HomeMy WebLinkAbout374454 ARTHUR J GALLAGHER RISK MGT SERVICES - CONTRACT - RFP - P1158 INUSRANCETHIS COMPENSATION AGREEMENT is made and entered into and effective the First day of
May, 2009 ("Effective Date") by and between the CITY OF FORT COLLINS, CO, a Colorado
Public Entity ("Client"), and ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES, INC.,
an Illinois corporation ("Gallagher").
This Agreement shall commence on the Effective Date for a term of one (1) year and
shall automatically renew on the first anniversary of the Effective Date and annually
thereafter for additional one- (1) year terms but may be terminated by either party at any
time upon thirty (30) days prior written notice.
II. OBLIGATIONS OF GALLAGHER
Gallagher will provide the services set out on Exhibit A attached hereto (collectively, the
"Services") to Client. If the Services include the placement of insurance coverages,
Gallagher will use its commercial best efforts to secure such insurance coverages on
Client's behalf. In the event an insurance company cancels or refuses to place such
insurance coverages, Gallagher will use its commercial best efforts to obtain the
coverage from another insurance company.
III. OBLIGATIONS OF CLIENT
In lieu of usual and customary brokerage commission, Client shall remunerate Gallagher
an annual fee of $52,000 for the Services set out in Exhibit A for its solicitation and
acquiring of insurance products for the City and various risk management services as
further described in Exhibit A. Upon receipt of commission on the Fine Arts policy
(annually) for City of Fort Collins and the Workers' Compensation policy (quarterly) for
Poudre Fire Authority, Gallagher will credit any commissions received against the
amount of the annual fee. Such amount of commissions credited shall not exceed
$52,000. Such fees are pursuant to and in compliance with Colorado Department of
Insurance Regulation 1-2-9, promulgated under the authority of Section 10-1-109, 10-4-
404 and 10-16-107(1), C.R.S. effective June 1, 1994, regulation amended effective
September 1, 2003.
Such fee may be revised at the time of renewal of this Agreement by the execution of an
amendment to this Agreement signed by the parties hereto. The Risk Management
Service(s) shown on Exhibit A are additional to the scope of Solicitation, Acquiring and
Maintaining Insurance Products (hereinafter "Placement") services performed by
Gallagher for the placement or maintenance of insurance provided for herein. Should
Client choose to do so, Client may elect to receive only the Risk Management Services
and choose to not receive the Placement services upon which time Client and Gallagher
agree to re -negotiate the compensation to Gallagher. If work is required to be performed
in addition to the Services noted in Exhibit A, Client agrees to compensate Gallagher for
such additional work at its usual and customary rates. So long as the terms and
conditions of the Services are substantially similar and Gallagher's performance is
acceptable, in subsequent years the annual fee shall be increased 3% over the prior
year, and shall be payable and earned as provided herein.
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IV. DISCLOSURES
A. In addition to such fees and commissions provided herein, Gallagher may also
receive investment income on fiduciary funds temporarily held by it, such as
premiums or return premiums. Other parties, such as excess and surplus lines
brokers, wholesalers, reinsurance intermediaries, underwriting managers, captive
managers and similar parties, some of which may be owned in whole or in part
by Gallagher's corporate parent, may earn and retain usual and customary
commissions and fees in the course of providing insurance products to clients.
Gallagher may also participate in contingent commission arrangements with
insurance companies that provide for additional contingent compensation if
underwriting, profitability, volume or retention goals are achieved. Such goals
are typically based on the total amount of certain insurance coverages placed by
Gallagher with the insurance company, not on an individual policy basis. Any
such fees or commission will not constitute compensation to Gallagher under
Section III. above.
B. Gallagher's fees under this Agreement shall be fully earned on the Effective Date
(and any renewal thereof), and payable on invoicing. Client is responsible for
payment of premiums for all insurance placed by Gallagher on its behalf. If any
amount is not paid in full when due, including premium payments to insurance
companies, that nonpayment will constitute a material breach of this Agreement
that will allow Gallagher to immediately terminate this Agreement, at its option,
without notice to Client.
C. Where applicable, insurance coverage placements which Gallagher makes on
Client's behalf, may require the payment of federal excise taxes, surplus lines
taxes, stamping or other fees, to the Internal Revenue Service (federal), various
state(s) departments of revenue, state regulators, boards or associations. In
such cases, Client is responsible for the payment of such taxes and/or fees,
which will be identified separately by Gallagher on invoices covering these
placements. Under no circumstances will these taxes or other related fees or
charges be offset against the amount of Gallagher's brokerage fees or
commissions referred to herein.
D. Gallagher will not be operating in a fiduciary capacity, but only as Client's broker,
obtaining a variety of coverage terms and conditions to protect the risks of
Client's enterprise. Gallagher will seek to bind those coverages based upon
Client's authorization, however, Gallagher can make no warranties in respect to
policy limits or coverage considerations of the carrier. Actual coverage is
determined by policy language, so read all policies carefully. Contact Gallagher
with questions on these or any other issues of concern.
