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Agenda 10/14/2008 Item #16E 1,genda Item No. 10E1 October 14, 2003 Page 1 of 7 EXECUTIVE SUMMARY Recommendation to approve an amendment to the agreement with Johns Eastern Company for property and casualty claims adjusting services in the amount of $77,000. OBJECTIVE: To gain approval of an amendment to the agreement with Johns Eastern Company to provide claims adjusting services to the county's property and casualty insurance program. CONSIDERATIONS: On September 23, 2008 the Board approved the renewal of the casualty insurance program for FY 2009. The overall program consists of various lines of insurance coverage including Property; Flood; Equipment Breakdown; General Liability; Public Officials Liability; Crime and Employee Dishonesty; Automobile Liability; Automobile Physical Damage; limited Uninsured Motorist; Boiler and Machinery; Aircraft Hull and Liability; Airport Liability; Pollution Liability; Contingent Law Enforcement; Medical Malpractice; Statutory Accidental Death; and Excess Workers' Compensation. As part of this approval, the Board approved the selection of Johns Eastern Company as the adjusting company to provide claims services to the property and casualty insurance program. The county's insurance policy requires that the excess carrier approve the selection of the adjusting company that will service the program due to the fiduciary interests of both the county and the carrier. Johns Eastern has been approved by both the Board and the county's insurance carrier to service the program. An agreement has been drafted for the Chairman's signature and approval of the agreement is sought at this time. The effective date of the agreement is October 1, 2008. FISCAL IMPACT: The agreement has a three year term. The minimum and deposit fees in FY 09 for providing claims adjusting services to the program are $77,000 annually based upon 160 Workers Compensation Claims and 68 claims for all other lines. This is a reduction of 37.26% compared to the FY 08 agreement. If the actual number of claims exceed this amount, the county will be charged a per claim charge pursuant to the contract schedule. Funds are available in Fund 516, Property and Casualty Insurance and Fund 518, Workers' Compensation Insurance for this purpose. GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this item. LEGAL CONSIDERATIONS: The amendment has been reviewed and approved for legal sufficiency by William E. Mountford, ACA. RECOMMENDATION: It is recommended that the Board approve an amendment to the agreement with Johns Eastern Company for property and casualty adjusting services effective October 1, 2008, authorizing the Chairman to execute the agreement. PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management Department Page I of I g Agenda Arn No. 16E Page 2 of 7 COLLIER COUNTY E CA R D �� F C 0 j NTY C C- kh'10 i S 3 IC, NE F, S Item Number: 15E1 Item Summary: Recommendation to appmve an arnendiTOW to Is ageenlent with Johns Eastern Company for proje.r,y and ce--,u"N claims adjusting services in the Wrount of $77,000, Meeting Date: 10140008 10000 AM Prepared By jeArey A. Water, CPCU, ARM Awwwwou"Semcm Approved By Jeffmy A. Walkar.cPOL;, A R FV1 i RisF -, Manpge.rnent Director Risk "'I"aragenlent Tk sk WnLgemnnt Director Doe 'W2008 11: 0 6: 4 7 Arid Ewe Administrative servi::e's Risk Management 0 ,8 11:12 A M., Approved By WiPi3rn Mountf-,)7d t1,ssWQV Ommy Atanwy 0te C=y "t.; ney couoy Amomey 0510 1211 P!%j Approved By Lon GoVen Rice AWMEWAve Krvacs 45mWomtor AWKNAWKe SWVWW Aa-VAnNn BOOM, Abmn, 101:131213 ph-r' Approved B), CIM;3, Doe COMO KawgWV Vole VW? of N4rygnmefA Fuj?m. Approved By La�a clanson ^ mamg"s C. WKWO & Wry.mF Q L !Kgw, "N 227 K04 WA Approved By jaras ? Muid coon 7F"yz.;'- 7an E0.0 of WOW; 7"V4 Knm�vl IT- file://C:\Ai-,eiidaTest\Fxiioi-t\I 14-0ct0bcr%2014-()/,,207()08\ I 6X20(('(-)NWNT%?0AGFND 10/8/7009 Collier County Government FY 09 Casualty Insurance Renewal OuiCh'r 1C) 3 P E F Policy Type FY 08 Premium Projected FY 09 Premium % Cha-nge FY 09 Deductibles Carrier(s) Limits Purchased: ('After Adjustments for FY Statutory Insurance Pollution Liability Limits Purchased: 09 Exposure Changes) $ 104,948 $2,000.000 each loss - 4.75% $100,000 per loss Greenwich All Lines Aggregate $ 863,736 $ 701,950 - 18.730/ $100,000 per person /$200,000 Princeton Limits Purchased: $1,000,000 General $1,000,000 General 