HomeMy WebLinkAbout1992-114ALL002AB
ORDINANCE NO.
ON ORDINANCE ACCEPTING THE PROPOSAL OF NATIONAL UNION FIRE
INSURANCE COMPANY FOR PUBLIC OFFICIAL LIABILITY INSURANCE COVERAGE;
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND DECLARING AN
EFFECTIVE DATE.
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the proposal of National Union Fire Insurance
Company for public official liability insurance coverage for the
City of Denton, a copy of which is attached hereto and incorporated
by reference herein, is hereby accepted.
SECTION II. That the City Council hereby authorizes the
expenditure of funds in the manner and amount as specified in the
agreement.
SECTION III. That this ordinance
immediately upon its passage and approval
shall become effective
PASSED AND APPROVED this the day of
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APP )ED AS TO LEGAL FORM:
DEBRA A. DRAYOVITCH, CITY ATTORNEY
P&1111 .�
CITY of DENTOMV, TEXAS MUNICIPAL BUILDING / 215 E. McKINNEY / DENTON, TEXAS 76201
TO: Mayor and Members of the City Council
FROM:
Lloyd
V.
Harrell, City Manager
DATE:
June
25,
1992
SUBJECT: PURCHASE OF PUBLIC OFFICIAL'S LIABILITY INSURANCE
Recommendation: That the City Manager be authorized to award an
insurance contract to National Union Fire Insurance Company for
Public Official Liability Insurance.
Summary: Quotes received from the bidding process are outlined on
the attached paper. National Union Fire was not only the low
bidder but also offered the lowest deductible at $25,000 for a
$1,000,000 limit policy. All policies provide approximately the
same basic coverage with the exception of National Casualty whose
policy covers electric Utilities thus accounting for their higher
premium. National Union Fire has the highest A.M. Best rating (A+
15). A sample policy is also attached for your review.
Background: Toe potential for the City of Denton to sustain an
unacceptable large loss is likely to increase over the next few
years and could present a danger to our Risk Retention Fund.
Lawsuits under the Americans with Disabilities Act and other civil
lawsuits will likely be filed as civil rights cases in Federal
Court thereby stripping the City of State tort protection. Public
Official Liability insurance will serve as protection from
depletion of our Risk Retention Fund from such lawsuits.
Fiscal Impact: Premiums will be paid from the Risk Retention Fund.
Respectfully Submitted:
Lloyd V. Harrell
City Manager
8171566-8200 D/FW METRO 434-2529
Prepared by:
Max Blackburn
Risk Manager
Approved:
John F. McGrane
Executive Director of Finance
MB:lb
AFF002E2
N
Law Enforcement and Public Officials
Liability Insurance
1992 Bids
National International National Unic
uasuarcy
ins. a;v.
r ire
Law Enforcement
" Best Rating
Am Best Rating
AM Best Rating
Liability
A -VI
A-SIV
A+%o-
10000,000
50,000
*$103,273
Declined to
Declined to
210D0,000'
50,000
139,383
Bid
Bid
1,000,000
1001000;
88,819
2,000,00011
100r000',
119,872
Public Officals
Liability
1,000,000
50,000
$62,023
$37,816
1,000,000
1001000
56,100
11000,0001,
25,000
$32,240
20000,000
25,000'
46,425
2,0000000'
50,000:
$53,231
3,000,000s
50,000
63,153
4,000,000'
50,000'r
71,850
5,000,000'
0:1000,
79,414
Elec Utilities
N/A
Yes
No
No
Airport
N/A
Yes
Yes
No
Prior =Acts,
NJA
No
No
No
Pollution
NJA
No
No
No
Punitive Dmge
'N/A
BY ENDORSEMENT
No
BY ENDORSEMENT
Cancellation
Yes - 50%
Yes - 20%
Yes - 25%
* NOTE: Bids are contingent upon hiring two (2) additional jailers and
securing shotguns in all police vehicles.
NATIONAL- UNION
FiRE INSURANCE COMPANY
OF P1' 7SBURGH, PA.
