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HomeMy WebLinkAboutCORRESPONDENCE - PURCHASE ORDER - 9161616This proposal of coverage is intended to facilitate your understanding of the insurance program we have arranged on your behalf. It is not intended to replace or supersede your insurance policies. Proposal of Insurance Poudre Fire Authority 4800 Signal Tree Timnath, Colorado 80547 Project Builders Risk Proposal Poudre Fire Authority 102 Remington Street Fort Collins, CO 80524 Effective: 8/24/15-8/24/16 Presented: September 9, 2015 Karen Graham, CIC, CRM, ARM-P Area Executive Vice President James Martinez Client Service Executive Analisa Murphy, CIC Client Service Manager Arthur J. Gallagher Risk Management Services, Inc. 6399 S. Fiddlers Green Cir., Suite 200 Greenwood Village, CO 80111 www.ajg.com Poudre Fire Authority Arthur J. Gallagher Risk Managent Services, Inc. Table of Contents Sections Page Mission Statement .......................................................................................................................................................... 1 Changes and Developments ............................................................................................................................................ 1 Service Team .................................................................................................................................................................. 2 Named Insured Schedule ................................................................................................................................................ 3 Construction Budget/Pro-Forma Financial Statements .................................................................................................. 3 Marketing Summary ....................................................................................................................................................... 4 Proposed Carriers - Guide to A.M. Best Ratings ............................................................................................................ 5 Builders Risk Insurance Program Coverage Highlights ................................................................................................. 7 Claims Reporting by Policy .......................................................................................................................................... 13 Coverage Considerations .............................................................................................................................................. 14 Gallagher Disclosures ................................................................................................................................................... 17 Bindable Quotations and Compensation Disclosure Schedule ..................................................................................... 20 Proposal Acceptance ..................................................................................................................................................... 21 Poudre Fire Authority Page | 1 Arthur J. Gallagher Risk Managent Services, Inc. Mission Statement We are a global insurance and marketing company with more than 75 years of integrity in working with our clients, colleagues and partner markets to provide risk solutions and services. We are committed to being an active and responsible corporate citizen and involved in the well-being of our communities. Our Mission Is: To provide our clients with innovative, cost-effective risk solutions with the highest level of professional service and integrity. To create an environment for our employees that provides opportunity for growth and development. To build and sustain long-lasting, honest and profitable relationships with our insurance carriers through beneficial objectives and ethical standards. To deliver shareholder value by creating long-term, beneficial partnerships, between our clients, ourselves and our partner markets. Changes and Developments It is important that we be advised of any changes in your operations that may have a bearing on the validity and/or adequacy of your insurance. The types of changes that concern us include, but are not limited to, those listed below: 1. Changes in any operation such as expansion to another state and/or new products. 2. Mergers and/or acquisition of new companies. 3. Any newly assumed contractual liability, granting of indemnities, or hold harmless agreements. 4. Circumstances that may require increased liability insurance limits. 5. Any changes in fire or theft protection, such as the installation of or disconnection of sprinkler systems, burglar alarms, etc. This includes any alterations to the same. 6. Immediate advice of any changes to scheduled equipment such as contractors’ equipment, electronic data processing, etc. 7. Property, of yours that is in transit, unless we have previously arranged for the insurance. 