companies.
3
Claims Management Services
· Litigation Management
· Subrogation Management
· Settlement Management
· Rehabilitation Management
· Reserve Management
· Investigation Management
· Managed Care Management
Not only are these companies involved in large claims handling, but are also involved in the day
to day handling of all claims. To track each claim, reports are issued on a monthly basis.
Claims Management Renorts
· Reports by Coverage
· Reports by Department
· Accurate Reports
· Timely Reports
· Sdex Facs
· Comprehensive Data Reports
· Ad Hoc Capabilities
· Specific Excess Reports
· Aggregate Excess Reports
Gallagher Bassett Services, Inc.
THIRD PARTY ADMINISTRATION SERVICES
Workers Compensation
The activities outlined below form the basic steps through Which all
workers compensation claims progress.
Receipt of Employers First Report of Injury by Gallagher Basserr
Claim is coded
- Type of accident
- Source of accident
- Cause of accident
- Nature of loss
- Pa~t of body
Total Experience is established
- Indemnity
- Medical
- Expense
- Rehabilitation
File is set up
- File physically erected
- Data input into the RisX;Facs system
- State form mailed to Industrial Commission
- Medical reports requested
- Client contacted
- Index Bureau processing
- Investigate as necessary
- Calculate-benefits
Receipt of Important Additional Information from Client
Complete investigation of claim
Conduct independent medical exam
Evaluate total experience
Determine recoveries
i0
Gallagher Bassett Services, Inc.
THIRD PARTY ADMINISTRATION SERVICES
Receipt of Medical Information
· Accept or deny claim
· Payment of lost time benefits
· Payment of medical benefits
· Rehabilitation
· Request for additional medical information
· Evaluate total experience
Receipt of Legal Documents
· Assign case to legal counsel
· Discuss case with claimant's attorney
· Evaluate total experience
· Discuss options with client and their attorney
· Accept or deny claim
Final Disposition
· Receive final medical information
· Evaluate for permanent disability/total experience
· Discuss settlement/denial with client as needed
· Close file
Liability
The activities outlined below form the basic steps through which all
progress.
Receipt of Liability Acord Form
Claim is coded
- Type of accident
- Source of accident
- Cause of accident
- Nature of loss
liability claims
11
Gallagher Bassett Services, Inc.
THIRD PARTY ADMINISTRATION SERVICES
Total experience is established
- Loss reserve
- Expense reserve
File is set up
- File physically erected
Data entered into the Risx-Facs system
Client contacted
Investigate as necessary
Receipt of Important Additional from Client
Complete investigation of claim
On-site investigation as required
Contribution, subrogation determination
Re-evaluate total experience
Receipt of Legal Documents
· Assign case to legal counsel
· Discuss case with claimant's attorney and request status reports
· Re-evaluate total experience
Final Disposition
· Receive final claim information
· Discuss settlement/denial with client as needed
· Close file
Property
The activities outlined below form the basic steps through which all property claims
progress.
Receipt of Property First Report Form
Claim is coded
File is set up
- File physically erected
- Data entered into the Risx-Facs system
- Investigate as necessary
- Contact client
- Appropriate reporting is provided to the client and if necessary, to their excess
carrier
12
Gallagher Bassett Services, Inc.
THIRD PARTY ADMINISTRATION SERVICES
Receipt of Important Additional Information from Client
Complete investigation of claim (coverage verification}
Establish reserve
Determine recoveries (salvage/subrogation}
Issue appropriate reports
Final Disposition
Verification of claim details
Negotiate value settlement with client
Close loss
Submit documents for final payment issuance
C. Claims
Branch Workload and Responsibility:
The average inventory by adjuster, by line of coverage, is as follows:
Property and Liability
Senior Claims Adjuster:
170 Claims
Typically, the Sr. Claims Adjuster has the ability to handle the more
complex liability and property claims.
Workers' Compensation
Medical Only Processor:
Indemnity Team:
300 Claims
200 Claims
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Additional Third Party Claims Administration
Most TPA utilize a "team concept" in managing indemnity claims arising out of a Workers
Compensation program. The team will usually consist of a supervisor, senior adjuster as well as
a licensed claims adjuster. This concept allows for the senior adjuster to focus on the more
complex issues involved in managing a Workers Compensation claim with the adjuster providing
support on more routine issues at hand.
The team concept all provides our client with the assurance that an adjuster who is familiar with
the program is available at all times should questions arise.
Additional Services offered by all TPA are as follows:
A.)
C.)
D.)
E.)
F.)
G.)
