1996-123-Execute An Agreement With Willis Corroon For Third Party Administration Of The Town's Workers' Compensation ProgramRESOLUTION 1996 - 123
RESOLUTION OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN
MANAGER TO EXECUTE AN AGREEMENT WITH WILLIS CORROON FOR THIRD
PARTY ADMINISTRATION OF THE TOWN'S WORKERS' COMPENSATION
PROGRAM
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos enter into an agreement with Willis
Corroon for third party administration of Town's Workers' Compensation Program on the terms
and conditions outlined in attached Exhibit A, and that the Town Manager is authorized, and is
hereby directed, to execute said agreement in the name and on behalf of the Town of Los Gatos.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the seventh day of October, 1996 by the following vote:
COUNCIL MEMBERS:
AYES: Joanne Benjamin, Steven Blanton, Linda Lubeck, Payrick O'Laughlin,
Mayor Randy Attaway
NAYES: None
ABSENT: None
ABSTAIN: None
SIGNED:
MAYOR OF TOWN O OS GATOS
LOS GATOS, CALIFORNI
ATTEST:
CLERK OF THE TOWN OF L GATOS
LOS GATOS, CALIFORNIA
RISK MANAGEMENT SERVICE AGREEMENT
This Agreement entered into this 1st day of July, 1996 by and between the TOWN OF LOS
GATOS, hereafter referred to as "Client ", and WILLIS CORROON ADMINISTRATIVE SERVICES
CORPORATION, hereafter referred to as the "Administrator ", for the administration of Workers'
Compensation claims in the State of California and related matters.
SECTION I• The "Administrator"
The "Administrator" shall provide the following services to "Client ":
1. Investigate, adjust and otherwise administer all of the Workers' Compensation claims, subrogation
claims related thereto, vocational rehabilitation claims, and coordinate for disability retirement for
local safety members of Public Employees Retirement Systems (PERS) pertaining to employees
of "Client" during the period of this Agreement.
2. Determine the compensability, if any, the settlement thereof and payment of all claims with funds
provided by "Client ".
3. Prepare and file all claim reports in accordance with established procedures and State guidelines.
4. Maintain a separate claim file on each reported claim.
5. Maintain computerized loss reports disclosing the following pertinent claims data, as well as a
copy of each check issued: .
a. Monthly reports of occurrences by department/division showing program year, date and
time of occurrence, name of claimant, type of occurrence and amounts paid or reserved,
part of body affected, accident type, open/closed status.
b. Cumulative summaries on at least a quarterly basis that summarize each loss and
occurrence statistics to date, as well as indicating part of body, accident type, time of day,
day of week, length of service and age.
6. Prepare the Self- Insured Annual Report.
7. Process "Client's" Internal Revenue Service Form 1099 documents.
S. Coordinate all litigation and activity with "Client" selected legal counsel. All referrals will be
approved by "Client ".
10. Advise the excess carrier of claims which may exceed the self - insured retention as outlined in
coverages provided by the excess insurance company.
11. Keep "Client" informed of major claims with reserves in-excess of Twenty Thousand Dollars
($20,000).
12. Except as respect to those areas of activity expressly delegated to "Administrator ",
"Administrator" shall take no action on behalf of "Client" to settle any claim, to obligate "Client"
to payment of any settlement funds, or to initiate or control any litigation or other formal
administrative proceedings, without prior approval of "Client ". In no event shall "Administrator"
settle any claim on behalf of the Town with respect to any individual claim, in excess of One
Thousand Five Hundred Dollars ($1,500).
13. Maintain an office in Santa Clara County, California with local computer access and local ability
to satisfy benefit payment obligations.
SECTION II• "Client"
"Client" Agrees To:
1. Provide adequate funds from which to pay all claims and allocated expenses, and the timely
replenishment of same. v
2. Provide up -to -date information on all excess insurance.
3. Cooperate fully in the disposition of all claims.
4. Establish a settlement authority limit of One Thousand Five Hundred Dollars ($1,500) per claim.
5. Report on a timely basis all claims, incidents, claim reports and all other claim correspondence.
Any penalty imposed for delay in reporting shall be the responsibility of "Client ".