8. Any changes in existing premises including vacancy, whether temporary or permanent, alterations, demolition, etc. Also, any new premises purchased, constructed, or occupied. Poudre Fire Authority Page | 2 Arthur J. Gallagher Risk Managent Services, Inc. Service Team Your service team consists of: Name & Title Phone Number Email Karen Graham Area Executive Vice President 303-889-2538 Karen_Graham@ajg.com James Martinez Client Service Executive 303-889-2526 Jimmy_Martinez@ajg.com Analisa Murphy Client Service Manager 303-889-2590 Analisa_Murphy@ajg.com Anita Bruner Sr. Client Service Associate 303-889-2574 Anita_Bruner@ajg.com Kendall Trump Claim Consultant 303-889-2570 Kendall_Trump@ajg.com Ed Davis Sr. Loss Control Specialist 303-889-2552 Ed_Davis@ajg.com Poudre Fire Authority Page | 3 Arthur J. Gallagher Risk Managent Services, Inc. Named Insured Schedule Named Insureds Poudre Fire Authority First Named Insured shall be the sole and irrevocable agent of each and every Insured for the purpose of: A. Payment of premium; B. Giving or receiving notice of cancellation; C. Requesting amendments to this Policy and accepting amendments to this Policy made by the Company. Delay In Opening Coverage Shall Indemnify the Named Insured only. Additional Insureds: Contractors, subcontractors of every tier (but only with respect to work they are performing). Any architect, engineer or designer; manufacturer or supplier (foregoing is limited to their site activities only precluding coverage respectively under policies for professional liability and products liability and warranty coverage as applicable). Note: Any entity not named in this proposal may not be an insured/additional insured entity. This may include contractors and subcontractors of every tier, partnerships and joint ventures, design professionals, manufacturers and suppliers, tenants, lenders/mortgagees. Coverage for design professionals, manufacturers and suppliers are limited to their site activities only, precluding coverage respectively under policies for professional liability and products liability and warranty coverage as applicable. Construction Budget/Pro-Forma Financial Statements Per enclosed/attached Construction Budget/Pro-Forma Financial Statements or dated 8/17/15 Poudre Fire Authority Page | 4 Arthur J. Gallagher Risk Managent Services, Inc. Marketing Summary Insurance Company AM Best Admitted/ Non-Admitted Quote Status Federal Insurance Company (Chubb) A++ XV Admitted Declined ACE American Insurance Company A++ XV Admitted Quoted Travelers Property Casualty Company of America A++ XV Admitted Quoted Harleysville Insurance Company (Nationwide) A+XV Admitted Quoted Poudre Fire Authority Page | 5 Arthur J. Gallagher Risk Management Services, Inc. Proposed Carriers - Guide to A.M. Best Ratings The above A.M. Best Ratings were verified on the date of the proposal document was created. If the above indicates coverage is placed with a Non-Admitted carrier, the carrier is doing business in the state as a surplus lines or non-admitted carrier. As such, this carrier is not subject to the same regulations, which apply to an admitted carrier, nor do they participate in any insurance guarantee fund applicable in that state. Rating Levels and Categories: A++, A+ Superior B, B- Fair D Poor A, A- Excellent C++, C+ Marginal E Under Regulatory Supervision B++, B+ Good C, C- Weak F In Liquidation S Rating Suspended Financial Size Categories (Reported Policyholders’ Surplus Plus Conditional Reserve Funds) FSC I Up to $1,000,000 FSC IX $250,000,000 to $500,000,000 FSC II $1,000,000 to $2,000,000 FSC X $500,000,000 to $750,000,000 FSC III $2,000,000 to $5,000,000 FSC XI $750,000,000 to $1,000,000,000 FSC IV $5,000,000 to $10,000,000 FSC XII $1,000,000,000 to $1,250,000,000 FSC V $10,000,000 to $25,000,000 FSC XIII $1,250,000,000 to $1,500,000,000 FSC VI $25,000,000 to $50,000,000 FSC XIV $1,500,000,000 to $2,000,000,000 FSC VII $50,000,000 to $100,000,000 FSC XV $2,000,000,000 or more FSC VIII $100,000,000 to $250,000,000 Best’s Insurance Reports, published annually by A.M. Best Company, Inc., presents comprehensive reports on the financial position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best’s Rating which attempts to measure the comparative position of the company or association against industry averages. A Best’s Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance obligations. It is not a warranty of a company’s financial strength and ability to meet its obligations to policyholders. View the A.M. Best Important Notice: Best’s Credit Ratings for a disclaimer notice and complete details at http://www.ambest.com/ratings/notice. Best’s Credit Ratings are under continuous review and subject to change and/or affirmation. For the latest Best’s Credit Ratings and Best Credit Reports (which include Best Ratings), visit the A.M. Best website at http://www.ambest.com. See Guide to Best’s Credit Ratings for explanation of use and charges. Copies of the Best’s Insurance Reports for carriers listed above are also available upon request of your Gallagher representative. Best’s Credit Ratings reproduced herein appear under license from A.M. Best and do not constitute, either expressly or impliedly, an endorsement of (Licensee’s publication or service) or its recommendations, formulas, criteria