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HomeMy WebLinkAbout1992-198AN ORDINANCE ACCEPTING THE PROPOSAL OF FRONTIER ADJUSTERS OF DENTON FOR ADMINISTRATION OF GENERAL LIABILITY CLAIMS AGAINST THE CITY OF DENTON; AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT FOR SUCH SERVICES; AND AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the City authorizes Frontier Adjusters of Denton to administer general liability claims against the City of Denton and the City Manager is hereby authorized to execute a contract with Frontier Adjusters, a copy of which is attached hereto. SECTION II. That the City Council authorizes the expenditures of funds in the manner and amount specified in the contract. SECTION III. That this ordinance shall become effective imme- diately upon its passage and approval. , PASSED AND APPROVED this the 4� day of Ay 1992. BOB CASTLEBERRY, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY:���� APP OVED AS TO LEGAL FORM: DEBRA A. DRAYOVITCH, CITY ATTORNEY BY: ALL0038F ADMINISTRATIVE SERVICE AGREEMENT BETWEEN THE CITY OF DENTON AND FRONTIER ADJUSTERS OF DENTON This A strative.Service Agreement (the Agreement) is made as of the day of 1992, by and among: The City of Denton, a Texas home rule city, 215 East McKinney, Denton, Texas 76201, hereafter referred to as Client. Frontier Adjusters of Denton, Texas, 512 W. Hickory, Suite 222, Denton, Texas 76201, who shall be known as Frontier. WHEREAS, Client has elected a self -insured program for its general liability claims and requires claim and computer report services for the administration of this program; and WHEREAS, Frontier is in the business of providing insurance claims investigation, adjustment and computer report services; and WHEREAS, Client desires to retain Frontier to provide insurance claims investigation, adjustment and computer report service. NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties herein contained, the parties hereby agree as follows: I. Term. This Agreement will be effective from November 18, 1992 to November 16, 1993. If Frontier has performed in a manner satisfactory to Client, the City Manager may extend the Agreement by one-year periods for up to four (4) years beginning at the conclusion of the initial contract and by signing an extension letter. II. services to be Provided by Frontier. Frontier shall: 1. Investigate, adjust and administer claims submitted against Client in accordance with its best professional judgment, including; a. Screening accident reports for potential claims and initiating contact with claimants. b. Initiating and maintaining contact with claimants or their attorneys. C. Deciding upon and initiating a proper course of investigation. d. Determining responsibility. e. Seeking contribution or indemnity from responsible third parties. f. Evaluating damages and determining settlement value of claims. g. Preparing written reports to City staff or City Council when recommending settlements in excess of $10,000. h. Performing any and all required inspections and examination of estimates. 2. Produce computer reports in an agreed format for monthly loss detail and summary print-out and semi-annual claims summary report including a report summarizing frequency and severity of losses and loss activity for each defined organizational unit of Client. Frontier shall also provide to the Client a monthly loss detail and summary print-out. 3. Maintain a claim file on each reported claim. The claim files will be the property of Client and may be reviewed or copied at a reasonable time by Client or a designated representative. 4. Determine claim payments, if any, to be paid on the Client's behalf from funds supplied by Client. Frontier shall obtain Client's approval before payment is made. 5. Establish reserves, where appropriate, reflecting Frontier's professional judgment. 6. Make recommendations on allocated loss expenses. 7. Assist Client in appointment of defense counsel where necessary on Client's behalf and cooperate fully with legal counsel appointed by the City 8. Inform Client of claim status, reserve adjustments and settlement recommendations in a format agreed upon with Client. Each estimate and any subsequent change shall be included in the risk management information system. No 9. Report to Client any claim which in Frontier's professional judgment warrants a denial. 10. Frontier shall maintain, at a minimum, one claims office located within 60 miles of the City of Denton. All activity related to the services requested will be coordinated Page 2 through the Texas based claims office. An 800 number will be established for claims offices located outside the City of Denton. 11. Submit to Client all claim files which have been closed for one year to be maintained by Client for statutory retention period. 12. Make available a representative on a twenty-four hour basis for investigation or other action required on general liability claims where a death or serious bodily injury has occurred. 13. Create a file for each claim upon receiving notice of an incident where there is a possibility of a loss or expense payment. All incidents not requiring the creation of an individual file shall be held in "suspense" files. The claim file shall contain all investigation, legal and process- ing records attributable to the claim and each document or piece of correspondence is "date stamped" upon receipt. 