Information Management
Loss and Claim Experience Reports
Account Coordination
Banking
Managed Care
Prescription Drug
Loss Control Services
We have included information in the following pages on Genex, a managed care provider, loss
reports from Gallagher Bassett and Loss Prevention Strategy.
14
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ARTHUR J. GALLAGHER & CO. - ORLANDO
Loss Control/Prevention Strategy
We have found that be organizing a consistent, uniform loss control program, the chances of
producing meaningful results are far greater than random activities.
Accidents will occur until causes are addressed. A disciplined, managed, loss control system that
anticipates and prevents accidents can turn the expense of losses into Risk Management Program
cost savings. We advocate a pro-active Loss Control program rather then re-active. This approach
helps develop and implement a structured Loss Control Program, with flexible options to help deal
with past losses and the effects of change.
The focus of a pro-active Loss Control program is a constant' cycle of information gathering,
analysis, evaluation and decision making. The steps involved in the process are:
Identify and evaluate loss exposures - through surveys, loss reports, analysis and reviews of
the current program.
Analyze and evaluate options to address losses. A focus will be made to fit Seminole's
culture and organizational structure.
Develop strategies and implement cost-effective "Action Plant" to reduce losses.
Monitor the activities and results of the implemented "Action Plan".
Adjust strategies and goals where necessary.
With the commitment of concerned management to a sound "Action Plan", the following benefits
from this approach can be realized.
Safety is increased
Risks are reduced
Loss exposures are controlled
Accountability is developed and maintained
Severe losses are limited
The probability and frquency of accidents' are reduced
Gallagher Bassett Services, Inc.
RISK CONTROL CONSULTING SERVICES
LOSS CONTROL SERVICE OPTIONS
SURVEYS ANDINSPECTIONS
These services are designed to identify and evaluate the impact of loss exposures and
risks on an organization. This process helps pdodtize those areas which can most
economically benefit from Loss Control Aclivities. Audits and surveys may also be used
to monitor the effecliveness of Loss Control or Safely Programs thai are currently In -
place.
Self-Inspection Forms/Programs
Safety Audits
On-site Loss Control Surveys
Safety Policy/Procedure/Program Review
Comprehensive Safety Evaluations
Properly Surveys
Fire Exposure Audits
Construction Plan/Specification Review
Business Interruption Analysis
Disaster Plan Review
Regulatory Compliance Audits
Security System Analysis
Fleet Analysis
Chemical Safety Analysis
Accident Investigation
Special Studies
Human Factors Analysis
Workplace Ergonomic Assessment Report
Ergonomic Analysis
Job Observation
Job Safety Analysis
Police/Security Liability Analysis
Liability Assessment Profile
Policy/Procedure Review
Industrial Hygiene
Personnel/Area Monitoring
Noise Monitoring
Process Hazard Evaluations
Environmental Risk Assessment
Properly Transfers
Underground Storage Tanks
Indoor Air Pollution
Ration Monitoring
Gallagher Bassett Services, Inc.
PROGRAM DEVELOPMENT AND IMPLEMENTATION
These services are designed to empower an organization to manage its own risks and
loss exposures by providing the 'tools" for Loss Control. These tools include programs,
procedures, guidelines, safety manuals and other documentation.
Self Inspection Programs
Hazard Recognition Programs
Slip/Trip/Fall Prevention Programs
Accident Investigation Programs
OSHA Compliance Programs
Hazard Communication
Injury/Illness Record keeping
Self-monitoring Audit Program
Safety Programs
Safety Policies
Safety Procedures
Safety Manuals
Fleet/Driver Safety Programs
Employee WellnesslStress Reduction Programs
Workers Compensation Control Programs
Return to Work Programs
Back Strain/Injury Control
Uability Control Programs
Police
Security
Athletic Padicipation
Errors and Omissions
· Directors and Officers
Sexual Misconduct
Property Loss Control Programs
Fire Prevention
Secudty
Arson Prevention
Vandalism Control
Property Conservation
PREMIUM/LOSS
ALLOCATIONS
Premium/Loss Allocations
We have developed a charge-back system which can apply per department for your total
insurance costs program. This system also identifies the high risk areas of loss whereby
increased measures of additional loss prevention training, seminars are recommended.
This charge-back system can be utilized by the City if you elect to employ once we have all the
underwriting information for the City. This WILL BE part of our overall proposal. We will
work with your risk management department on our system. Basically, percentages of premium
and loss dollars are charged to each department based on exposure and prior loss history. It is a
effective program of safety awareness for department heads and supervisors.