A CMRAL STOCK COWAW
TOPINE=�Na OMOMA Y' 10270
PUBLIC OFFICIALS AND EMPLOYEES L1ABIL mow lty)
CE
(Thb lres-
is a clamede Pak"' PleaeB lication,
de to the insurer
In consideration of the premiums and In reliance upon the statements ma'^ the app
Pittsburgh, Pa. herein celled the "Company'' agrees as follows:
the Declarations DPagge with Policy Form 29295 constitute the Contract and the National Union 1=rce insurance
Company o
INSURING AGREEMENTS
1. coverages A, B and C { obligated
The Company will pay on behalf Of the Insuet them because of a Wrongful Act, provided that the claim
A reds all Loss which the Insureds shall be legally
to Pay for err
civil claim or claims first made agai nduring the Policy
18 first made during the policy Perlaf and written notice of said claim is received by the Company y
Pe� will reimburse the Public Entity for all Loss for which the Public Entity shall be required
B. The Company civil claim or claims first made against them because of a Wrongful Act,
the Insureds for any policy period and written notice Of said claim is received by the
bylaw to indemnity the PO'cy pe
provided that the claim is first made during shallIty be legally
company du the policy period- Entity all Loss which the Publi Act, pry that the
Ent
0. The company will pay on behalf of the Public against {t because of a Wrongfulduring the
for any evil claim or claims first made ago received by the company
obligated t0 pay 1 notice of said claim is
claim is first made during the policy period and written
Policy peri0d•
II. De*06006 1 Governmental Body, Wartment, or Unit, which Is
A. "Public Entity"
shah mean only that
soMed Munic�� inoeption date of this Policy
named in the Declarations and is legally con
S. "insured" shall meare
1, the Public Entity; led officials and members
2. all persona who were, now are or shall be lawfully elected or lawfully appoin
of the Public Entity; operating by under the jurisdiction of such Public
boards Or other units opet ng budget der t fed in the application form,
3. members of commissions, of the indicated boards commissions or
Entity and within an apportionment, the total opera tads, utilities, hoes.
provided that the Insurance afforded shall not extend to airy hospitals'
units unless Spec, endorsed hereon: schools, airports. transit authorities,
Ing authorities or law enforcement agencies; boards
or other units as
a. employees as may be ,responsibleprovided to the Public Entity Or to Its commissions. extend
boa n working
set forth In " 3" above, provided that the insurance afforded shall riot extend to any Pe or bank"
on a retainer or contractual agreement; ten insolvency
5, the estate or legal representative of insureds In the case of death, incompe cY,
ruptcy or such Insured.
C, "Wrongful AcV shall mean any actual or alivged error or misstatement or misleading statement or act
or omission or neglect or breach of duty including misfeasance, malfeasance and nonfeasance by an insured, as
a public official or employee of the public entity.
D. "Loss" shall mean the amount which the
are legally obligated to pay or which the Public Entity
shall be required by law to pay as indemnity to the Insureds, for any claim or claims made against them for Wrongful
Acts and shall Include damages, judgments, settlements, costs and expense of investigation and defense Of legal
actions (excluding mtalfrom body), h wets and Claims or suits s as andappealsthe l Entityarlies of officials or employees of " Public
therefrom, cost of attetohment. appeal Or similar bonds;
other gove
provided always, however, such subject of Loss shall not include fines or penalties imposed by law, or matters
which may, be deemed uninsurable under the law pursuant to which this Policy shall be construed.
