1984-0801_HARTFORD SPECIALTY_Claim Service Agreement CLAIM SERVICE AGREEMENT
By and Between
• CITY OF SAN JUAN CAPISTRANO
and
HARTFORD SPECIALTY COMPANY
(General Liability and Automobile Liability)
WHEREAS City of San Juan Capistrano ("Customer") , has elected to become a
self-insurer for General Liability and Automobile Liability and has requested
Hartford Specialty Company ("HSC") to provide claim service in conjunction
with Customer's self-insurance plan, NOW, THEREFORE, HSC and Customer hereby
agree that:
I. Services Provided
A. HSC shall provide claim service on behalf of Customer, including the
advancement of funds in payments of claims, and allocated claim
expense thereon. Claims to be serviced are for all General Liability
and Automobile Liability claims arising out of occurrences dated on or
after the effective date of this Agreement. Either party may further
limit this time period by providing the other party written notice
that this Agreement is not to include services for claims arising from
occurrences dated beyond a specified date, such notice to be provided
• no less than thirty (30) days prior to the limitation date specified.
B. HSC's sole responsibility shall be to service such claims in a
reasonable manner in accordance with accepted claim servicing
practices and defense, adjustment, settlement or payment by HSC shall
be prima facie evidence of the reasonableness thereof.
C. HSC shall not incur any liability to discharge on behalf of Customer
any of Customer's obligations as a self-insurer, and Customer will
hold HSC harmless and defend and indemnify HSC against any loss
expense or liability, including reasonable attorney fees arising out
of any claim against HSC alleging that HSC has any such liability
unless such claims result from the negligence of HSC.
D. HSC shall provide the Customer monthly exhibits which will show:
1. a summary of all claim financial transactions by claim number,
occurring during the month covered by the exhibit;
2. a summary of the financial status of outstanding claims as of the
close of the month covered by the exhibit;
3• a recapitulation of 1 and 2 above to be used as the basis of the
bill for reimbursement of funds advanced by HSC and service fees;
•
0
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4. a statement showing amounts owed to HSC by Customer as follows:
• a. the amount paid by HSC on behalf of the Customer
b. the service fees.
II. Obligation of Customer
A. In consideration of HSC providing the services stated in Section I,
Customer will reimburse HSC for amounts advanced by HSC on behalf of
Customer, pay to HSC the service fees, and maintain credit as
described in Paragraph V. A. hereinafter.
B. All amounts due are payable when billed. If balances due are not
received within thirty (30) days from the billing date a service
penalty equal to 1.5% of the amount billed shall be assessed for each
subsequent thirty (30) day period or any part thereof until balances
due are received.
C. If within thirty (30) business days after receipt by Customer of
HSC's monthly billing, Customer has not made payment, HSC shall have
no further obligation to provide further service under this Agreement.
III. Service Period
A. HSC service shall commence on the effective date of this Agreement
and shall continue until all claims subject to this service agreement
are handled to a conclusion subject to the provisions of II. C. and
III. B. of this agreement.
B. Customer may terminate this agreement by providing HSC no less than
thirty (30) days written notice of termination date. In the event of
notice of termination by Customer, HSC will discontinue providing the
services described in Section I, effective with the specified
termination date. All claims reported by Customer to HSC up to the
specified termination date which have not been concluded as of the
specified termination date, shall be returned to Customer within ten
(10) days after the termination date. In the absence of termination
by Customer under the provisions of this paragraph, the Agreement
shall remain in effect until all claims subject to service are
concluded subject to the provisions of paragraph II B. of this
Agreement.
IV. Fees
A. In consideration of the services provided for Customer by HSC as
described in Section I of this agreement, Customer shall pay HSC a
flat per claim fee, as described below, said amount to be payable in
the month following the month the claim was reported to HSC by
Customer.
General Liability - Bodily Injury $350 per claim
. General Liability - Property Damage $230 per claim
Automobile Liability - Bodily Injury $250 per claim
Automobile Liability - Property Damage $145 per claim
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Claim service fees described herein shall be subject to renegotiation
• effective as of each anniversary of the initial effective date of
this agreement, such renegotiated fees to apply to claims arising out
of occurrences dated thereafter.
V. Deposit
A. Customer agrees to provide HSC with funds sufficient to cover claim
and allocated loss expense payments to be made by HSC on behalf of
Customer. In this connection, Customer shall place on deposit with
HSC $1,000, which is estimated to equal the amount HSC shall be
required to pay prior to monthly reimbursement(s) from Customer as
provided within Paragraph II. Should this amount become insufficient
or excessive for the purposes described, it shall be adjusted to an
amount believed by Customer and HSC to be proper.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective the first day of August, 1984.