14. Make every attempt to contact claimants within forty-eight hours of receipt of notice of loss. Within fourteen (14) days of notice of loss, Frontier will have eval- uated the claim and communicated to Client an initial determination as to the liability, potential costs and reserves for the claim. Frontier shall review reserves quarterly and modify as appropriate. 15. Within the authorization extended, negotiate and settle all claims which warrant such dispositions and make reasonable efforts in accordance with industry standards to dispose of all claims submitted by Client and prepare compro- mises, agreements, and releases for Client. The City requires that the Risk Manager, the City Attorney and the City Manager approve in advance all liability settlements and payments. After the contract is executed, the Risk Manager may, by letter, grant settlement authority of up to $1,000 when a settlement is in the best interest of the City and the City Attorney or the Risk Manager is unavailable for consultation. 16. Provide copies to client of all correspondence written to claimants. 17. Comply with all other terms and conditions in this Agreement. Frontier shall perform the services specified in this agreement in accordance with the requirements of any regulatory authority having jurisdiction. Where required by law or regulation, Frontier will utilize licensed claims adjusters to render contracted service. The services shall be Page 3 performed in accordance with generally accepted professional standards and in accordance with such legal requirements or restrictions as may be imposed by governmental authority. III. Obligations of Client. Client shall: 1. Promptly refer to Frontier all claims which are covered by this Agreement. 2. Establish a claim paying fund. 3. Maintain a Loss Fund for the paying of claims and allocated expenses. If there are not adequate monies in the Loss Fund, Frontier may suspend all payments and all other services under this Agreement until the Client provides adequate funds. Client agrees that Frontier will not be liable for any fines, assessments, fees, judgments or penal- ties resulting from an interruption of services which was caused by Client's failure to pay Frontier's fees, to reim- byrse the Loss Fund or to provide appropriate monies for the Loss Fund. 4. Pay Frontier service fees according to the provi- sions of Exhibit A to this Agreement. 5. Respond promptly to settlement or action requests from Frontier. IV. General Conditions 1. This Agreement is for the sole benefit of the parties. This Agreement shall be interpreted in accordance with the law of the state of Texas. The Agreement may be modified or amended only by a writing signed by both parties 2. If Client fails to make timely payment of monies owing Frontier for services properly performed, i.e. within 30 days of an invoice, Client agrees to payment of interest for late payment at the prevailing rate. In the event Frontier incurs collection expense in obtaining monies owed for services properly performed, Client agrees to reimburse those expenses. V. Termination. 1. The Agreement shall be subject to termination under any of the following conditions: a. Mutual Agreement. Upon mutual written agreement of the contracting parties to terminate specifying the effective date of termination with ninety days notice in writing. Page 4 Frontier shall maintain such minimum coverage during the term of this Agreement. VII. Definitions. 1. Allocated Loss Expense: Allocated Loss Expense in- cludes, but is not limited to the following: subrogation; rehabilitation; automobile or other physical damage appraisal, all court cost, fees, and expenses: fees for service of pro- cess; fees to attorneys; the cost of services of undercover operations and detectives; fees of independent adjusters or attorneys for investigation or adjustment of claims; the cost of employing experts for the purpose of preparing maps, photo- graphs, 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 report- ers or recorded statements. VIII. Confidential Information. Any data or other technical or other information furnished or disclosed hereunder is the property of Client and shall be deemed confidential to Client and shall be returned to Client at the conclusion of this Agreement. If such information is known by the public, Frontier is free of any obligation to keep it confidential. Frontier shall maintain adequate security to prevent unauthorized access to Client's claim files. IX. Non -Discrimination. Frontier shall comply with the provisions of all applicable state and federal laws and regulations applicable to the work and to Frontier as an employer of labor or otherwise. Frontier agrees not to discriminate against any employee or applicant for employment because of race, religion, sex, age, national origin or disability. X. Indemnification. Frontier agrees to indemnify, defend and hold harmless Client with respect to any claims, demands, actions, damages, costs and expenses to which Client may be subjected as a consequence of or as a result of any error, omission, tort, intentional tort, wilful misconduct or any other negligence on the part of Frontier, its employees, agents, and subcontractors, unless the complained of actions of Frontier were taken at the specific request of Client. XI. General Provisions. 