E. ,policy Period" shall mean the period of one year following the effectve date and hour of this Policy
or R the time between the effective date and the termination of the policy is less than one year, such lesser period.
ill. Fmofuslons
The Company shall not be liable to make any payment of Loss in connection with any claim:
remuneration to
h the Insureds were not
A. entitled;
the however,
tof any the Insureds shall be advantage,protected ctuin rnder the terms of thisi0poi policy unless a judgment o�ally
nal
adjudication establishes such lack of legal entitlement;
S. brought about or contributed to by the dishonesty of the Insureds, however, notwithstanding the foregoing,
the Insureds shall be protected under the terns of this policy as to any claims upon which suit is brought
against them by reason of any alleged dishonesty on the pan of the Insureds, unless a judgment or other
final adjudication thereof adverse to the Insureds shall establish that acts of active and deliberate dishones-
ty committed by the Insureds with actual dishonest purpose and Intent were material to the cause of action
so adjudicated;
C. seeking relief, or redress, in any forth other than money damages;
D. for bodily injury, sickness, disease, death, mental anguish or for claims arising therefrom;
E. for loss, damage to or destruction of any tangible property or the loss of use thereof by reason of the
foregoing;
F. for injury arising from:
1. false arrest, assault or battery, detention, imprisonment, malicious prosecution or abuse of process;
2. disparagement, defamation Including but not limited to libel, slander or vioiation of an Individual's right
of privacy.
3. wrongful entry or eviotion or other invasion of the right of private occupancy;
G. arising from a publication or utterance in the course of or related to advertising, broadcasting or telecasting
activities conducted by or on behalf of the Public Entity;
H, arising from Inverse condemnation and/or adverse possession;
I. arising from strikes, riots or civil commotfons;
J. arising from the willful violation of any statute, ordinance or regulation committed by or with the knowledge
or consent of any Insured;
K. arising from the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land,
the atmosphere or any watercourse or body of water;
L. arising from the insured's activlws in a fiduciary capacity;
M. arising from activities of any attorney -at -law, medical personnel, architect, engineer or accountant, in the
scope of his professional duties; however, notwithstanding the foregoing, the Insureds shall be protected
under the terms of this policy as to any claims made against them as Public Officials or Employees of the
Public Entity;
2-
N. for any wrongful act occurring prkx to the Inception date set forth in Item 2 of the Ueetaranons, n a, to
inception date an Insured knew Or might reasonably expect that such wrongful act would give rise to a
claim;
O, arising out of breach of contract:
P. arising out of the activities of any law enforcement agency or personnel.
iv. Nuclear Energy Liability Exclusion
It is agreed that the policy does not apply:
1. Under any Liability Coverage, to injury, sickness, disease, death or destruction.
(a) with respect to which an Insured under the policy is also an Insured under a nuclear energy liability
policy Issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Under-
writers or Nuclear Insurance Association of Canada, or would be an Insured under any such policy
but for its termination upon exhaustion of its limit of liability, or
(b) resulting from the hazardous properties of nuclear material and with respect to which (1) any person
or organization Is required to maintain financial protection pursuant to the Atomic Energy Act of 1954,
or any law amendatory thereof, or (2) the Insured is, or had this policy not been issued would be, entitled
to indemnity from the United States of Amarica, or any agency thereof, under any agreement entered
into by the United States of America, or any agency thereof, with any person or organization.
2. Under any Medical Payments Coverage, or under any Supplementary Pa is provision relating to
Immediate medical or surgical relief, to expenses incurred with respect to bodily Injury, sickness, disease or death
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility
by any person or organization.
3. Under any Liability Coverage, to Injury, sickness, disease, death or destruction resulting from the hazard-
ous properties of nuclear material, if:
(a) the nuclear material (1) Is at any nuclear facility owned by or operated by or on behalf of, an Insured
or (2) has been discharged or dispersed therefrom;
(b) the nuclear material is contained In spent fuel or waste at any time possessed, handled, used, proc-
owed, stored, transported or disposed of by or on behalf of an Insured; or
(c) the injury, sickness, disease, death or destruction arises out of the furnishing by an insured of services,
materials, parts or equipment in connection with the planning, construction, maintenance, operation
or use of any nuclear facility, but if such facility is located within the United States of America, its
territories or possessions or Canada, this exclusion (c) applies only to injury to or destruction of property
at such nuclear facility.
4. As used In this section
"hazardous properties" includes radioactive, toxic or explosive properties; .