WITNESS HARTFORD SPECIALTY COMPANY
By
. Title Title
WITNESS CITY OF SAN JUAN CAPISTRANO
z2z&z4 By
MARY ANN 9ANOVEff GA L. HAUSDORFER
Title C Y CLERK le MAYOR
0022c
•
4/. CITY INSURANCE COVERAGE - LIABILITY INSURANCE
'x(38) Written Communications:
(49) Report ate August , 1984, from the Director of
Administrative Services, advising that prior to August 1st
of each fiscal year, the Department of Administrative
Services solicits public liability and property damage
insurance proposals through the City' s broker of record, Dan
Gorman. This year' s solicitations are based on the same
coverage as in the past and consist of a combined single
limit coverage of $1,000 ,000 .00 , excess umbrella coverage of
$9 ,000 ,000 . 00 , and property insurance coverage on City
facilities and contents. For the last six years, the city
has maintained public liability coverage through a
$50 ,000 . 00 self-insured retention program with a maximum
stop loss of $150 , 000. 00 per policy year.
The report advised that the quotations are considerably
higher for the same coverage, the only change being in the
area of claims administration; any policy written by the
Hartford Insurance Group with self-insured retention under
$100 ,000 .00 requires that claims administration be handled
by the Hartford Specialty Group.
i
Approval of Liability Coverage:
It was moved by Councilman Bland, seconded by Councilman
Friess , and unanimously carried to direct staff to renew the
insurance policies with the Hartford Insurance Group with
the same program coverage as last year and the change in
claims administration.
O� 1I ��
AGENDA ITEM August 7 , 1984
TO : Stephen B . Julian, City Manager
FROM: Bob Boone , Director of Administrative Services
SUBJECT : City Insurance Coverage - Liability Insurance
SITUATION
Prior to August 1 of each year , the Department of Administrative
Services s6licits and receives annual public liability and pro-
perty damage insurance proposals through the City' s broker of
record, Dan Gorman.
This year ' s solicitations are based on the same coverage as in
the past and consist of a combined single limit coverage of
$1 , 000 , 000 . 00 , excess umbrella coverage of $9 , 000 , 000 . 00 , and
property insurance coverage on City facilities and its contents .
For the last six years , the City has maintained public liability
coverage through a $50 , 000 . 00 self-insured retention program
with a maximum stop loss of $150 , 000 . 00 per policy year . This
program has proven to be cost-effective in the past .
The insurance market has hardened over the "last year . This
year ' s quotations are considerably higher than last year for the
same type program coverage as shown in Attachment A.
The only change in this year' s -program is in the area of claims
administration. Any policy written by the Hartford Insurance
Group with self-insured retention under $100 , 000 . 00 requires that
claims administration be handled by the Hartford Specialty Group .
The staff recommendation for this year will be to renew our
coverage with the Hartford Insurance Company with a change in
claims administration.
COMMISSION/BOARD REVIEW, RECOMMENDATION
Not applicable .
FINANCIAL CONSIDERATIONS
The premium cost for liability coverage for 1983- 84 was $12 , 200 . 00
and the cost for 1984-85 will be $22 , 700 . 00 , an increase of
$ 10 , 500 . 00 .
The City will again have a maximum stop loss of $150 , 000 . 00 per
policy year .
The premium for property insurance coverage is $ 3 , 672 . 00 , the
same as last year .
FOR CITY COUNCIL AGENDA 13
tf{§
City Insurance Coverage - Liability Insurance
August 7 , 1984
Page 2
The policy covering the Library and Auditorium will cost $4 , 201 . 00
with a 70% reimbursement from the County of Orange .
Claims administration with the Hartford Specialty Group will be
approximately $2 , 500 . 00 .
There is $20 ,000 . 00 budgeted in the Internal Service Fund for in-
surance premiums . A budget adjustment will be required if the
Fund does not experience cost savings in other areas .
ALTERNATE ACTIONS
1 . Direct staff to renew the insurance policies with the Hart-
ford Insurance Group with the same program coverage as last
year and the change in claims administration.
2 . Request additional information.
RECOMMENDATION
By motion, direct staff to renew the insurance policies with the
Hartford Insurance Group with the same program coverage as last
year and the change in claims administration.
