1993-089-Authorizing The Town Manager To Execute An Agreement With Willis Corroon For Third Party Admin Of The Town's Workers Compensation ProgramRESOLUTION 1993 -89
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 21st day of June, 1993 by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Linda Lubeck
Mayor Joanne Benjamin
NAYES: None
ABSENT: Patrick O'Laughlin
ABSTAIN: None
SIGNED:
S GATOS
OR OF THE TOW F LOS GATOS
, CALIFOR A
ATTEST:
CLERK OF THE TOWN OF LOS EIATOS—
LOS GATOS, CALIFORNIA
RISK MANAGEMENT SERVICE AGREEMENT
This Agreement entered into this 1st day of July, 1993 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.
8. Coordinate all litigation and activity with "Client" selected
legal counsel. All referrals will be approved by "Client ".
9. Establish appropriate reserves for each file.
10. Advise the excess carrier of claims which may exceed the
self - insured retention as outlined in coverages provided by the
excess insurance company.
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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.
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, damages and reasonable attorney's fees have
not been directly caused by any misconduct, error or omissions
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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, 1993 and
shall continue through June 30, 1996. 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 Liability: 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 limit per accident for bodily injury and
Property damage.
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C. Workers' Compensation and Em
Compensation limits as requi
of California.
d. Errors and Omissions: One
limit. "Administrator" will
certificates at the inception
clovers Liability: Workers'
red by the laws of the State
Million Dollars ($1,000,000)
provide "Client" insurance
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 ": Ron Scheidt
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:
1. For the period July 1, 1993 through June 30, 1994:
"Client" will deposit the sum of Twelve Thousand Three Hundred
Twenty -Five Dollars ($12,325) 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 Four Hundred Ninety -Three Dollars ($493) against
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"Client's" deposit upon commencement of processing each new
claim. If at any time during this period, the total number of
new claims opened exceeds twenty -five (25), "Administrator"
shall invoice and "Client" shall pay Four Hundred Ninety -Three
Dollars ($493) for each such additional claim up to a maximum
of Twenty -Two Thousand One Hundred Eighty -Five Dollars
($22,185). Any additional new claims opened during this period
shall be serviced without further charge or payment.
"Client" agrees to depositfftthen some of Thirteen Thousand
Twenty -Five Dollars ($131025) with "Administrator" at the
inception of this period for twenty -five (25) new claims or
Five Hundred Twenty -One Dollars ($521) per claim. If at any
time during this period, the total number of new claims opened
exceeds twenty -five (25), "Administrator" shall invoice and
"Client" shall pay Five Hundred Twenty -One Dollars ($521) for
each such additional claim up to a maximum of Twenty -Three
Thousand Four Hundred Dollars ($23,400).
qu "Client" agrees to deposit thevsum gun
ofeThirteen6Thousand Seven
Hundred Twenty -Five Dollars ($13,725) with "Administrator" at
the inception of this period for twenty -five (25) new claims or
Five Hundred Forty -Nine Dollars ($549) per claim. For each
claim in excess of twenty -five (25), "Administrator" shall
invoice and "Client" shall pay Five Hundred Forty -Nine Dollars
($549) for each such additional claim up to a maximum of
Twenty -Four Thousand Seven Hundred Five Dollars ($23,705).
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 Six Hundred Fifty
Dollars ($650) for the period of July 1, 1993 through June 30,
1994: Sever. Hundred Dollars ($ 700)
through June 30, 1995. Seven for the period July
period July 1, 1995 through June Dollars ($700) for the
30, 1996
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.
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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.
SECTION V: Cancellation
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.
Option 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 ".
Option 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
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"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
By:
Title: Town Manager
Date:
Attest: Town Clerk
By:
Marian V. Cosgrove
Approval As to Form: Town Attorney
By:
Katherine Anderton
WILLIS CORROON ADMINISTRATIVE
SERVICES CORPORATION
By:
Title: Senior Vice - President
Date:
Witness
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