6. Establish-an Escrow Account to pay all claims and allocated expenses.
7. Promptly pay the "Administrator's" fee.
8. Provide copies of the applicable excess policies.
SECTION III: General Conditions
1. "Client" agrees that it will indemnify and hold harmless "Administrator" and its directors, officers,
employees, parents, subsidiaries and affiliates from and against any and all claims incurred by
Administrator as the direct or indirect result of any misconduct, error or omission of "Client ", or
any of its directors, officers, subsidiaries or affiliates taken in connection with the furtherance or
performance of any provision of this Agreement, provided that said claims, losses, liability costs,
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damages and reasonable attorney's fees have not been directly caused by any misconduct, error or
omissions of Administrator, its directors, officers, employees, subsidiaries and affiliates.
2. "Administrator" agrees that it will indemnify and hold harmless "Client" and its directors, officers,
employees, subsidiaries and affiliates from and against any and all claims, losses, liability costs,
damages and reasonable attorney's fees incurred as the direct or indirect result of any misconduct,
error or omissions of "Administrator" or any of its directors, officers, employees, subsidiaries and
affiliates, provided that said claims, losses, liability costs, damages, and reasonable attorney's fees
have not been directly caused by any misconduct, error or omission of "Client ", its directors,
officers, employees, subsidiaries and affiliates.
3. In providing the services called for under this Agreement, "Administrator" shall comply with all
applicable laws, ordinances, and government regulations including, but not limited to, the
Workers' Compensation laws of the State of California. Such obligations shall include not only an
obligation of "Administrator" to comply with the Worker's Compensation laws of the State of
California with respect to its employees, but also an obligation to administer the Workers'
Compensation claims of "Client" in accordance with said laws.
4. All documents, materials, reports, claims, and other written, photographed or electronic records
provided to "Administrator" by "Client ", or which are produced by "Administrator" in connection
with the duties under this Agreement, shall be maintained as confidential by "Administrator ",
except when disclosure is authorized by "Client" or is necessary to perform the Obligations of
"Administrator" under this Agreement. All such documents and materials shall be owned by
"Client" and, upon expiration or termination of this Agreement, shall be returned to "Client ".
5. The terms of this Agreement shall commence on July 1, 1996 and shall continue through June 30,
1997. Not less than sixty (60) days prior to any adjustment, "Administrator" shall notify "Client"
of any proposed change in fees.
6. "Administrator" shall maintain the following insurance coverages during the term of this
Agreement, and provide certificates to "Client ":
a. General I iabili1y: Includes premises operations, products /completed operations,
contractual and personal injury. Limit One Million Dollars ($1,000,000) combined single
limit.
b. Automobile Liability: One Million Dollars ($1,000,000) combined single Iimit per
accident for bodily injury and property damage.
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C. Workers' Compen ajQ]2 and Employers Liability: Workers' Compensation limits as
required by the laws of the State of California.
d. Errors and Omissions: One Million Dollars ($1,000,000) limit. "Administrator" will
provide "Client" insurance certificates at the inception of this Agreement.
7. "Administrator" shall not assign, transfer, or subcontract, whether by an assignment or novation,
any of its rights, duties, benefits, obligations, liabilities, or responsibilities under this Agreement
without the written consent of "Client ".
8. During the term of this Agreement, "Administrator" agrees not to discriminate against any
employee or applicant for employment because of race, religion, creed, color, national origin,
ancestry, physical or mental handicap, medication condition, sex or marital status.
9. No waiver of any breach of the terms of this Agreement shall constitute a waiver of any other such
breach, nor shall payment of any sums due hereunder constitute a waiver of any breach.
10. In the event an action is brought for enforcement of any of the terms of this Agreement, the
prevailing shall be entitled to an award of reasonable attorney's fees.