If the City has implemented a charge back system, we will review and recommend any
improvements, if warranted.
17
STEWARDSHIP
REPORTS
Stewardship Reports
A comprehensive annual E&O policy review is completed each year, byline of
coverage, by the producing broker and assistant. The branch manager is also required
to sign off on these reports. Sample attached.
We have a computerized software program to track and date work performance and
length of time, if requested.
The two main features of our Stewardship Reports are:
( 1 ) Service Issues
(2) Education and Training
The following pages detail each coverage section which will be tailored for the City of
Sanford's specific needs and exposures.
18
Arthur J. Gallagher & Co. - Orlando
STE IVA RDSHIP R EPOR F
Name of Account:
Name of Employee:
PROPERTY
SERVICE
, Assist in coverage determination.
· Coordination of quota share/layered policies.
· Check for coverage gaps/non-concurrency.
· Negotiate manuscript policies.
· Assist mortgagees with certificates and policies.
· Contract/lease review for insurance requirements.
· Arrange client/carrier meetings.
· Review property values with insureds annually prior to renewal.
· Follow-up on Builders Risk construction schedules for occupancy and
completion.
· Request a signed Statement of Values from the insured.
· Illustrate creative approaches to difficult placements by using
techniques such as primary/excess, quota share layering and
deductible buybacks.
· Review insured's contracts (leases, etc.).
· Use E & O Checklist to make sure client gets coverage that carrier
quoted to them.
· Specification Design - help prospects and clients design coverage
specifications for marketing their program.
· Send letter of confirmation when insured requests changes.
· Confirm additional insureds/mortgagees with insured prior to adding to
policy.
· Send copies of certificates to insured for their records.
· Provide client with a comprehensive schedule of coverages for easy
reference.
· Set up generic letters of recurring situations to expedite processing
(generic letter to inform client that certificate was mailed).
· Ability to place difficult values with Gallagher Intermediaries.
· Negotiate multiple year deals with underwriters if advantageous to
client.
· Coastal Property market development.
· Maintain premium breakdown by division.
PROPERTY
EDUCATION/TRAINING
· Educate insured on policy deductibles.
· Educate and recommend blanket coverages where possible.
· Educate client as to coverage for additions, newly acquired exposures.
· Explain to insured exactly how loss will be settled.
· Develop a standard letter to make clients aware of warranties in policy.
· Educate the insured on co-insurance.
· Discuss appropriate information from John Liner and other insurance
publications.
· Understand lab burn test.
· Send insured information that would be of interest to their business.
· Send newsletter.
· Conduct seminars on relevant topics (include other AJG divisions
where appropriate, e.g., AMSEC).
· Arrange for client to participate in industry programs/seminars.
2{~
GENERAL LIABILITY
SERVICE ISSUES
· Explain premium basis Audit vs. Flat charge.
· Identify exposures and explain impact of Risk Retention and Transfer.
· Certificates:
* Review vendors coverage for certificate holders
* Update certificate list for insured
* Monitor certificates for insured so exposures can be passed on.
· Update loss runs on a scheduled basis and review with insured.
· Set up network of specialized service providers.
· Review insured's contracts with suppliers, customers, lessors,
distributors and lessees.
Review leases and hold harmless agreements of insured.
Assist with Disaster planning for liability events.
Recommend actuaries.
Develop quarterly service plan.
Premium allocation by profit center.
Provide educational seminars on current hot topics.
Research coverage issues and disseminate to all clients.
Coordinate with TPA.
Alternative funding methods.
Offer AJG Drug Testing Program to those insureds who have a need.
Quote higher umbrella limits.
Confirm that underlying limits meet Excess/Umbrella requirements.
Provide claims kit with Company specific claim reporting information.
Make sure punitive damages are covered and check that
Umbrella/Excess policy follows form.
· Send confirmation letter when clients request changes.
· Give timely articles on Auto and GL.
· Review certificates of insurance provided to client by others.
· Subscribe to the client's trade journals - point out interesting articles.
21
WORKERS COMPENSATION
SAFETY AND LOSS CONTROL
· Help decide where to focus loss control efforts, based on frequency
and severity parameters.
· Forecasting - help trend and develop to arrive at expected losses.
· Safety Program - help with design, implementation and monitoring.
· Attend loss control and claims management meetings with client.
· Demonstrate long-term cost savings from loss prevention
expenditures.
· Assist in creating safety manuals, newsletters and brochures.
· Help establish pre-employment physical protocol.
· Consult with index Bureaus for "repeaters".