Respectfully submitted,
Bob Boone
BB/pjs
Attachment A
CITY OF SAN JUAN CAPISTRANO
Hartford Specialty Company
Claim Service Proposal
For handling to a conclusion all Automobile Liability and General
Liability Claims arising out of occurrences during a twelve (12)
month period commencing on effective date of excess policy:
Automobile Liability Bodily Injury Claims $250 Per Claim
Automobile Liability Property Damage Claims $145 Per Claim
General Liability Bodily Injury Claims $350 Per Claim
General Liability Property Damage Claims $230 Per Claim
Payable during the month following the month in which claim is reported
to Hartford Specialty Company.
Subject to a minimum fee of $2,500 payable 24 months from inception with
claim fees for all reported claims contributing to the minimum.
An escrow account of $1,000 will be required from which Indemnity and
Allocated expense payments will be made.
Curtis D. Harrell
Secretary and Account Claim Executive
June 12, 1984
CAL/foiN+.r7 �-.rrrvul//✓+1'� �Ns..-.+ff..t- �✓/'!/H/3?X 9Ti/wS' .
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INFINITE IMAGING SYSTEMS
3i<3
23011 Moulton Parkway, Suite#E-8
s Laguna Hills, California 92653
(714) 472-2777
'16U/Dan Gor Insurance Agency
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CITY OF
SAN JUAN CA_.PIFTRANO
LIABILITY INSURA.NCF COMPAPISON
CTIA CTIA PETRAKAS H&W
€8s-za4• dga-gam+ 84-85 84-85
Ins . Co. Twin City Twin City Planet Chicago
Ins . Group Hartford Hartford Reliance Firemans Fund
Rest Guide Rating P+XV A+XV A+XV A+XII
$50 , 000 SIR
950 , 000 CSL
RSIlaQD.O s w4P' loss 3-7,10.0--
$50 ,000
zf10.0--$50 ,000 SIR
150 ,000 Stop Loss
C9--�9Tit1y DO0 CSr,-� C25-1-6 T�
$5 ,000 maintenance
fee if stop loss
exceeded
$50 , 000 SIR
$950 ,000 CSL
±�sss 4f2ry,70tYs
fuL�i r aITDSTFt' r-r3'4 32
$15 , 000 SIR 14 , 539
10 ,000 SIR 15 ,962
5 , 000 DEPUCTIFLE 18 , 491
2 , 500 Deductible 19 , 282
1 , 000 Deductible 20 , 388
500 Deductible 21 , 653
94=v=.2110- cS22.,-.IM t 2.5 .jE3E C5ZE A-32=
Stop Loss * $200 , 000 $150 ,000 $150 , 000
with
maintenance
fee
Claims Adjustment
Cc Hartford Carl Carl
Warren Warren
* 1984-85 stop loss reduced to $150 , 000
Attachment A
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SAN J F4STRA* OW4 92675
N;iN
November 20 , 1984
Ms . Lynne Kauker
Dan Gorman Insurance Agency
P .O . Box 3659
Mission Viejo , California 92690
Dear Lynne :
Enclosed for your transmittal to Hartford are :
1 . Excess escrow fund check for $1000 . 00 .
2 . Executed claim service agreement .
Thank you for obtaining clarification on the Hartford letters .
Sincerely ,
CITY OF SAN JUAN CAPISTRANO
Mike Little
Administrative Services Officer
ML/pjs
Enclosures
cc : City Clerk
•
MEMORANDUM August 16 , 1984
TO : Mary Ann Hanover, City Clerk
FROM: Bob Boone , Director of Administrative Services
SUBJECT : Claims Administration
We met with the City' s new insurance administrator , Hartford , on
August 15th to discuss the procedure for handling claims received
after August 1st . Claims received after this date should be
mailed to
Dan Gorman Insurance Agency
27001 La Paz Road, Suite 254
P .O . Box 3659
Mission Viejo , CA 92690
for further handling and forwarding to Hartford. Hartford will
then review the claim and notify us as to what action to take .
Claims received prior to August 1st will still be handled by
Carl Warren.
If you have any questions , please let me know.
J4' 1-
BB/pj s
cc : City Manager
City Attorney
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SAN JLK9,7"F15TR"Q.CAt4FORNIA 92675
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August 9 , 1984
Dan Gorman
27001 La Paz Road
Suite 218
Mission Viejo, California 92691
Re: City Insurance Coverage - Liability insurance
Dear Mr. Gorman:
At their meeting of August 7 , 1984 , the City Council
directed staff to renew the insurance policies with the Hartford
Insurance Group with the same program coverage as last year with
a change in claims administration.
Thank you for your cooperation.
Very truly yours,
MARY ANN HANOVER, CMC
City Clerk
MAH/mac
cc: Director of Administrative Services
Carl Warren