Loading...
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 -2- 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 -3- 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' . �ht1 r pow rAr-t. �G'/�yyvy 9bmi.vs?!�✓Jj"-- � /"�lls"-r�rsh..Ga's. lra�. - INFINITE IMAGING SYSTEMS 3i<3 23011 Moulton Parkway, Suite#E-8 s Laguna Hills, California 92653 (714) 472-2777 '16U/Dan Gor Insurance Agency i 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 % pii*0'AMEijA'A 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 ( J "/� /`Cf/CGf rte- dhv✓t-. 5I1pI g,�I Mow 3240 0 P 4*6iAvsiAA-rcr, SAN JLK9,7"F15TR"Q.CAt4FORNIA 92675 -t'H<ftX4&30 17r 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