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HomeMy WebLinkAbout132385 APPLIED RISK SOLUTIONS - CONTRACT - RFP - P891 RISK MANAGEMENT INSURANCE CONSULTANTPROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT made and entered into the day and year set forth below, by and between THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, hereinafter referred to as the "City" and Applied Risk Solutions Inc., hereinafter referred to as "Professional". W ITNESSETH: In consideration of the mutual covenants and obligations herein expressed, it is agreed by and between the parties hereto as follows: t" 1. Scope of Services. The Professional agrees to provide services in accordance with the scope of services attached hereto as Exhibit "A", consisting of seven (7) pages, and incorporated herein by this reference. The City understands that for the Professional to perform the Scope of Services, the City must make available information as described in Exhibit "B" consisting of one (1) page, and incorporated herein by this reference. 2. The Work Schedule. The services to be performed pursuant to this Agreement shall be performed in accordance with the Work Schedule attached hereto as Exhibit "C", consisting of one (1) page, and incorporated herein by this reference. 3. Contract Period. This Agreement shall commence June 10, 2003, and shall continue in full force and effect until June 10, 2004, unless sooner terminated as herein provided. In addition, at the option of the City, the Agreement may be extended for additional one year periods not to exceed four (4) additional one year periods. Pricing changes shall be negotiated by and agreed to by both parties and may not exceed the Denver - Boulder CPI-U as published by the Colorado State Planning and Budget Office. Written notice of renewal shall be provided to the Service Provider and mailed no later than ninety (90) days prior to contract end. 4. Early Termination by City. Notwithstanding the time periods contained herein, the City may terminate this Agreement at any time without cause by providing written notice of Advantages of Appointment of a Single Broker No market disruption. Increased flexibility in exploring combinations of insurers to underwrite the program. ❖ Reduce time commitment for the Public Entity. ❖ Specialty and excess lines can usually be marketed alongside primary coverages. ❖ The broker can assist in the preparation of specifications. Disadvantages of Appointment of a Single Broker ❖ Fewer markets are approached. ❖ Benefits of competition are lost. There are several conditions that influence the use of different techniques. If these conditions exist, this will be determined from the policy review and a market canvas identifying the number of viable alternatives existing in the marketplace. Step Four - Broker Selection Process/Specification Design & Recommendations In the RFP presented to us by the City, we were asked to help in writing the broker selection RFP, if deemed necessary. Since we spend a great deal of our time acting as professional insurance buyers, we have developed a system that facilitates high levels of information for good decisions in broker selection. In performing the services requested by the City, we would make available this system and assist the City in its integrating it with the City's current process, if appropriate. This system was revamped in 2002 from feedback received on several broker selection processes. The approach utilized is intended to objectively measure broker qualities. Additional information we obtain via our system is: ✓ Markets that they would select in order of preference if they were chosen to go to market. This allows us to determine redundancies in markets as well as how well the broker knows the marketplace. ✓ Broker's customary services and fee ranges. We don't like to be surprised with these at proposal analysis time. In using this system for the Broker Selection process performed by ARS for Boulder County, it proved to be very effective and easier to administer and score. Step Five — Broker Selection Via Scoring Process Once the brokers submit proposals, we plan to assist in the scoring of the responses. Step Six — Market Assignment Assistance The broker's market preferences should be known in screening the brokers, if performed. This step is a verification of preferences. This prior action will help control the costs of this activity and facilitate greater enthusiasm when actual assignments are made. As far as our actual assistance in this step of the process, we will: ✓ Enter the broker market requests in our already prepared analysis spreadsheet. ✓ Assign markets via standard market assignment processes. ✓ Respond to any broker concerns. ✓ Reconcile any confusion or violations. Step Seven — Coverage Sections Preparation Following our review of the current program and a review of our findings with the City, we will establish with the City those areas in coverage design needing modification. These coverage changes, as well as other previously established "best practices" program design features will be