0.00 ° / per occurrence for General Excess and Airport Liability $1,000,000 Auto Liability $1,000,000 Auto Liability - 3.04% Liability, Automobile Liability and Surplus Automobile /Mobile $1,000,000 Public $1,000,000 Public Officials - 100.00°' Public Officials Liability; $100,000 Princeton Equipment Damage $ 600,000 Workers $600,000 Workers Comp for Crime; $500,000 for Workers' Limit Purchased $1,000,000 Crime $1,000,000 Crime Comp Excess and Excess Liability $ 220,787 $ 216,128 --2.111/c;$1,000,000 General Liability Princeton Limits Purchased: $1,000,000 General $1,000,000 General $1,000,000 Public Officials Excess and Limits Purchased: Liability Liability Surplus Excess Maritime $4,000,000 Public $4,000,000 Public Officials 33.33%$1,000,000 insurance National Excess Crime (Employee $ 13,840 $ 20,000 44.51 ° / $1,000,000 Hartford Dishonestv) $4,000,000 $4.000.000 Indemnity Limits Purchased: $4,000,000 Employee $4,000,000 Employee - 37.26% Third Party .Adjusting Fee Insurance Adjusting Fee: Dishonesty Dishonesty 5.66% - 5.57% $ 134,000 $ Claims Processed: $1,000.000 Faithful $1,000.000 Faithful (257,644) Excess Workers' Comp: $ 240,635 $ 168,397 - 30.02 % $600,000 Midwest Limits Purchased: Statutory Statutory Employers Reported Payrolls (est): $119,599,996 $119,599,996 Rate per $100 Payroll: 0.2012 0.2419 Equipment Breakdown Limits Purchased: $ 35,421 $50,000,000 occurrence $ 36,252 $50,000,000 occurrence 2.357. $25,000 Hartford Statutory Accidental $ 99 azo ¢ _ e, Steam Boiler Death $3,500,000 Hull Value -- --- _.- r-rarffora Limits Purchased: Statutory Statutory Insurance Pollution Liability Limits Purchased: $ 110,163 $2,000,000 each loss $ 104,948 $2,000.000 each loss - 4.75% $100,000 per loss Greenwich $4,000,000 aggregate $4.000.000 aggre ate Insurance Flood Insurance Limits Purchased: $ 173,747 Actual Cash Value or $ 173,747 Actual Cash Value or 0.00 ° / $500 to $2,000 National Flood Airport Liability Maximum Available Maximum Available - 3.04% None Insurance Program Automobile /Mobile $ 128,259 $ - - 100.00°' $50,000 Princeton Equipment Damage Liability Liability Limit Purchased $1,000,000 $1,000,000 Excess and Maritime Employers $ 16,552 $ 25,000 51.04°/ $10,000 Surplus Underwriters Liability Limits Purchased: $1,000,000 $1,000,000 at Lloyds Excess Maritime $ 15,000 $ 20,000 33.33%$1,000,000 insurance National Employers Liability Aggregate $3,300,000 Aggregate Fund Limits Purchased: $4,000,000 $4.000.000 Indemnity Johns Eastern Claims $ 122,737 $ 77,000 - 37.26% Third Party .Adjusting Fee NA Adjusting Fee: 2,368,000 $ 4,626,650 $ 2,502,000 $ 4,369,006 5.66% - 5.57% $ 134,000 $ Claims Processed: 300 Claims Minimum 160 Workers Comp; 68 Other (257,644) Lines Minimum and Deposit Brokerage Flat Fee (in $ 157,500 $ lieu of commissions) 165,375 5.00 % Pursuant to Contract NA Aircraft Insurance $ 87,512 $ 86,205 - 1.490/, $50,000 Rotors in Motion/ $1,000 Starr Aviation (Helicopter) Rotors Not in Motion i Limits Purchased: $3,500,000 Hull Value $3,500.000 Hull Value $10.000,000 Liability $20,000,000 Liability $500,000 Admitted $500,000 Admitted Liability /Seat; Liability /Seat; $3.000,000 Total $3,000.000 Total Airport Liability $ 24,922 $ 24,165 - 3.04% None Phoenix Limits Purchased: $1,000,000 Premises $2,000.000 Premises Aviation Liability Liability $1.000,000 $2,000.000 Hangarkeeper Contingent Law $ 25,000 $ 25,000 0.00% No re Florida Enforcement Professional Sheriffs Self - Limits Purchased: S3, 100,000 Limit $3,100,000 Limit insurance $3,300,000 Aggregate $3,300,000 Aggregate Fund Total Fixed Costs Expected Losses` $ 2,258,650 $ $ 1,867,006 - 17.34% $ (391,644) Total Expected Costs I 2,368,000 $ 4,626,650 $ 2,502,000 $ 4,369,006 5.66% - 5.57% $ 134,000 $ 'Based upon the 9/30/07 Actuarial Estimate from AMI Risk Consultants. Inc. (257,644) !