· Assist with OSHA compliance. Review OSHA logs.
· Ensure proper use of loss control for hazard identification and analysis.
· Review claims to determine problem areas.
· Be a catalyst for Safety Incentive Programs.
· Always quote at least one option that is loss sensitive.
· Pro-active employer/employee communications after claims.
· Implement program for accidents involving motor vehicles.
· Encourage client to do regular walk-through of work areas - check on
employees use of safety gear, safeguards on machinery, proper lifting
techniques.
· Work with client on ideas for building employee morale to reduce
fraud.
· Visit insured locations with claims representative before loss occurs.
· Assist in obtaining safety equipment discounts.
· Assist in identifying fraudulent claims and be pro-active in helping to
seek solutions.
· Suggest client-specific safety and loss control activities based on prior
losses.
· Assist in establishing safety committee.
· Investigate segregation of plant areas for possible code reduction.
WORKERS COMPENSATION
SAFETY AND LOSS CONTROL (continued)
· Help decide where to focus loss control efforts, based on frequency
and severity parameters.
· Recommend pre-placement services. Can also dovetail with
employers responsibilities under ADA.
· Recommend ergonomic studies.
· In chemical related or other high hazard risks, sell GB loss control
assistance.
AUTO
SERVICE ISSUES
· Run MVR's on prospective and current employees.
· Provide a c!aim report to be kept in vehic!e in event of accident.
· Fax ID cards to client on the effective date of coverage and mail
originals.
· Review and/or recommend physical damage based on age and value
of vehicle.
· Create standard form for client to provide driver's information, vehicle
info, change of exposure units.
· Suggest the implementation of miles recorded and time frame involved
for trucking and buses for maintenance checks.
· Conduct physical audit of company vehicles to determine:
* Correct I D
* Two way radio
* Telephone
* Vehicle improvements
* Vehicle tool inventory
Report to be kept in vehicle in event of accident.
24
WORKERS COMPENSATION
EDUCATION/TRAINING
· Teach client how WC works, what is covered and, equally important,
what is excluded, and how claims process works.
· Educate insured on competitors practices, reserves, etc.
· AJG - attend, encourage insured to attend WC hearings-
· Furnish NCCi and other literature to client.
· AJG - educate personnel regarding options for WC, i.e. self-insurance,
pooling, self-insured funds, etc.
· Be aware of laws and benefits by state and make available to client
(from National Chamber of Commerce).
· Assist with Regulatory Compliance when appropriate.
· Update client on legislative changes affecting WC.
· Update client on "24 hour" opportunities.
· Basic classes for clients of various ways they can lower their insurance
costs (i.e. drug free, managed care, dividends, etc.).
· Present educational seminars/workshops.
25
WORKERS COMPENSATION
OTHER
· Self-Insured Services - keep client informed on new regulations,
assessments, etc.
· Assist and coordinate the work of independent actuaries hired by
client.
· Provide Re-insurance services-(expertise: NY and London offices).
· Assist in determining cost effectiveness of a loss limitation charge.
· Create alternative premium funding methods.
· Facilitate direct contract between insured and underwriter.
· Studies conducted to determine self-insured qualifications.
· Coordination of ergonomic and industrial hygiene studies.
· Provide documentation of marketing research and marketing
strategies.
· Monitor to be sure all Employer Liability limits meet Umbrella carrier
minimum underlying limits.
· Intra-agency checklist for producers and CSR's to use on accounts.
· FCCPOP credit - make sure contracting risks get the credit by sending
mailing to clients with qualifying SIC codes.
· Explain pros and cons of WC funds.
· Offer alternative market options.
· Review foreign WC including travel.
· Provide summary of WC results that buyer can use for his
management.
· Check for compliance with disability laws in the 6 states.
· Offer GB services on an unbundled basis where appropriate.
· Explore WC group/association captive.
· Assist in development/management of an award program.
· Assist in obtaining contractors premium credits.
· Assist in PPO/Managed Care development.
· Coordinate company/excess aggregate recovery.
· Index STD to WC benefits.
· Establish in advance procedures on how to handle close-out of policy.
Issues - run off claims, - Subrogation Who/How handled.
· OSHA, ADA, Family Medical Leave.
RISK MANAGEMENT
ADVISORY SERVICES
Our team receives and has access to many periodicals, insurance manuals and reference material.
We have attached a list of the most prominent. We will provide the City from time to time,
information which could be pertinent in the Cities day-to-day insurance program.
A.)
Recently, we have received numerous articles on the changing Property Marketplace.