established in the sections of the bid package that the City has designated as our responsibility. These sections are the general coverage conditions, program design, and coverage design sections. Further, we understand that the City will be generating other portions of the specifications. We plan to be proactive in assisting the City to whatever level necessary to ensure that a comprehensive bid package is released. In summary for this step, we will: ✓ Review with the City a recent example of our fully developed Underwriting package. ✓ Make it available as a model to follow, if desired by the City. ✓ Review the information list in Section VII and answer any questions the City has. ✓ Update and provide to the City the general coverage conditions, program design, and coverage design sections for inclusion in the submission. ✓ Update and provide the cost and coverage analysis checklists for the markets to include in their proposal to simplify and improve analysis comparisons. ✓ Make available our standard sections should this be deemed helpful by the City. ✓ Help obtain any information needed that the City is having difficulty in securing! ✓ Answer any questions that arise in the City's process of submission preparation. ✓ Review and help finalize the package prior to release. +NOTE: Increased levels of information are now required of the markets, therefore it will be helpful in availing this information to the markets. As previously indicated, we typically develop specifications on a turn key basis, but realize the City's desire to handle much of the work in-house. Please keep in mind we desire to be helpful and supportive. We have passed through economies achieved from our past work for the City and other public entity work conducted recently. Step Eight — Marketing Assistance In this step, we will: ✓ Field underwriting and program design questions. ✓ Place necessary follow-up calls to track carrier progress. ✓ Answer any questions that the City has and assist the City by advising it on broker information requests. ✓ Midway through the process have the brokers complete a "notice of intent' form disclosing those important markets that they will be quoting. Step Nine — Analysis of Proposals This is perhaps the most important part of the study, since it directly leads to the binding of the protection for the City. ARS recognizes this and takes great care in analyzing and presenting the best alternatives. Our work on this step in the process includes: ✓ Carefully analyze the proposals and provide the City a report covering our analysis, including information on the most favorable bids and our recommendations. Our analysis will also include the pro and cons for all major alternatives. ✓ Conduct any final negotiations to achieve added improvements. ✓ Secure through negotiation specific levels of services that may include; property valuations, loss control, customize claims runs, or other valuable risk management support determined to be appropriate. ✓ Premium stability history and future projects of program cost changes. ✓ Send an agreement letter to the successful participant outlining all terms and conditions of the proposed program, including confirmation of all terms agreed to in our negotiations and require signature as part of binding coverage. Step Ten — Compliance Review As an included service, we will review policies for the City of Fort Collins and Poudre Fire Authority (PFA) for compliance with the letter of agreement, the program proposal, and bid specifications. Any deviations will be summarized in a letter. We will assist the City and PFA in achieving inclusion of the omitted items until completion. Meetings In conjunction to performing the above services, we anticipate three meetings with the City at its offices. In addition to including estimate costs for these meetings, we offer unlimited conference calls needed to be effective in performing the outlined services and related goals. Exhibit "B" LIST OF INFORMATION NEEDED TO PERFORM SERVICE 1. Complete copies of all City insurance policies forming a part of the study. 2. Property Statement of Values, including property address, type of construction, year build, fire protective devices, number of stories, FEMA flood zone and occupancy. 3. A copy of most recent applications used for coverage pertaining to policies now in force. 4. Copy of the Insurance Proposal for last renewal prepared by broker. 5. Copy of the Insurance Summary prepared by broker. 6. Copies of any mutual aid agreements. 7. Copy of broker's most recent proposal for services and fee schedule. 8. An "application for Public Entity including Public Officials that will need to be completed. LIST OF INFORMATION NEEDED FOR COMPREHENSIVE SPECIFICATIONS 1. Five -years of insurance company loss -runs for all lines of coverage. 2. Five-year premium history. 3. Loss Analysis recaps to be determined once engaged, however these may include: Listing of all liability (general, auto, and public officials' claims of $100,000 or more against the City along with a one -paragraph description of the incident/claim. This should cover a minimum of five years, however ten or more years is preferred. 