or comparisons to any other ratings, rating scales or rating organizations which are published or referenced herein. A.M. Best is not responsible for transcription errors made in presenting Best’s Credit Ratings. Best’s Credit Ratings are proprietary and may not be reproduced or distributed without the express written permission of A.M. Best Company. Gallagher companies use A.M. Best Company’s rating services to evaluate the financial condition of insurers whose policies we propose to deliver. Gallagher companies make no representations and warranties concerning the solvency of any carrier, nor does it make any representation or warranty concerning the rating of the carrier which may change. Poudre Fire Authority Page | 6 Arthur J. Gallagher Risk Management Services, Inc. Poudre Fire Authority Page | 7 Arthur J. Gallagher Risk Management Services, Inc. Builders Risk Insurance Program Coverage Highlights Carriers: Harleysville Insurance Company Policy Form: Builders Risk Comprehensive Form- Scheduled Broadened IM 7055 / IM 7050 / CIM 7121 Policy Period: 8/24/15-8/24/16 Named Insured: Poudre Fire Authority Project Name & Address: Poudre Fire Authority 4800 Signal Tree Timnath, Colorado 80547 Covered Perils: “All Risk” of physical loss or damage to property insured including the perils of Flood, Terrorism, and Earthquake per carrier policy form. Poudre Fire Authority Page | 8 Arthur J. Gallagher Risk Management Services, Inc. Key Program/Policy Information, Limits and Sublimits: Builders Risk ‐ Program Summary Insurance Carrier Harleysville Insurance Company AM Best Rating A+ XV Admitted Status Admitted Policy Term: 8/24/15‐8/24/16 Quote Valid Until: 9/26/2015 Total Project Values: $ 5,531,997 Property Damage (Hard Costs) Values $ 5,084,137 Soft Costs Values (Excluding Contingency) $ 447,860 Delayed Completion‐Loss Of Profit/Earnings Values/Rental Income Not covered Existing Building‐Completed Works Not covered Policy Limit: Property Damage (Hard Costs) Limit $ 5,500,000 Program Sublimits: Boiler & Machinery/Equipment Breakdown Included Damage To Existing Building/Completed Works Not Covered Soft Costs/Delay In Opening $ 500,000 Delayed Completion ‐ Loss Of Business Income/Earnings Limit Not Covered Delayed Completion ‐ Period Of Indemnity N/A ‐ Actual loss sustained as respects soft costs (no business income reported) Debris Removal Included in $250,000 Blanket Limit* Earthquake/Earthmovement ‐ Per Occurrence, Term Aggregate Or Annual Aggregate Annual Aggregate Earthquake/Earthmovement Per Occurrence And In The Aggregate $ 2,500,000 Earthquake Sprinkler Leakage Included in Earthquake/Earthmovement Earthquake/Earthmovement ‐ Subsidence Included in Earthquake/Earthmovement Flood ‐ Term Aggregate Or Annual Aggregate Annual Aggregate Flood Per Occurrence And In The Aggregate $ 2,500,000 Foundations And Pilings Included If Reported In Project Values Fungus / Mold Cleanup (Limited Coverage) or Annual Aggregate Limits $100,000, limited to 30 Days Effects Of Law / Ordinance Of Law (Coverage Does Not Apply To Business Interruption, Unless Requested) Included for Undamaged Parts of Building & Limited to $500,000 for Demolition & Increased Cost of Construction Civil Authority / Military Endorsement 14 Days Contract Penalty $ 10,000 Poudre Fire Authority Page | 9 Arthur J. Gallagher Risk Management Services, Inc. Expediting Expenses $ 500,000 Fire Department/Public Safety Service Charges Included in $250,000 Blanket Limit* Fire Protective Equipment Refills/ Recharge Included in $250,000 Blanket Limit* Furniture And Equipment Included in Property Damage Interior Water Intrusion (Rain, Snow, Ice, Sleet, Sand Or Dust) Included Testing (Cold) Included Under B&M Coverage Terrorism Included (if purchased) Landscaping, Trees, Shrubs And Plants (Named Perils Coverage) Included in $250,000 Blanket Limit* Plans, Blueprints, Valuable Papers (Cost To Reproduce Records/Plans) Included in $250,000 Blanket Limit* Pollutant Clean Up or Removal $ 100,000 Protection of Insured Property Pre‐Loss Included in $250,000 Blanket Limit* (limited to 10 days) Offsite Storage ‐ Materials/Equipment Stored Off Site $ 500,000 Transit ‐ Materials/Equipment Stored In Transit $ 500,000 Onsite Trailers $ 25,000 Scaffolding, Forms & Fences ‐ Temporary Works/Falsework Included in $250,000 Blanket Limit* Surface Water (including Drain/Sewer Backup) Included in flood sublimit except Sewer Backup limited to $250,000 Windstorm Included Program Deductibles: All Perils Deductible, Except: $ 5,000 Interior Water Damage $ 5,000 Delay In Opening ‐ Soft Costs/BI/Rental Income 5 Days Earthquake/Earthmovement $ 25,000 Earthquake Sprinkler Leakage $ 25,000 Flood $ 25,000 Windstorm $ 5,000 Key Coverages: Partial Occupancy Allowed Yes Coinsurance None Escalation Clause (Inflation Protection/Change Order End) (%) 10% Reward Coverage $ 50,000 Poudre Fire Authority Page | 10 Arthur J. Gallagher Risk Management Services, Inc. Valuation Replacement Cost Wear &Tear Endorsement Amended To Include Ensuing Loss/Damage Caused By A Covered Peril Adjustable Policy At End Of Project? Yes Blanket Waiver Of Subrogation