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V. INDEMNIFICATION
A. Gallagher agrees to indemnify and hold Client harmless from any loss, cost,
damage, or expense (including reasonable attorney's fees) arising from the
negligent acts or omissions of Gallagher.
B. Client agrees to indemnify and hold Gallagher harmless from any loss, cost,
damage, or expense (including reasonable attorney's fees) arising from the
negligent acts or omissions of Client, including any financial obligation to pay
premiums to any insurance company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the
date first written above.
ARTHUR J. GALLAGHER RISK CITY OF FORT COLLINS, COLORADO
MANAGEMENT SERVICE INC.
By: _ = By:5�(�c l�
Name: Karen L. Graham Name: `J James B. O'Neill
Title: Area President Title:
Director of Purchasing & Risk
Management
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CITY OF FORT COLLINS, CO
2009 EXHIBIT A
SOLICITATION, ACQUIRING AND MAINTAINING INSURANCE PRODUCTS
• Use its best efforts to secure the following lines of insurance coverage on Client's behalf:
Commercial Property, Equipment Breakdown, Inland Marine — Fine Arts, Excess Workers'
Compensation, Public Dishonesty - Crime, Fiduciary Liability (City and Poudre Fire Authority),
and Poudre Fire Authority Workers Compensation.
• Develop a collaborative marketing strategy with Risk Management outlining the strategy for
renewal of the City's insurance coverages. This includes providing the City with activities
taking place nationally and locally on the City's behalf.
• Prepare insurance submission specifications and present to markets.
• Market coverages as required.
• Negotiate with underwriters to secure the broadest coverages at the most economical costs.
• Present renewal programs and options to the City for consideration.
• Prepare a working summary of insurance including terms, conditions and endorsements.
• Coordinate notice of claims and / or losses to underwriters.
• Prepare certificates of insurance and endorsements as requested -by the City.
• Obtain answers from underwriters to policy coverage questions as requested.
• Provided day to day account administration including but not limited to issuing binders,
invoices, verifying policies, endorsements as required.
• Assist the City in the creation and maintenance of underwriting data regarding City property
and premises.
• Assist in the preparation and/or handling of first and third party claims, as requested and act as
claims advocate as needed.
• Maintain comprehensive schedule of Property values that will allow us to achieve the most
competitive rates, terms and conditions in the marketplace.
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CITY OF FORT COLLINS, CO
2009 EXHIBIT A- (CONTINUED PAGE 2)
SOLICITATION, ACQUIRING AND MAINTAINING INSURANCE PRODUCTS
Provide Claim Advocacy Services including acting as the City's advocate in claim disputes with
carriers; coordinate with the City's Risk Manager and City Attorney on claims investigations
when requested, and if necessary, conduct post -loss visits to assist in proper claims
preparations and attend meetings when required.
Assist the City in placing ancillary coverages as required.
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CITY OF FORT COLLINS, CO
2009 EXHIBITA-(CONTINUED PAGE 3)
RISK MANAGEMENT SERVICES
• Assist in assessment of risk exposures.
• Provide recommendations to enhance the City's Risk Management and Insurance Program.
• Participate in Risk Management meetings to review performance against objectives as stated
in the Broker Service Plan.
• Prepare and submit special reports, loss analyses, etc. as requested including allocation of
premium and fees between clients divisions and departments.
• Provide Property value and Workers' Compensation benchmarking services.
• Provide basic loss forecasting services using software applications and on-line solutions,
generating Workers' Compensation loss picks for Risk Management purposes.
• Provide ERM-6 filings to NCCI. We can also calculate and analyze Workers' Compensation
Experience Modification Factors.
• On Property, perform a loss limit analysis to confirm maintaining a $100,000,000 loss limit is
an appropriate level given the exposure basis.
• Provide contract administration — this includes analyzing current contract language with
respect to insurance provisions; evaluating insurance requirements and indemnification
agreements with contracting entities; evaluating tracking methods for maintaining contractor
insurance compliance; developing customized contracting compliance forms and insurance
requirement checklists; revising contract insurance provisions tracking with insurance policy
changes; and amending compliance forms as needed.
• Provide Risk Control Services oversight of company risk control services; provide other with
Risk Control services up to 20 hours (over 20 hours, additional fees apply). This includes
assistance in developing and assisting in presentations for risk control training and education
programs.
• Assess to Gallagher Insight'"'. The City will be able to review market trends, articles of
interest from our extensive document library.
• Provide Risk Management audits to assist the City in reviewing its risk management programs
and protocols.
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CITY OF FORT COLLINS, CO
2009 EXHIBIT A (CONTINUED PAGE 4)
RISK MANAGEMENT SERVICES
• Provide training seminars — this can include crime exposures, contractual risk transfer,
emerging risks, pollution risks and solutions, surety bonding, risk mapping and special events.
• Provide an annual Stewardship Report.
• Access to Gallagher University — seminars and classes designed to provide our internal staff
and clients with educational opportunities to learn about a variety of topics related to
insurance, safety compliance, disaster recovery planning, third party contract guidelines and
with emphasis on construction, surety bond, etc.
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