4. Vehicle Schedule, including year, make, mode, VIN number, and cost new. This can be provided by department. For Trucks and Truck -Tractors (other than pick-ups) provide GVW & GCW respectively. For any buses or passenger vans provide passenger capacity. 5. Drivers Listing and copy of City's drivers' license review process/procedure. 6. Mobile equipment and miscellaneous property floater schedules. 7. Electronic data processing hardware & software schedules. 8. Audited Annual Financial Report and the most recent quarterly financial statements. 9. Latest budget as adopted. 10. Safety, Loss Control, And Employee Manuals and/or summaries. 11. Copy of the most recent actuarial report on self -insured programs that are the subject of this project. 12. Copies of brochures for Parks and Recreation Programs 13. Copies of any waivers required of volunteers or participants in a City programs. 14. A one to one and one-half page write-up providing background information on the City. 15. Photos or illustrations of buildings having combined building and contents limits greater that $300,000. (All properties may be included.) 16. 'Applications that will need to be completed: a. Exposure Survey mentioned earlier. b. Employee Dishonesty including employee classification schedule. c. Pollution Liability and/or Underground Storage Tank Liability (if coverage needed) '(Applied Risk Solutions to provide blank applications) Exhibit "Crr City of Fort Collins, Colorado 2003 P&C INSURANCE MARKETING POSSIBLE TASK & TIMETABLE* Preparation: I. Consultants meeting with Client to Discuss Project 6/2/2003 2. Renewal Information Request List to Client 5/7/2003 3. Gather Renewal Information 6/22003 to 6/16/2003 4. Program Review 6/162003 to 7/12003 5. Prepare Bullet Report on program issues 7/l2003 to 7/152003 6. Issue Report 7/152003 7. Preparation of Renewal Bid Package 7/152003 to 8/152003 Broker Selection, if desired: 8. Public Notice & Special Invitation to Select Brokers 6/16/2003 to 6/302003 9. Broker Screening Packets Released 6/162003 to 6/302003 10. Response from Agents/Brokers Due 8/l2003 11. Scoring & Broker Selection 8/112003 to 8/152003 Marketing: 12. Request Market Assignments from Brokers 8/152003 13. Receive Market Requests from Brokers 8222003 14. Assign Markets 9/11/2003 15. Assemble Bid Packets 7/152003 to 8292003 16. Release Bid Package 9/l/2003 17. Underwriting Information Rev. by Underwriters 75 days (can be 60 days) 18. Underwriters Release Indications NA 19. Negotiations NA 20. Final Quote Due Date to Broker 11212003 Report on Results And Negotiations: 21. Brokers Analyze Quotes & Prepare Proposals 11212003 to 12/52003 22. Final Proposal Due Date 12/52003 23. Renewal Meeting 12/122003 24. Proposal Analysis 12/52003 to 12/192003 25. Written report with Recommendations Issued to Client 11212003 26. Client's Review of Report and Recommendations 12222003 to 12262003 27. Coverage Agreement Letter 12262003 28. Implementation of Selected Program 1 /l2004 POLICY COMPLIANCE REVIEW: 29. Review Insurance Program For Compliance 322004 • This task and timetable follows our market experience. We would like to conclude the analysis and decision phase prior to Christmas. The market may not cooperate. It will need to be finalized with the brokers input in mind. Revised 5/8/03 Confidential APPLIED RISKSOLUTIONS, INC. COFC/2003 t&t termination to the Professional. Such notice shall be delivered at least fifteen (15) days prior to the termination date contained in said notice unless otherwise agreed in writing by the parties. All notices provided under this Agreement shall be effective when mailed, postage prepaid and sent to the following addresses: Professional: City: With Copy to: Applied Risk Solutions City of Fort Collins, Purchasing City of Fort Collins, Risk Mgt 12200 E. Briarwood, Ste 205 PO Box 580 PO Box 580 Englewood, CO 80112 Fort Collins, CO 80522 Fort Collins, CO 80522 In the event of any such early termination by the City, the Professional shall be paid for services rendered prior to the date of termination, subject only to the satisfactory performance of the Professional's obligations under this Agreement. Such payment shall be the Professional's sole right and remedy for such termination. 5. Design, Project Indemnity and Insurance Responsibility. The Professional shall be responsible for the professional quality, technical accuracy, timely completion and the coordination of all services rendered by the Professional, including but not limited to designs, plans, reports, specifications, and drawings and shall, without additional compensation, promptly remedy and correct any errors, omissions, or other deficiencies. The Professional shall indemnify, save and hold harmless the City, its officers and employees in accordance with Colorado law, from all damages whatsoever claimed by third parties against the City; and for the City's costs and reasonable attorneys fees, arising directly or indirectly out of the Professional's negligent performance of any of the services furnished under this Agreement. The Professional shall maintain commercial general liability insurance in the amount of $500,000 combined single limits, and errors and omissions insurance in the amount of $1,000,000. 