Yes, Per Policy Language Cancellation Provisions 30 Days except 10 Days for Non‐Payment of Premium Minimum Earned Premium % $ 1,000 Warranties/Protective Safeguards: Warranties/Protective Safeguards Distance between buildings at least 100'; Hot Works Permit & Safety Program; Compliance with loss control recommendations (if any) Premium/Rate: Term (# Days) 365 Days Gross Premium Excluding Terrorism and SL Taxes & Fees (NA)* other T&F's may apply $ 4,589 Terrorism Premium (Optional) Included Total Premium Including Terrorism and Excluding Taxes & Fees $ 4,589 Composite Gross Term Rate Premium $ 0.082952 Composite Gross Annual Rate $ 0.082952 Notes: Please refer to actual policy forms. This is a summary only. Not all coverages or exclusions listed above. ** Harleysville: All coverages included in the $250,000 Blanket Limit of Insurance Territory:  Anywhere in the United States of America, its territories and possessions. Coverage excluded for materials stored in or transported from outside of this territory. Cancellation, Non-Renewal, or Material Modification:  30 Days Written Notice for non-renewal, cancellation, or material modification, except 10 days for nonpayment of premium. No notice of non-renewal or material modification will be provided by non- admitted companies. Short Rate Penalty/Minimum Earned Premium penalties for early cancellations. Conditions of Binding and/or Policy Warranties:  None Coinsurance:  None Reporting Provisions:  None Poudre Fire Authority Page | 11 Arthur J. Gallagher Risk Management Services, Inc. Valuation:  Replacement cost, except Actual Cash Value for Falsework Major Perils Excluded (Included but not limited to):  Cessation of work, whether total or partial;  Change in Temperature - Dampness or dryness of atmosphere, changes in or extremes of temperature;  Coverage for any consulting engineer, architect, or designer, or any person employed by them with respect to their respective professional activities;  Delay in Opening - Breach, suspension, lapse or cancellation of or failure to obtain, maintain or extend any permit, lease, license, contract or purchase order commitments;  Delay in Opening - Consequential loss/penalties for non completion of or delay in completion of insured installation work(s) or noncompliance with contract conditions. Loss of use. Liquidated Damages. Performance Penalties;  Delay in Opening - Import, export or customs restrictions and/or regulations;  Delay in Opening - Interference by strikers or other persons with the transportation of property, the construction, rebuilding, repairing or replacing of property insured hereunder or the occupancy and use of the premises;  Delay in Opening - Non-availability of funds;  Dishonest, fraudulent or criminal Acts;  Earthquake/Earth Movement, unless specifically endorsed hereon;  Enforcement of any governmental or regulatory authority ordinance or law regulating removal, repair, construction or re-construction of the damaged property;  Erosion of graded or planted finish or rough grades;  Failure to use due diligence and dispatch in restoring the damaged property to the condition existing prior to the condition existing prior to the loss or damage;  Faulty, defective or inadequate workmanship, supplies or material; Fault, defect, error, deficiency, inadequate or omission in maintenance, planning, zoning, development or specifications;  Fines or penalties incurred by or imposed on the insured by order of any government agency;  Flood, unless specifically endorsed hereon;  Fungus, Mold, Mildew, yeast, spores, smut, mushrooms, spores or any substance, product or byproduct produced by, released by or arising as a consequence of the past or current existence of fungus. Any expense to remediate the presence or effects of any of the foregoing shall also be excluded;  Interior Water Intrusion, unless specifically endorsed hereon  Landscaping Materials - exclusion for Infestation, disease, freeze, drought and hail, weight of ice or snow or any damage caused by insects, vermin, rodents or animals;  Mechanical and/or Electrical Breakdown, unless specifically endorsed hereon;  Moth, vermin, termites or other insects;  Normal subsidence, settling, cracking, expansion, contraction, bulging or shrinkage of walls, floors, roofs, ceilings, buildings, foundations, patios, walkways, sidewalks, driveways or pavements; unless specifically endorsed hereon;  Nuclear Reaction or nuclear radiation;  Pollutant/Contaminant - Contaminants or Pollutants;  Software and Data Related Losses/Y2K;  Testing Exclusion;  Underground Cables, Pipes and Other Facilities; Poudre Fire Authority Page | 12 Arthur J. Gallagher Risk Management Services, Inc.  