1. Agreement and Notices. The provisions of this Agreement constitute the whole and entire agreement between Frontier and Client and may be modified or altered only by mutual agreement, reduced to writing, executed by authorized representatives, and delivered to each other. Whenever no- tices or consents are required to be given under this Agree- ment, such notices or consents shall be reduced to writing, Page 6 executed by authorized representatives, and delivered to the other party at the following address. City of Denton, Denton Texas Attention: Ms. Debra A. Drayovitch 215 E. McKinney Denton, Texas 76201 Frontier Adjusters of Denton Attention: Arthur H. Anthony 512 W. Hickory, Suite 222 Denton, Texas 76201 2. Waiver. The failure of either party at any time to enforce any right or remedy available to it under this con- tract with respect to any breach or failure by the other party shall not be construed to be a waiver of such right or remedy 3. severability. In the event that any one or more of the provisions contained herein shall for any reason be held to be unenforceable in any respect, such unenforceability shall not affect any other provision of this contract, but this Agreement shall then be construed as if such unenforce- able provision or provisions had never been contained herein. 4. captions. The captions in this Agreement are included for convenience only and shall not be construed to define or limit any of the provisions contained herein. 5. Assignment. This Agreement is one for personal ser- vices and may not be delegated or assigned by either party without written consent of the other. All work performed by a subcontractor, if any, shall be deemed work performed by Frontier. 6. Relationship. Frontier shall exercise full control and direction over its subcontractors and employees who per- form the work described in this Agreement. Neither Frontier nor its employees, agents or subcontractors shall be deemed to be employees of Client. It is understood that Frontier is an independent contractor for all purposes and at all times. Frontier is wholly responsible for withholding and payment of all federal, state and payroll taxes with respect to its em- ployees. 7. Excess Insurance. It is understood that as of the date of execution of this Agreement, Client has no excess insurance. However, should Client obtain such coverage, Client agrees to notify Frontier of such coverages in writing and to furnish reporting levels Thereafter, Frontier shall notify Client and any excess insurers applicable to any claim that may potentially fall within the excess carrier's level of coverage and, if requested, provide Client and such excess Page 7 insurers with information on the current status of those claims and potential losses. S. Records. Frontier will establish and maintain for a period of not less than five (5) years, claim files, logs, transaction documents and all other records associated with this contract. These records shall not be disposed of or de- stroyed without prior written authorization from the City. XII. Claims Investigation and Analysis and Payment. Frontier shall provide prompt and thorough claims investigation services. Depending on the seriousness of the accident or situation, investigations are to be initiated within one to five (5) working days after Client has notified Frontier of the situation. For potential claims involving bodily injury, Frontier shall make initial contact with the injured party or his representative within twenty-four (24) hours of notification by Client. Frontier shall make an emergency phone number available during weekends and non- working hours for notification of potential claims involving a fatality. Frontier shall conduct, as necessary, on -site inspec- tions of accident locations, make photographs of accident locations, obtain statements from City employees, claimants, and witnesses and obtain copies of policy and accident reports, etc. XIII. Right To Audit. 1. Client, through its designated representatives, is autho- rized to visit Frontier's processing and/or storage premises and have access to all data, including paper documents, microfilm, microfiche, and magnetically stored data which relate to services rendered to Client. 2. Frontier agrees to allow the Client or its designee full access to all claims data, and other items needed for cost and utilization studies as they pertain to Client. 3. Frontier agrees to assist Client by promptly providing requested data and assisting in sampling surveys. XIV. Care of Data. Frontier shall take all steps necessary to safeguard any data, files, reports, or other information from loss, destruction or erasure. Liability for any costs or expenses of replacing, or damages resulting from the loss of such data shall be borne by Frontier unless at the time of the loss, said data was in the exclusive custody of Client. XV. Conflicts. Nothing in this agreement shall prevent Frontier from representing other clients. However, should Frontier be assigned a claim by Client wherein Frontier has also previously received an assignment from an adverse company, or party also represented by Frontier, Frontier will so inform the City of Denton. Solely at the discretion of the City of Denton, Frontier may continue to handle such claim or the City of Denton may assign Page 8 the same to another third party claims administrator. Frontier shall incur no liability for failing to notify the City of Denton of any claim wherein a conflict may exist. EXECUTED this day of 1AbK&&0&---;992• CITY OF DENTON, TEXAS ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPR VED AS TO LEGAL FORM: DEBRA A. DRAYOVITCH, CITY ATTORNEY BY: FRONTIER ADJUSTERS OF DENTON ALL00394 BY: P ESIDENT/OWNER Page 9 EXHIBIT A FRONTIER SERVICE FEES Expenses Adjuster Fee Secretarial/Clerical Expense Photograph Expense Computer Reports Mileage Cost Copies Cost items $37.50 per hour $15.00 per hour At Cost $50.00 per month maximum .35 per mile .10 per page Page 10