6. Compensation. In consideration of the services to be performed pursuant to this Agreement, the City agrees to pay Professional on a time and reimbursable direct cost basis according to the following schedule: Hourly billing rates: James Grahamm $125 HR Jennifer Johnson $ 35 HR Laura Sarratt $ 35 HR Harriett Gershman $ 35 HR Reimbursable direct costs: as billed with maximum compensation (for both Professional's time and reimbursable direct costs) not to exceed Seven Thousand Seven Hundred Twenty Five Dollars ($7,725). Monthly partial payments based upon the Professional's billings and itemized statements of reimbursable direct costs are permissible. The amounts of all such partial payments shall be based upon the Professional's City -verified progress in completing the services to be performed pursuant hereto and upon the City's approval of the Professional's reimbursable direct costs. Final payment shall be made following acceptance of the work by the City. Upon final payment, all designs, plans, reports, specifications, drawings and other services rendered by the Professional shall become the sole property of the City. 7. City Representative. The City will designate, prior to commencement of work, its project representative who shall make, within the scope of his or her authority, all necessary and proper decisions with reference to the project. All requests for contract interpretations, change orders, and other clarification or instruction shall be directed to the City Representative. 8. Monthly Report. Commencing thirty (30) days after the date of execution of this Agreement and every 151h of the month thereafter, Professional is required to provide the City Representative with a written report of the status of the work with respect to the Scope of Services, Work Schedule, and other material information. Failure to provide any required monthly report may, at the option of the City, suspend the processing of any partial payment request. 9. Independent Contractor. The services to be performed by Professional are those of an independent contractor and not of an employee of the City of Fort Collins. The City shall not be responsible for withholding any portion of Professional's compensation hereunder for the payment of FICA, Workers' Compensation, other taxes or benefits or for any other purpose. 10. Personal Services. It is understood that the City enters into this Agreement based on the special abilities of the Professional and that this Agreement shall be considered as an agreement for personal services. Accordingly, the Professional shall neither assign any responsibilities nor delegate any duties arising under this Agreement without the prior written consent of the City. 11. Acceptance Not Waiver. The City's approval of drawings, designs, plans, specifications, reports, and incidental work or materials furnished hereunder shall not in any way relieve the Professional of responsibility for the quality or technical accuracy of the work. The City's approval or acceptance of, or payment for, any of the services shall not be construed to operate as a waiver of any rights or benefits provided to the City under this Agreement. 12. Default. Each and every term and condition hereof shall be deemed to be a material element of this Agreement. In the event either party should fail or refuse to perform according to the terms of this agreement, such party may be declared in default. 13. Remedies. In the event a party has been declared in default, such defaulting party shall be allowed a period of ten (10) days within which to cure said default. In the event the default remains uncorrected, the party declaring default may elect to (a) terminate the Agreement and seek damages; (b) treat the Agreement as continuing and require specific performance; or (c) avail himself of any other remedy at law or equity. If the non -defaulting party commences legal or equitable actions against the defaulting party, the defaulting party shall be liable to the non -defaulting party for the non -defaulting party's reasonable attorney fees and costs incurred because of the default. 14. Binding Effect. This writing, together with the exhibits hereto, constitutes the entire agreement between the parties and shall be binding upon said parties, their officers, employees, agents and assigns and shall inure to the benefit of the respective survivors, heirs, personal representatives, successors and assigns of said parties. 15. Law/Severability. The laws of the State of Colorado shall govern the construction, interpretation, execution and enforcement of this Agreement. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement. THE CITY OF FORT COLLINS, COLORADO By: ( , - --, p m . O' eill II, CPPO, FNIGP Director f rchassing 8 Risk Management DATE: ( 3 By: � Title CO PORATE PRESIDENT OR VICE PRESIDENT Date: 1///X/ 0 ATTEST: 9�uw� i (Corporate Seal) Corporate Secretary EXHIBIT "A" Scope Our proposed risk management approach coincides with the specified approach of the City. Our scope of work includes, at a minimum, the following requested services (underlined items denote broadening and/or edification of the services to be provided): 1. Recommend the best process to use to approach the insurance markets based on our recent experience and review of the insurance marketplace. 2. Review the City's RFP criteria for broker selection and make recommendations, if needed. Once proposals are submitted, assist with broker selection by reviewing proposals and participating in interviews, as deemed necessary. 3. Assist with market assignments to brokers, if a multiple broker marketing is deemed advantageous. 4. Review current insurance programs and make recommendation for program enhancements. Following our program review, we will prepare ,general conditions, plan design, and coverage specifications sections for bid specifications, along with cost and coverage worksheets to facilitate a thorough proposal analysis. It is difficult for any proposer to design coverages without reviewing your current program; this is why we have included hours for this. *Note: We do not propose actual policy language as this may restrict coverage. Carriers are responsible for policy language, so that any ambiguities are reconciled in favor of the City. We will troubleshoot proposed policy language during our proposal analysis. 5. Field underwriting questions, after specifications are released. 6. Analyze insurance bids and prepare written recommendations within fourteen (14) days after the bid opening. 7. Assist with last minute negotiations with carriers if necessary. 8. Review issued policies to verify compliance with specifications. We are available, well qualified, and motivated to perform the requested services. To ensure that the process is effective we offer our standard timetable modified to apply to the City's coverage anniversary. This can be further modified to service the needs of the City. We offer it to show our level of commitment and attention to detail. Normally, we would like to implement the renewal in advance of the Christmas Holiday; however, the market will be working on January renewals in December and typically not before. January renewals are problematic. We believe the advantages of a change in renewal date warrants discussion. Details on our services and approach are broken down into ten parts that are covered in the following sections. These sections are arranged in the order that we suggest they occur. 21 Step One - Program Audit 0 Step Two - Coverage and Risk Financing Design Analysis and Review with Management 0 Step Three Insurance Marketing Approach Assistance Rl Step Four - Broker Selection Process/Specification Design and Recommendations Z Step Five - Broker Selection Via Scoring Process C�1 Step Six - Market Assignment Assistance 0 Step Seven - Coverage Sections Preparation Q Step Eight - Marketing Assistance Z Step Nine - Analysis of Proposals Rl Step Ten - Compliance Review Step One - Program Audit We understand that the City does not wish to have ARS perform a risk analysis. In our typical approach, we would perform an exposure analysis, since this is an advisable prerequisite to coverage design. However, the City has not requested this. Therefore, we will describe the process to contrast it to what we are proposing. In an exposure analysis, we gather information from various sources and interact with City personnel. Our analysis typically begins with the following and sometimes requires additional procedures, depending on the results of our findings. ➢ Conduct interviews to identify, analyze, and quantify the City's property and casualty exposures, both operational and contractual. Interviews will include visits with: Director of Finance, City Attorney, and the Risk Manager. ➢ Inspect the physical premises and City operations for further exposure identification. ➢ Review claims experience to determine the cost and coverage effectiveness of the current program. ➢ Review sample contracts, such as, the leases on real and personal property, agreements for hazardous and non -hazardous waste disposal, concessionaire agreements, construction agreements, etc. Our review would focus on insurance requirements and risk transfer clauses. Exposure Identification. As you have requested, we will aid in specification design and therefore, we will review all of the City's policies for coverage and pricing efficiency. We will then address gaps and overlaps, based on Gallagher's Public Entity application or the completion of an exposure questionnaire that we have developed for Cities, and our familiarity to the City and other municipalities. We advocate the use of whichever document is the most thorough. This survey will also help us with our coverage assessment and program design work. We will evaluate the appropriateness of overall program design, and comment on coverage enhancements, the level of opportunity for their inclusion in the policies, and their approximate