11. In the event that correspondence required by this Agreement is directed to any party hereto, it
shall be sent addressed to the following mailing addresses:
"Client ": Mark Linder
Assistant Town Manger
Town of Los Gatos
P.O. Box 949
Los Gatos, California 95031
"Administrator ": RoirScheidt
Willis Corroon Administrative Services Corporation
438 Camino del Rio South, Suite 223
San Diego, California 92108
SECTION IV• Fees
As full compensation for all services provided hereunder by "Administrator ", "Client" agrees to pay the
following sums:
"Client" will deposit the sum of Fourteen Thousand Two Hundred Seventy Five Dollars ($14,275)
with "Administrator" at the inception of this period. This deposit is based on the projection that
twenty-five (25) new claims will be opened during this period. "Administrator" will be entitled to
draw down Five Hundred Seventy One Dollars ($571) against "Client's" deposit upon
commencement of processing each new claim. If at any time during this period, the total number
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of new claims opened exceeus twenty -five (25), "Administrator" shall invoice and "Client" shall
pay Five Hundred Seventy One Dollars ($571) for each such additional claim up to a maximum of
Twenty Five Thousand Six Hundred Ninety Five Dollars ($25,695). Any additional new claims
opened dining this period shall be serviced without further charge or payment.
2. At the end of the term of this Agreement, any sum remaining in "Client's" deposit account shall be
refunded to "Client" or credited toward an extended term at "Client's" election.
3. Should "Client" acquire or assume control of additional services which might increase the number
of claims, "Administrator" reserves the right to adjust the initial projected number of claims or the
maximum number of claims.
4. "Client" agrees to pay "Administrator" for computer generated claims /loss run reports an
additional fee of Seven Hundred Dollars ($700) for the period of July 1, 1996 through June 30,
1997.
5. "Client" agrees to pay "WCASC" for the printing of computer compatible checks or such other
printing specifically requested by "Client" at "Administrator's" cost.
6. In the event this Agreement is terminated prior to its expiration, and the termination becomes
effective on a date other than June 30, then the fee payable for the twelve -month (12) period
during which the termination occurs shall be pro -rated based on the portion of the twelve -month
(12) period between the prior July 1 and the date of the termination.
7. In addition to the above service fee, and subject to "Client's" prior approval, "Client" agrees to pay
all Allocated Loss Expenses as defined below:
Allocated Loss Expenses means any cost or expense "Administrator" incurs on behalf of "Client"
as a result of engaging the service of firms or persons outside "Administrator's" organization for work in
connection with the investigation, adjustment, settlement or defense of a claim. Allocated Loss Expenses
include, but are not limited to, the following: subrogation; rehabilitation; automobile or other physical
damage appraisal; all court costs, fees and expenses; fees for service of process; fees to attorneys; the
costs of services of undercover operations and detectives; fees of independent adjusters or attorneys for
investigation or adjustment of claims in areas removed from reasonable access to "Administrator's"
salaries employees; the costs of employing experts for the purpose of preparing maps, photographs,
diagrams and chemical or physical analysis, or for expert advice or opinion; the cost of obtaining copies
of any public records; and the costs of depositions and court reporters or record statements; the costs of
medical cost containment services, such as utilization review, preadmission authorization, hospital bill
audit, provider bill audit and medical case management.
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SECTION V ancellation
This Agreement may be canceled by either "Client" or "Administrator" by giving to the other in writing
notice of intention to cancel this Agreement sixty (60) days prior to the actual date of cancellation. Upon
cancellation, "Administrator" will not be required to provide any further services to "Client ", except as
otherwise provided in this Section. Either party may also cancel this Agreement without giving the
required sixty (60) day prior notice in the event of a substantial breach of any term of this Agreement.
In the event of termination of this Agreement, "Client" shall designate, in writing, one of the following
options:
Option I: Require "Administrator" to return all open/pending or closed files to "Client" on the
effective date of termination. "Administrator" shall cooperate fully with "Client" to ensure
the orderly transition to a succeeding administrator.
ti II: Require "Administrator" to continue to provide all services as previously outlined in this
Agreement at a fee to be negotiated between "Client" and "Administrator ".
t' III: Require "Administrator" to continue all of the services as previously outlined in this
Agreement, with respect to one or more open/pending files designed by "Client" or to
continue portions of said services designated by "Client" as to all open/pending files of
"Client" or one or more of such files designated by "Client" at a fee to be negotiated
between "Client" and "Administrator ".
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed on
behalf of the undersigned duly authorized persons.
TOWN OF LOS GATOS
Title: Town Manager
Date:
Attest: Town Clerk
By:
Marian V. Cosgrove
Approval As to Form: Town Attorney
Bv:
WILLIS CORROON ADMINISTRATIVE
SERVICES t;ORPO ON
By: _L /
Title: Senior V'ce -P esident
Date: '9 I/ g 74476
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