Unexplained or mysterious disappearance or shortage disclosed on taking inventory;  Utility Service Interruption;  War, Governmental and Military Action;  Water below the surface of the ground;  Wear and tear, gradual deterioration, inherent vice, latent defect, corrosion, rust, dampness or dryness of the atmosphere;  Weather Condition Exclusions/Wording, unless specifically endorsed hereon;  Workmanship/Design - Alterations, additions, improvements or other changes made in the design, plans, specifications or other contract documents for the work which are required to effect the repair or replacement of the damaged property;  Written or implied guarantee or warranty by any contractor, manufacturer or supplier. The summary above is an outline of the coverages commonly excluded by the various insurers, it does not include all the terms, coverages, exclusions, limitations or conditions of the actual contract language. Major Property Excluded (Included but not limited to):  Accounts, bills, currency, stamps, deeds, evidence of debt, checks, money, notes and security, precious metals, precious stones or other property of similar nature;  Aircraft, mining equipment, railroad rolling stock, any vehicle licensed for highway use, and watercraft;  Any property located at a site that stores, processes, handles or makes use of radioactive materials unless reported to and accepted by the Company. The foregoing shall not apply to locations or property making use of radioactive isotopes contained within equipment used for diagnostic or testing purposes;  Contraband or property in the course of illegal transportation or trade;  Contractor's Equipment, machinery, tools;  Existing Property;  Foundations, Underground Piping and wiring;  Furs, jewelry, jewels, precious or semi-precious-metals, stones or alloys, gold, silver and platinum;  Land & Land Values;  Owner supplied material, equipment, machinery, and supplies unless the value of such material, equipment, machinery, and supplies is included in the estimated Total Project Value;  Property located at other than the location of project except as covered under the Transit or Temporary Offsite Locations Extensions of Coverage;  Property of any type if located on an offshore island or barrier island, regardless of whether or not it is connected to the mainland by bridge, road, or structure, unless specifically endorsed to the Policy;  Prototype, developmental or used machinery and equipment but only as to damage while undergoing any form of testing, commissioning or startup, unless specifically endorsed to the Policy;  Transmission and distribution lines;  Trees, grass, shrubbery, plants, or water;  Underground caverns or underground mines including property contained therein;  Water, Animals, birds or fish; standing timber and growing crops;  Waterborne shipments. The summary above is an outline of the property commonly excluded by the various insurers, it does not include all the terms, coverages, exclusions, limitations or conditions of the actual contract language. Note: Additional coverage limitations and exclusions may apply. Poudre Fire Authority Page | 13 Arthur J. Gallagher Risk Management Services, Inc. Claims Reporting by Policy Direct Reporting – Claims should be reported immediately: Carrier E-mail Address Phone Number Fax Number Harleysville www.harleysvillegroup.com/app_OnlineClaims/ (800) 892-8877 Not Available Reporting to Gallagher – Claims should be reported immediately: All claims for the following primary and excess lines of business will be reported to the Gallagher claims representative designated in the service team commitment. AJG Claims Contacts: Name E-mail Address Phone Number Fax Number Kendall Trump wr-claims@ajg.com Kendall_Trump@ajg.com 303-889-2570 303-889-2571 Poudre Fire Authority Page | 14 Arthur J. Gallagher Risk Management Services, Inc. Coverage Considerations The following coverages are not included in this proposal. We recommend that you consider obtaining quotations for these coverages, in light of your specific exposures. Coverages Status Crime Coverages Forgery & Alteration Coverage not included above. Property of Others Coverage not included above. Theft or Fraud Via Telephone or Telephone (Wire Transfer) Lines Coverage not included above. Theft, Disappearance & Destruction – Inside Theft, Disappearance & Destruction - Outside Coverage not included above. Liability Coverage Aircraft Products Liability Coverage not included above. Employee Benefit Liability Coverage Coverage not included above. General Liability/Excess Liability and/or O.C.I.P Coverage not included above. Liquor Liability Coverage Coverage not included above. Pollution Legal Liability Coverage not included above. Pollution Liability Coverage not included above. Products Recall Coverage Coverage not included above. Umbrella Coverage - Excess Liability Limits for your General Liability, Automobile & Employers Liability Policies Coverage not included above. Automobile Exposures Drive Other Car Coverage (If individual drivers have no other vehicles and do not have personal automobile insurance.) Coverage not included above. Employee as Insured - Scheduled Automobiles Owned by Employees (Requires employee lease agreement) Coverage not included above. Garage Keeper’s Liability – Physical damage for third party vehicles operated by your employees or in your care, custody or control. Coverage not included above. Garage Liability – Liability Coverage for operation of third party vehicles by your employees Coverage not included above. Hired Automobile – Physical Damage Coverage Coverage not included above. Lease Gap Coverage (If vehicles are leased) Coverage not included above. Poudre Fire Authority Page | 15 Arthur J. Gallagher Risk Management Services, Inc. Coverages Status Phone, Radios or other Transmitting Equipment Coverage not included above. Rental Reimbursement - Private Passenger Autos Coverage not included above. Workers Compensation Coverages: New York Disability Insurance Coverage not included above. Stop Gap Coverage – Employers Liability Monopolistic States Coverage not included above. Voluntary Compensation Coverage Coverage not included above. International Exposures International and Ocean Marine Transit – Goods/materials being shipped to or from the United States via air or ocean transit Coverage not included above. International General Liability Exposures – Products being sold or employees conducting business outside the United States Coverage not included above. International Locations – Owned or leased locations outside the United States Coverage not included above. International Property Exposures – Items being processed, held for sale or salespersons samples Coverage not included above. International Transit – Goods being shipped to or from the United States via air or ocean transit Coverage not included above. International Workers Compensation – U.S. employees traveling or foreign nationals hired by you Coverage not included above. Executive Coverages: Director’s & Officer’s Liability Coverage not included above. Employment Practices Liability including Wrongful Termination, Sexual Harassment & Discrimination Coverage not included above. Errors & Omissions / Professional Liability Coverage not included above. Fiduciary Liability Coverage – Covers liability of the fiduciaries due to errors or omissions in the administration of your Pension, 401K or Employee Benefit Plans Coverage not included above. Kidnap & Ransom and/or Product Extortion Coverage not included above. Outside Directorship Liability Coverage not included above. Internet Exposures Business Income resulting from Direct Damage or Site Materials Coverage not included above. Copyright & Trademark Infringement – Internet sites and operations Coverage not included above. Poudre Fire Authority Page | 16 Arthur J. Gallagher Risk Management Services, Inc. Coverages Status Errors & Omissions / Professional Liability Resulting from Internet Operations Coverage not included above. General Liability Resulting from Internet Operations Coverage not included above. Other Coverages Terrorism Coverage –Broader terrorism coverage than TRIPRA (formerly TRIA) which can be tailored to: include various forms of liability and property; be location specific; may include foreign locations; and may be written up to 3-years with non- cancelable provisions Coverage not included above. Since Gallagher does not handle your complete insurance program, these recommendations only reflect items within our scope of responsibility. Poudre Fire Authority Page | 17 Arthur J. Gallagher Risk Management Services, Inc. Gallagher Disclosures Proposal Disclaimer: IMPORTANT: This proposal is an outline of certain terms and conditions of the insurance proposed by the insurers, based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations, conditions of the actual policy contract language. The insurance policies themselves must be read for those details. Policy forms for your reference will be made available upon request. Important Disclosure: We will not be operating in a fiduciary capacity, but only as your broker, obtaining a variety of coverage terms and conditions to protect the risks of your enterprise. We will seek to bind those coverages based upon your authorization, however, we 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 us with questions on these or any other issues of concern. Actuarial Disclaimer: The information contained in this proposal is based on the historical loss experience and exposures that were provided to Arthur J. Gallagher & Co., Los Angeles. This proposal is not an actuarial study. Should you wish to have this proposal reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use. Premium Indication Disclaimer: The premium indicated is an estimate provided by the market. The actual premium and acceptance of the coverage requested will be determined by the market after a thorough review of the completed application. Terrorism Act Proposal Disclaimer: If this proposal contains options to purchase TRIA/TRIPRA coverage, the proposed TRIA/TRIPRA program may not cover all terrorism losses. While the amendments to TRIA eliminated the distinction between foreign and domestic acts of terrorism, a number of lines of coverage excluded under the amendments passed in 2005 remain excluded including commercial automobile, burglary and theft insurance; surety insurance, farm owners multiple perils and professional liability (although directors and officers liability is specifically included). If such excluded coverages are required, we recommend that you consider purchasing a separate terrorism policy. Please note that a separate terrorism