"nuclear material" means source material, special nuclear material or byproduct material;
"source materiai", "special nuclear material", and "byproduct material" have the meanings given them
In the Atomic Energy Act of 1054 or in any law amendatory thereof;
"spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed
to radiation in a nuclear reactor;
"waste" means any waste material (1) containing byproduct material and (2) resulting from the operation
by any person or organization of any nuclear facility included within the definition of nuclear facility under
paragraph (a) or (b) thereof;
"nuclear facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating the isotopes or uranium or plutoni-
um, (2) processing or utilizing spent fuel, or (3) handling, processing or packaging waste.
(c) any equipment or device used for the Proofing. fabricating or alloying of special nuclear
material if at any time the total amount of such material in the custody of the Insured at the
premises where such equipment or device IS located consists of or contains more than 25 grams
of plutonium or uranium 233 or any combination thereof, Or more than 250 grams of uranium
235,
(d) any structure, basin, excavation, premises Or Place prepared or used for the storage or disposal
of waste,
and includes the site on which any of the foregoing is located, all operations conducted on such site and all
premises used for such operations;
"nuclear reactor" means any apparatus designed or used to sustain nuciear fission in a self-supporting chain
reaction or to oontaln a critical mass of fissionable material'.
With respect to Injury to or destruction of property the word "injury" or "destruction" includes all forms Of
radioactive contamination of properly.
FURTHER TO THE ABOVE, the Company shall not be liable to make any payment for loss arising out of
any radioactivity of anything whatsoever or arry nuclear reaction or exptcsion, no matter where it occurs or where
the results of it take effect.
V. Limit of Liability .
A. This policy is only to pay the excess over the deductible amount as set forth In Item 4 of the Declarations
in respect of each and every Loss (as herein defined) hereunder. The deductible amount is to be bome by the
Insureds and is not to be insured. Loss arising out of the same Wrongful Act or series of continuous, repeated
or interrelated Wrongful Acts giving rise to a claim or claims shall be construed as a single Loss and only one
deductible amount shall apply thereto.
B. The total liability of the Company for any Loss or Losses during the Policy Period (and including the
Discovery Period, if applicable), shall not exceed the Limit of Liability stated in Item 3 of the Declarations. The
inclusion herein of more then one Insured shall not serve to increase the Company's Limit of Liability.
VI. Defense Provisions
A. The Insureds shall not admit liability for or settle any claim or incur any costs and expenses of investigation
and/or defense in connection with any claim without the Company's prior written consent (which consent shall
not be unreasonably withheld).
B. The Company shall have the right but not the duty to assume, In" name of the Insureds, the Investiga-
tion and/or defense of any claim and in the event of the exercise of this right the Insureds shall provide the Company
with their full cooperation
C. If the Company recommends settlement of any claim and the insureds refuse, than subject to Section
V, Limit of Liability, the Company's liability for Loss shall not exceed the amount of the settlement recommended
by the Company and the costs and expense of investigation and/or defense as of the time of the Insured's refusal
and the Insured shall thereafter negotiate, investigate and/or defend such claim or suit independently of the
Company.
VII. Loss Provisions
A. The Company shalt, during the pendency of any claim or suit made, periodically reimburse the Insureds
for that portion of Loss consisting of costs and expense of investigation and defense of suits provided that in those
Instances In which a final adjudication establishes the application of Exclusions A and/or B the insureds shall, on
demand by the Company, return to the Company any such amounts.
B. The time when a Loss shall be Incurred within the meaning of this Policy shall be the date on which the
sureds shall give written notice to the Company as hereinafter provided.
C. The Insureds shall, as a condition precedent to the Insureds' rights under this Policy, give notice as soon
trecticable to the Company of any claims made against the Insureds.