--% ions EASTERN COMPANY, INC. Claim Adjustef5 dnd Third Pdrty Administrdtors ADDENDUM VI to SERVICE CONTRACT FOR WORKERS' COMPENSATION LIABILITY AND COMMERCIAL PROPERTY CLAIMS HANDLING This is the sixth Addendum to the Agreement entered into between Johns Eastern Company, Inc., hereinafter called the SERVICE AGENT, and COLLIER COUNTY, hereinafter called the EMPLOYER, dated the 1 st day of October 2000. This Addendum affects the remuneration to be paid by the EMPLOYER to the SERVICE AGENT for the handling of claims for the period October 1, 2008 through September 30, 2010. The contract includes both the workers' compensation self - insurance program as well as the liability program. The remuneration to be paid shall be as follows: 5. Compensation for the Service Agent. For performing its services under this .Agreement, the Service Agent shall be entitled to the following compensation: a. Fees for claims handling for the employer for workers' compensation exposures whose dates of loss fall between October 1, 2008 and September 30, 2010 will be an annual minimum and deposit of $39,500.00. This minimum and deposit will be billed on a quarterly basis, with the first payment due upon contract inception. b. This fee contemplates handling 160 workers' compensation exposures. There will be no change for report only exposures. If the number of exposures exceeds 160, then the fees will be $1,195.00 per lost time exposure and $170.00 per medical only exposure. If Employer requires Scrnice Agent to enter report only claims, the fee would be 525.00 per report. If the Employer enters via Service Agent's online system, there is no additional fee. The workers' compensation rates will be a one -time charge over the life of the contract. The above fee covers all claims management) administration and data processing services outlined in this proposal. All years are subject to audit. c. Fees for claims handling for the Employer for exposures other than workers' compensation whose dates of loss fall between October I, 2008 and September 30, 2010 will be an annual minimum and deposit of $37,430.00 to be billed on a quarterly basis with the first payment due upon contract inception. d. The above minimum and deposit contemplates handling 68 automobile Bl, automobile PD, crime, errors & omissions, GL!Bl, GLiPD, Property Building and Property Contents claims. If the number exceeds 68 then fees will be as follows: Auto Collision per exposure 5226.00 Auto Comprehensive per exposure 5226.00 .Auto Bodily Injury per exposure $710.00 Auto Property Damage per exposure 5452.00 Crime per exposure 5579.00 Errors & Omissions per exposure 51,023.00 General LiabilityBt per exposure 5710.00 General Liability/PD per exposure $452.00 Property Building per exposure 5483.00 Property Contents per exposure 5483.00 The above rates will be a one -time charge for the life of the contract. The above fees cover all claims manacemendadministration and data processing services previously outlined in this proposal. All years are subject audit. _+r t d. The Service Agent understands that there are certain liability exposures (i.e. property damage, small property claims, automobile physical damage, etc.) that the Employer prefers to handle in house. The Service Agent's responsibility would be limited to data capture and check issuance. Charges for those exposures would be $60.00 per exposure. The fee would cover entering all pertinent data into the AIM system, and issuing appropriate checks. If the Employer chooses to enter these exposures into Service Agent's system and issue appropriate checks in- house, we would charge an annual administrative fee of $2,500.00, which includes all loss reporting, data transfer to STARS, and technical support. *Data capture in Service Agent's system requires manual payment information entry. f. Allocated expenses are charged to file. Fees for any field investigation will be $95.00 per hour, $0.45 per mile and $2.00 per color photograph. Fees for fieldwork for first party property claims will be billed per the attached Property Rate Schedule. Mileage charges will be incurred only for time and travel occurring within Employer's boundaries. There will be no charge for travel time to or from the Employer. If a catastrophe occurs, there will be numerous exposures under one occurrence. We will limit our office -based claims handling fees for any catastrophe- caused multiple exposure occurrences to 20 exposures. For example, assuming all exposures were either property Building or property Contents, office based adjusting fees for a catastrophe occurrence generating 20 or more exposures would be $9,660.00 for the 200812009 year. All fieldwork would be handled based on the Catastrophe Rate Schedule attached. g. Provider Bill Review /Cost Containment Services will be billed at a rate of $5.95 per bill and 30% of al I savings over and above Fee Schedule reductions. All other terms and conditions of the original contract remain unchanged. IN WITNESS WHEREOF, the Service Agent, Johns Eastern