policy for these excluded coverages may be necessary to satisfy loan covenants or other contractual obligations. TRIPRA includes a $100 billion cap on insurers' aggregate liability. The TRIPRA program increases the amount needed in total losses by $20 million each calendar year before the TRIPRA program responds from the 2015 trigger of $100 million to $200 million by the year 2020. TRIPRA is set to expire on December 31, 2020. There is no certainty of extension, thus the coverage provided by your insurers may or may not extend beyond December 31, 2020. In the event you have loan covenants or other contractual obligations requiring that TRIA/TRIPRA be maintained throughout the duration of your policy period, we recommend that a separate "Stand Alone" terrorism policy be purchased to satisfy those obligations. Premium Finance Disclaimer: Premiums for the above policies are due and payable as billed, in full or as insurance company installments. Premiums may be financed, subject to acceptance by an approved finance company. Note: Following acceptance, Poudre Fire Authority Page | 18 Arthur J. Gallagher Risk Management Services, Inc. completion (and signature) of a premium finance agreement with the specified down payment is required Compensation Disclosure: One of the core values highlighted in The Gallagher Way states, “We are an Open Society,” and our open society extends to the compensation Gallagher receives. For more information on Gallagher’s compensation arrangements, please visit http://www.ajg.com/compdisclosure. In general, Gallagher may be compensated as follows: 1. Gallagher Companies are primarily compensated from the usual and customary commissions or fees received from the brokerage and servicing of insurance policies, annuity contracts, guarantee contracts and surety bonds (collectively “insurance coverages”) handled for a client’s account, which may vary from company to company and insurance coverage to insurance coverage. As permitted by law, Gallagher companies occasionally receive both commissions and fees. 2. In placing, renewing, consulting on or servicing your insurance coverages, Gallagher Companies may participate in contingent and supplemental commission arrangements with intermediaries and insurance companies. Contingent commissions 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 and/or through the intermediary, not on an individual policy basis. Some insurance markets, including Gallagher-owned intermediaries, have modified their commission schedule with Gallagher, resulting in an increase in some commission rates. These additional commissions, commonly referred to as “supplemental commissions” are known as of the effective date, but some insurance companies are paying this commission later and apart from when commission is normally paid at policy issuance. As a result, Gallagher may be considered to have an incentive to place your insurance coverages with a particular insurance company. Note: Upon request, your Gallagher representative can provide more specific market information regarding contingent and supplemental commission related to your insurance coverage.3. 3. Gallagher Companies may also receive investment income on fiduciary funds temporarily held by them, such as premiums or return premiums. 4. Gallagher Companies may access other facilities, including wholesalers, reinsurance intermediaries, captive managers, underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the insurance marketplace. Gallagher Companies may own some of these facilities, in whole or in part. If such a facility was utilized in the placement of a client’s account, the facility may have earned and retained customary brokerage commission or fees for its work. 5. Gallagher assists its customers in procuring premium finance quotes and unless prohibited by law may earn compensation for this value added service. 6. From time to time, Gallagher may participate in insurance company promotional events or training and development that insurers provide for Gallagher employees 7. Gallagher strives to find appropriate coverage at a competitive price for our customers. In order to achieve these goals, we gather and analyze data about our customers and their insurance coverage. This data and the resulting analytical tools help us better understand the current marketplace, more accurately predict future trends and offer tailored solutions to our customers. The data may also be provided to insurers pursuant to consulting service agreements from which we earn fees. If you have specific questions about the compensation received by Gallagher and its affiliates in relation to your insurance placements, please contact your Gallagher representative for more details. In the event you wish to register a formal complaint regarding compensation Gallagher receives from insurers or third parties, please send an email to Compensation_Complaints@ajg.com or send a letter to: Poudre Fire Authority Page | 19 Arthur J. Gallagher Risk Management Services, Inc. Compliance Officer Arthur J. Gallagher & Co. Two Pierce Place, 20th Floor Itasca, IL 60143 Actuarial Loss