Prices are hardening while capacity is still plentiful. This trend however we are seeing
gives us concern to the stable markets versus the in and out companies who want to make
a quick profit then leave two years later.
The attached 1999 NCCI Workers Compensation rates effective January 1, 1999 shows a
15 to 18 % increase in City department codes. A large deductible or protected self-
insurance program is an alternative to these increases.
c.)
The attached claim bills passed by the State legislature shows increase activity in the
Award of Dollars excess of Sovereign I immunity Limits per State Statue 762.28. This
could support the idea of adequate limits for General Liability and Public Officials
Liability coverages. Plus, Florida Statute 762.28 does not apply to Federal Claims such
as Civil Rights Violations and forms of discrimination.
D.)
Contractual Risk Transfer: The Cities approach to contractual risk transfer can be
considered a success if it meets the following criteria. We will assist the City in these
areas of contract review and advise our professional opinion.
Are the risks retained appropriate and affordable?
· Is the risk an element of the overall transaction and negotiation? Is it incorporated at
the onset7
· Is the indemnity agreement, and other pertinent conditions so onerous that contract
negotiations drag on unnecessarily delaying the transaction?
· Is the contractual conditions allocating risk onerous that a court disallows their
operation at a future point in time.
· Are the insurance requirements clear, in order to be interpreted at the time the
contract7
· Is the insurance and other supportive information in place if a loss occurs?
· Is there a thorough insurance monitoring process in place to keep the transferee in
compliance with the insurance requirements?
· Is the pertbrmance of the contract process monitored and regularly evaluated?
47
The contractual risk transfer process operates smoothly where there is an appropriate level of
knowledge and skills to protect the interests of each party to the contract negotiation. Most
important is knowledge of the business transaction which the contract memorializes. An
experienced attorney's knowledge of legal issues, statues, and contract construction techniques is
essential. A risk management professional and the broker, knowledgeable of risk management
principles, insurance coverages, and the insurance marketplace are equally essential to the
success of the process.
Specific Cases We Have Reviewed and Evaluated
* Pipeline Crossing Agreements
· Sports Training Center
· Florida Power and Light Building
· Model Conflict of Interest Clause
· Model and Indemnification and Hold Harmless Clause
· Model Insurance Clause for Contracts Involving Intellectual Property and/or
Advanced Technologies
· Architectural Services for Public Safety Building
· R.W. Beck Insurance Coverage
· Lease Agreement - Security at Park
· Site Security
· Uniform Waterway Markers
· Railroad Cable License Agreement
· Professional Engineering Services Agreement for Water and Wastewater Master
Planning
· Franchise solid Waste Haulers
· Drainage Inventory
· Advertising Benches Agreements
· Hold Harmless Agreement
48
OTHER RISK
MANAGEMENT
SERVICES
RISK MANAGEMENT SERVICES
Arthur J. Gallagher & Co.'s risk management services are available as a complete, totally-integrated
system or on a select, stand-alone basis.
PROPER TYICASUAL TY
Brokering and Consulting
Proprietary Insurance Programs for
Commercial, Industrial, Institutional
and Governmental Risks
Primary and Excess Placements
Reinsurance
Worldwide Market Access
International Program Capabilities
Direct Access to Lloyd's, London
and Bermuda Insurance Markets
Self-Insured Programs
Association Programs
Risk Retention Groups
Pool Design, Consulting and Management
Captive Design, Consulting and Management
Captive Domicile Management
Rent-a-Captives
Surety Bond Specialists
Executive Protection Products
Claims Advocacy
Loss Control Supervision
Claims Management Services
Reserve Management
Recoveries Management
Litigation Management
Settlement Management
Self-Insured Qualifying
National Account Coordination
ClaimLine -- Toll-Free Claim Reporting
Managed Care Services
Preferred Provider Organizations (PPOs) --
Hospital, Outpatient Care and Retail
Pharmaceutical Networks
Wholesale Prescriptions and
Medical Equipment Program
Automated State Fee Scheduling
Usual, Customary and Reasonable
Bill Review Services
Hospital Bill Audits
Medical Case Management
Vocational Rehabilitation
Light Duty and Return-to-Work Programs
Utilization Review and Injury
Management Programs
Dental Review Services
24-Hour Process
Managed Care Organizations
Risk Control Consulting Services
Risk Assessments
Employee Health and Safety
Transportation and Fleet Safety
Fire Protection Engineering
Liability
Client Training
Industrial Hygiene
Ergonomics
continued~'
ARTHURJ. GALLAGHER & CO.