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Home My WebLink About374454 ARTHUR J GALLAGHER RISK MGT SERVICES - CONTRACT - RFP - P1158 INUSRANCE (3)Administrative Services Purchasing Division City of Fort Collins April 28, 2009 Ms. Karen Graham ARTHUR J. GALLAGHER & CO. 6399 S. Fiddler's Green Circle Greenwood Village, CO 80111 VIA E-MAIL KAREN_GRAHAM@AJG.COM RE: CITY OF FORT COLLINS - 2009/10 INSURANCE PROGRAM LETTER OF AGREEMENT Dear Karen: On behalf of the City of Fort Collins, Poudre Fire Authority, Poudre Fire Protection District and the Loveland/Fort Collins Airport, I would like to confirm our agreement to bind the coverages you have proposed with the following carriers, for twelve months effective May 1, 2009. ➢ Property: Lexington ➢ Fiduciary Liability and Public Dishonesty: Travelers ➢ Excess Workers' Compensation: Midwest Employers ➢ Boiler & Machinery: Zurich ➢ Inland Marine — Fine Arts: AXA ➢ PFA/PFPD Workers' Compensation: Pinnacol The agreement to bind coverage is based upon your compliance with your proposal, subsequent correspondence and this Letter of Agreement which outlines below those areas modified or needing additional clarification. The two attachments further clarify our understanding of your offering and form a part of this agreement. Further, all carriers except for Inland Marine and Fiduciary constitute renewal placements based on existing coverage except where noted in the attached summary taken from your proposal entitled, "Major Changes to Expiring Program." Therefore, coverage will be reviewed in that context, as well. 215 Nor1A tt'hr5i?41`• 2nd Floor • P.O. Box 580 • Fort Collins, CO 80522-0580 • (970) 221-6775 • FAX (970) 221-6707 Ms. Karen Graham April 28, 2009 Page 2 1. You will endeavor to have copies of all policies provided to COFC within 90 days of the coverage effective date, if possible. 2. Premiums, and coverages serving as a basis for this agreement are per Attachments I and 11, Cost and Coverage Comparisons, respectively. Limits, deductibles and rates are per your proposal and supporting exhibits. 3. All required binders and certificates will be issued prior to May 1, 2009. See certificate list attached. 4. We recognize AJGs efforts to review coverage forms and complete coverage checklists represent an effort to inventory coverages. This was done since the carriers themselves were not able or willing to complete these. While the City recognizes that these are for illustration purposes and the actual policy language will prevail. We relied on these representations in the process of analyzing the bids received. These serve as a basis for future review efforts of actual policies. Therefore, please take a look at these and forward to the carriers, if appropriate. A complete policy review will be done after policy issuance. 5. The City is aware of the fact that signatures on renewal applications have been requested as a condition of binding and these are being completed and will be forwarded to you shortly. 6. Our portfolio of coverages with the exception of the liability package is all being placed with Gallagher. The liability package (excess general liability, public officials, errors and omissions, and automobile liability and employment practices liability) is being placed directly with States. 7. In addition to the renewal of expiring lines, excluding the liability package, we request that you serve as our broker on PFA/PFPD's workers compensation program with Pinnacol Assurance effective 5/l/09. (A copy of their proposal is attached.) Payrolls have been verified as being correct. 8. A brokerage fee of $52,000 has been quoted and accepted. Any commission paid on the fine arts and workers' compensation will serve as off -sets on this amount. Therefore, ultimately the difference will be returned to the City. Although a schedule will be generated to disclose levels of commissions received based on premium payment structures, it is anticipated by the City based on the fairly large commission paid by Pinnacol that the ultimate level of expense to the City for brokerage fees will be no greater than $10,000. Ms. Karen Graham April 28, 2009 Page 3 If the terms of this Letter of Agreement are correct, please sign the letter returning the original to me with binders today. Sincerely, Y— ?Jaes II,102NI�G�P rof Purchasing and Risk Management ARTHUR J. GALLAGHER & CO. Signed: Enclosures Date cc: Mr. James Graham, Applied Risk Solutions Mr. Lance Murray, Risk Manager, City of Fort Collins M:\COFC\2003 Services\Correspondence\cov_agree _Itr_AJG.doc CLIENT OPT -OUT ELECTION Supplemental or Contingent Commission Dated: 4/19/1 l Effective January 1 of the next calendar year after the above date, the undersigned client of the undersigned retail brokerage subsidiary of Arthur J. Gallagher & Co. ("Gallagher") requests that the insurance policy(ies) issued by the insurance company(ies) indicated below, insuring the risks listed below in the column titled "INSURANCE COVERAGE" for each such insurance company, be EXCLUDED from the following forms of additional compensation that may be payable to Gallagher (SELECT A or B, or Both): A. _xx_ Supplemental commissions B. _xx_ Contingent commissions INSURANCE COMPANY INSURANCE COVERAGE Midwest Employers Excess Workers' Compensation Travelers Casualty & Surety Company Crime and Fiduciary Liability Lexington Insurance Company Commercial Property Zurich American Insurance Company Equipment Breakdown Fidelity Insurance Flood — National Flood Insurance Program Federal Insurance Company Builders Risk Hartford Life and Accident Insurance Accident & Health AXA Art Insurance Company/Huntington T. Block Fine Arts — Inland Marine Pinnacol Assurance Poudre Fire Authority— Workers' Compensation Insurance By-o Fort ollrins� Y� James . O' eill II Director of Purchasing and Risk Management Submitted by Karen Graham, Arthur J. Gallagher Risk Management Services Denver Branch