Disclaimer: Arthur J. Gallagher & Co., Los Angeles does not provide actuarial services or actuarial estimates of rate levels or rate methodology. In the event that Arthur J. Gallagher & Co., Los Angeles provides suggestions regarding the establishment of rates or premiums, that advice is based solely on various insurance industry standards and does not constitute an actuarial evaluation or estimate. It is the recommendation of Arthur J. Gallagher & Co., Los Angeles that you contract with an appropriately certified actuary to provide recommendations for rates and overall rating methodology. Short-Rate Penalty Disclosures: The proposal of insurance features policies which contain cancellation provisions to refund premium other than on a pro-rate basis for such occurrences including but not limited to non-payment of premium (short rate penalty provisions). At your request we can detail the terms of such cancellation provisions. This proposal of insurance features insurance policies which contain cancellation provisions and/or cancellation penalties/fees which refund premium other than on a pro-rata basis. The insurance carrier’s assessment of such cancellation fees are detailed in this proposal for any line of coverage where the proposed insurer is applying such fees. Poudre Fire Authority Page | 20 Arthur J. Gallagher & Co Insurance Brokers of California, Inc. CA Corp License# 0726293 Bindable Quotations and Compensation Disclosure Schedule Some carriers pay Gallagher supplemental or contingent commissions in addition to the policy commission. Contingent commissions are typically contingent upon performance factors such as growth, profit, volume or retention, while supplemental commissions are not. These supplemental or contingent commissions may range from less than 1% up to 10% of the policy premium. Please refer to the Compensation Disclosure or contact your Gallagher representative for additional information 1. If the premium is shown as an indication: The premium indicated is an estimate provided by the market. The actual premium and acceptance of the coverage requested will be determined by the market after a thorough review of the completed application. 2. The commission rate is a percentage of annual premium excluding taxes & fees. 3. We were able to obtain more advantageous terms and conditions for you through an intermediary/ wholesaler 4. * The non-Gallagher intermediary/wholesaler did not provide their compensation information for this proposal. The usual and customary compensation to a wholesaler/ intermediary ranges from 5% to 12%, but we cannot verify that range is applicable in connection with this proposal. Carrier Name Quote Valid Until Coverage Total Gross Premium 1 Total Gross Premium (Including Terrorism) Total Gross Premium (Including Earthquake and Flood) Total AJG Commission 2 Wholesaler, MGA or Intermediary Name 3 Wholesaler, MGA or Intermediary % or Fee 4 Wholesaler, MGA or Intermediary AJG-Owned? Yes or No Harleysville Insurance Co. 9/26/15 Builders Risk $4,589 Included Included 20.0% N/A N/A N/A Poudre Fire Authority Page | 21 Arthur J. Gallagher & Co Insurance Brokers of California, Inc. CA Corp License# 0726293 Proposal Acceptance Proposed Option(s) Yes No Harleysville Insurance Company as proposed above The above coverage(s) may not necessarily represent the entirety of available insurance products. If you are interested in pursuing additional coverages other than those addressed in the coverage considerations included in this proposal, please list below: Coverage Considerations Yes No Please provide more information on the following coverage considerations: Policy Delivery Yes We will be sending electronic policies. Should you require hard copies, please select “Yes” This proposal is an outline of the coverages proposed by the respective insurers based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations, or conditions of the actual contract language. The policies themselves must be read for those details. Policy forms for your reference will be made available upon request. We confirm the values, schedules, and other data contained in the proposal are from our records and acknowledge it is our responsibility to see that they are maintained accurately. We agree that your liability to us arising from your negligent acts or omissions, whether related to the insurance or surety placed pursuant to these binding instructions or not, shall not exceed $20 million, in the aggregate. Further, without limiting the foregoing, we agree that in the event you breach your obligations, you shall only be liable for actual damages we incur and that you shall not be liable for any indirect, consequential or punitive damages. I have reviewed and accept the policies and disclosures as outlined in this proposal with the changes or choices shown above. Signature Date Title Gallagher Real Estate & Hospitality Services 505 North Brand Blvd | Suite 600 | Glendale, California | P 818.539.2300 Denial of Service Coverage Coverage not included above. Direct Loss to Site Materials / Content by Direct Damage, Virus or Hackers Coverage not included above.