Company, Inc., and the Employer, Collier County, have each, respectively, by an authorized person or agent, hereunder set their hands and seals on the date and year first above written. ATTEST: Dwight E. Brock, Clerk of Courts By: Deputy Clerk Dated: Witness Signature Witness Signature Approved as to form and legal sufficienc Assistant County Attorney f BOARD OF COUNTY COMMISSIONERS COLLIER COUNTY, FLORIDA ME Tom Henning, Chairman JOHNS EASTERN COMPANY, INC. Beverly Adkins, Executive Vice President TypediPrinted Signature COLLIER COUNTY CAT HANDLING Parties involved in the claim process: • Account Manager: Jim Milner • General Adjuster: Johns Eastern Company will appoint one of its General Adjusters to adjust/manage the day -to -day handling of the claim. • GA will be responsible for the day -to -day oversight/adjustment of the claims • GA's work product will be reviewed by Jim Milner • Field Adjuster: The GA will utilize field adjusters to assist in the inspection and documentation phase of the claims. • Experts: GA will engage experts listed below on large exposure losses: o Accountant to manage inflow of loss documentation and to provide excel spreadsheets outlining status of specific aspects of the claim • Building engineers and /or consultants • GA will provide specific guidelines as to tasks assigned to experts in order to monitor expenses and results Phase I — Inspection of Effected Locations & Initial Meetings with Department Representatives: - Prior to CAT event, Account Manager and General Adjuster will review the Service Contract, Coverage Information, and potential loss locations. - Once loss occurs, Account Manager and General Adjuster will discuss preliminary loss information and finalize CAT plan. Plan will be discussed with Collier County. - Field adjusters will be mobilized to photograph and document the extent of damage following the event. Timing of the initial inspections is based on the severity of the event and access granted by local authorities. Every effort will be made to coordinate inspections within the first 48 — 72 hours. - Each field adjuster will prepare a report within 7 -10 days of the inspection to include scope of damages, estimate of loss, photographs and any supporting documentation provided. Reports will be forwarded to the General Adjuster - A meeting will be held with department representatives to review extent of the damages effecting each department and to review Risk Management expectations for documenting the depanrncnts' losses. �gen to iietTi O. ')c 4, ? c, i - Discussions will take place between the Account Manager, GA, Collier County, and excess carrier regarding the need of accountants, building experts, etc. Phase II — Reporting to Carrier(s): - Within 30 days of the CAT event, a captioned report will be sent to the participating carrier(s) to include a narrative of the overall scope of the loss, copies of the field adjuster reports and a comprehensive spreadsheet. Report will be completed by the GA and reviewed by Account Manager. - Subsequent status reports will be sent on 60 -90 day intervals until conclusion with the updated Statement of Loss spreadsheet. Reports will be sent on a more frequent basis if activity warrants. - Subsequent reports will outline items completed since prior report and will itemize items remaining to be resolved. When possible, time frames will be provided to outline expected completion dates for those unresolved items. The attached Statement of Loss (or similar report provided by an accountant) will be provided to Collier County each Friday or as often as requested. The updated Statement of Loss will be provided to Risk Management each Friday or as often -- as requested. This report can be modified to fit the needs of Collier County and/or participating carrier(s). Phase III — Department Follow Up: - Representatives from the effected departments will be contacted at least on a monthly basis to assure they are progressing with securing and forwarding all necessary documentation to support the claim. - GA will stay in constant contact with all parties involved in the claim process (experts, contractors, consultants, etc.) to ensure continued progress is made toward resolving all open claim issues. FEMA Contact: - FEMA's coordinator will be contacted. We will forward a copy of the policy as well as the Statement of Loss, if requested, and any supporting documentation we have been provided.