0. If during the Policy Period, or during the Discovery Period (if the right is exercised by the Insureds in
lance with Section Vill, Discovery Period), the Insureds shall:
4
(1) receive written or oral notice from any third party that it is the intention of such third party to 110l0 the
insureds responsible for the results of any Wrongful Act: or
(2) beoome aware of any occurrence which may subsequently give rise to a claim being made against
the Insureds as respects any Wrongful Act;
and provided that in either case the Insureds give written notice to the Company during the Policy Period or during
the Discovery Period, H applicable, of Such written or ore] notice under (1) above or such occurrence under (2)
above, any claim which is Subsequently made against the Insureds arising out of such Wrongful Act shall, for the
purposes of this Policy, be treated as a claim during the Policy Period-,
E. The insureds shall give the Company such information and cooperation as it may reasonably require and
as shall be in the Insureds' power.
Vill. Discovery Period
if the Company or the Insured cancels or non•ranews this Policy, the Insureds shall have the right, upon
payment of the additional premium of 25% of the total Policy premium hereunder, to an extension of the cover
granted by this Policy in respect of any claim or claims First made against the Insureds and reported to the Company
during the period of 12 months after the effective date of such cancellation or refusal to renew but only in respect
of any Wrongful Act Committed before the effective date of such cancellation or refusal to renew and otherwise
covered by this Policy.
This right shall terminate, however, unless written notice of such election together with the additional premium
due is received by the Company not later than 30 days after the effective date of cancellation or refusal to renew.
This clause and the rights contained herein shall not apply to any cancellation resulting from non-payment
of premium.
IX. Canoettation Clause
This Policy may be cancelled by the Insureds by surrender of this Policy or by giving written notice to the
Company stating when thereafter such cancellation shall be effective. This Policy may also be cancelled by the
Company by delivering to the Insureds or by mailing to the insureds by registered, certified or other first class mail,
at the Insureds' address shown in Item I of the Declarations, written notice stating when, not less than thirty (30)
days s the policy
Insureds have Mailed to payla premium lation llwhen dube e this Policy may be cancelled by the tive, However, if the Company (Company by because
mailing written
notica of cancellation to the Insured at the address shown in this Policy, stating when, not less than ton (10) days
thereafter, such cancellation shall be effective. The mailing of such notice as aforesaid shall be sufficient proof
of notice and this Policy shall terminate at the time of surrender or the date and hour specified in such notice,
which shall become the end of the Policy Period.
If this Policy shall be cancelled by the Insureds, the Company shall retain the customary short rate proportion
of the premium hereon. If this Policy shall be cancelled by the Company, the Company shall retain the pro rate
Proportion of the premium hereon. Payment or tender of any premium by the Company shall not be a condition
precedent to the effectiveness of cancellation, but such payment shall be made as soon as practicable.
If the period of limitation relating to the giving of notice is prohibited or made void by any law controlling the
construction thereof, such period shall be deemed to be amended so as to be equal to the minimum period of
limitation permitted by such law,
X. Authorisation and Notice
By acceptance of this Policy, all Insureds agree that the Public Entity shall act on behalf of all Insureds with
respect to the giving and receiving of notice of claim or cancellation, the payment of premiums and the receiving
of any return premiums that may become due under this policy, and accepting any endorsement issued to become
a part of this policy. Notice sent to the Public Entity at the address shown in the Declarations shall constitute notice
to all Insureds.
XI. Generai Conditions
A. Territory
This Policy only applies to claims or suits brought against the Insureds in the United States of America.
its territories or possessions, or Canada.
B. Notice of Claims
All notices of claims, applications, demands or requests provided for in this Policy shall be In writing and
addressed to the Company's Administrative Offices, 70 Pine Street, New York, New York 10270.
C. Action Against Company
No action shall IN against the Company unless, as a condition precedent thereto, the Insureds shall have
fully complied with all the terms of this Policy, nor until the amount of the Insureds' obligation to pay shall have
been finally determined either by judgment against the Insureds after actual trial or by written agreement
between the Insureds and the claimant, which agreement has been approved by the Company in accordance
with Section VI, Defense Provisions.