cost. We recommend the City use the selected document as the underwriting submission application as well. We understand the City has secured the following coverages: - Property and related coverages - Excess Workers' - Crime/Public Dishonesty - Boiler & Machinery (Equipment (Breakdown) Loss of Sales Tax Revenue (Possibly included in Property) Compensation (City only) - Pinnacol Workers' Compensation (PFA only) - Excess Liability * * Note: This protection includes General Liability, Automobile Liability, Police Liability, and Public Officials Liability. We will review policy coverage in conjunction with the Governmental Immunity Statute to determine: where it dovetails with Governmental Immunity, provides contingency coverage in the event governmental immunity is amended or overturned, and the level of protection afforded for claims falling outside the immunity statutes, such as federal, out-of-state liability, contractual liability, and breach of contract type actions. We have developed and maintain a comparison of terms of the leading liability writers for cities and the broad property writers. This has been updated each year. We will assess the City's coverage from both a customary and a needs basis. We believe this level of detail is unique to ARS. Step Two — Coverage and Risk Financing Design Analysis and Review with Management Here we review concerns stemming from our review of your current policies. Our review addresses: ✓ Important coverages existing in current policies. ✓ Coverage enhancements and approximate costs. ✓ Appropriateness of limits and retentions to determine coverage design specifications.' ✓ Review reasonableness of the City's property valuation methodology for trouble shooting specification & plan design. ✓ Itemized recommendations addressing cost and coverage effective solutions. ✓ Recommendations covering other necessary improvements. Here, and in the implementation of our recommendations, the City will greatly benefit from our recent experience with the public entity marketplace. NOTE: The Market has been driving buyers to higher retentions. Many public entities have opted to go with higher retentions without determining the "total cost of risk." We would like to help the City review the viability of higher retentions at this juncture in our services. Step Three — Insurance Marketing Approach Assistance We understand the City's past method of approaching the marketplace and that the City may or may not continue with this means, based on its goals, relationships, and consultant's input. Here we will discuss goals and conduct further market analysis, if necessary to ensure that the proper approach is undertaken. We will provide such recommendation following our audit and market canvas to ensure full consideration of all the pertinent facts. This will allow the City position to be supported and understood by all that may have concerns or questions. In forming our recommendation, the following techniques will be considered. It is important to note that the "Qualified Competitive Quotes" process that the City used in the past has become increasingly difficult as the number of public entity markets have diminished. The general advantages of this methodology and those of the alternatives are presented following our brief description of the different techniques. Appointment — An outright appointment of a single broker is made without competitive bids. This is the cleanest method. Broker's Proposal — Selected brokers are requested to present a conceptual proposal for an insurance program, without approaching any markets. This is done following or in tandem with a broker screening process. Then generally one, sometimes two brokers are sent into the marketing with exclusives on specific lines of coverage. Qualified Competitive Ouotes — The insured, selects two or three brokers, giving written specifications to each, authorizing them to negotiate in specific markets to avoid conflict. Each broker can submit a list of companies he plans to use, listed in order of preference. The insured checks the list and gives letters of authorization to each broker for those companies he appears best able to represent. Where companies appear on more than one list, the broker placing it highest on his preference list may be authorized to use it. Unrestricted Competition — Any firm is allowed to quote on written specifications. Sometimes the bid procedure is advertised. Advantages of the Qualified Competitive Quotes Technique ❖ Does not disturb the markets. ❖ Creates competition between underwriters and between brokers, probably with lower premium. ❖ Eliminates an appearance of impropriety. ❖ Increases insured's exposure to new ideas and developments of other brokers. Ensures a full market canvass and leaves little doubt of securing the best program available. Disadvantages of the Qualified Competitive Quotes Technique ❖ Greater time commitment. ❖ Potential market disruption. ❖ Added difficulty to market specialty and excess lines in conjunction with primary coverages. ❖ Combinations of insurers restricted by market allocations.