Any person or organization or the legal representative thereof who has secured such judgment or written
agreement shall thereafter be entitled to recover under this Policy to the extent of the Insurance afforded by
this Policy. No person or organization shall have any right under this Policy to join the Comparry as a party
to any action against the Insureds to determine the Insureds' liability, nor shall the Company be Impleaded
by the Insureds or their legal representatives. Bankruptcy or Insolvency of the Insureds or of the Insureds' estate
shall not relieve the Company of any of Its obligations hereunder.
D. Mergers and AcquWons
If, during the term of this Policy, an Insured named in Item I of the Declarations shall be merged, consolidated
or otherwise combined, Immediate written notice must be given to the Company. Coverage hereunder shall
not apply to any Wrongful Acts committed subsequent to the date of merger, consolidation or other combination
unless the Company gives Its consent In writing by endorsement to this Policy.
E. Subrogation Clause
In the event of any payment under this Policy, the Company shall be subrogated to all the Insureds' rights
of recovery therefore against any person or organization, and the Insureds shall execute and deliver all instru-
ments and papers and do whatever else is necessary to secure such rights for the Company. The Insureds
shall do nothing to prejudice such rights. Any amount recovered in excess of the Company's total payment
shall be restored to the Insureds, less the cost to the Company of recovery.
F. Other Insurance
Such Insurance as is provided under this Policy shall be excess over any other valid and collectible Insurance.
G. Assignment
This Policy shall be void If assigned or transferred without the written consent of the Company.
H. Conformity Clause
Terms of this Policy which are In oonf lot with the statutes of those states wherein certain provisions and
coverage included under this policy are not permitted are hereby amended to cover only those provisions and
coverages as apply and npform to such statutes.
I• Changes
Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver
or a Change In any part of this Policy or estop the Company from asserting any right under the terms of this
policy, nor shall the terms of this Policy be waived or changed, except by endorsement issued to form a part
of this Policy.
In witness whereof, the Company has caused this Policy to be signed by its President and Secretary and
countersigned on the Declarations Page by a duly authorized agent of the Company.
e4c�, .. .
31 0,y M0ti0�+t
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03/04/92 14:34
124043994142
NATIONAL UNION
0003 ''"
This a orsement, effective
oil lumber
:ssu4dto
by
L 111101. ; '
fortes a part of
In consideration of the premium charged, It Is hereby understood and agreed that Item a (3),
Section It, Definitions, of the Policy Insuring Agreements, is amended to read as follows:
SECTION II DEFINITIONS
ITEM B 3.
members Of commissions, boards of other units operating by and
under the jurisdiction of such Public Entity and within an
apportionment of the total operating budget indicated In the
application form, provided that the Insurance afforded shall not
extend to any of the following boards, commissions or units unless
specifically endorsed hereon: schools, airports, transit authorities,
hospitals, utilities (except for the water and waste water utilitieE),
housing authorities or law enforcement agencies;
0
J
AUTHORIZED REPRESENTATIVE
SAMPLE PRINT OF FORM : POL13
OS/04/92 14:34 '04043994142 NATIONAL UNION
Q 002
Thin endorsement, effective
Sol `, number
issued to
by
OA
MUD �
forms a part of
In consideration of the premium charged, it Is hereby understood and @greed that Section III of the
policy entitled Exclusions is amended to include the following:
The Company shall not be liable to make any payment of loss in connection with any claim:
q) arising out of any awards of back salary;
r) arising out of the operation of or activities of any schools, airports, transit authorities, hospitals,
utilities (except for the water and waste water utilities), housing authorities, law enforcement
agencies end/or security agencies unless specifically endorsed hereon,
s) to any cross claims or counter claims brought by one Insured under this policy against another
Insured;
In addition Exclusion L is amended to road as follows:
L) arising from the Insured's activities in a fudiclary capacity as respects to any employee benefit plan.
It further understood and agreed that the combined Limit of Liability that the Insurer shall be
Hems for on any claim Involving this or any other valid or collectible National Union Fire Insurance
Company of Pittsburgh, Pa. policy shall be limited to the Limit of Liability stated in Item 3 of the
Declarations Pogo.
All other terms, conditions and exclusions shall remain the some
C: