Insurance Broker Agreement (2011)
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WSURANCEBROKERAGREEMENT
This agreement is made and entered into this 1st day of April 2011, by and between the
, City of Salina, Kansas, hereinafter referred to as the "CITY" and Sunflower Insurance
Group, Inc. hereinafter referred to as "SIG."
RECITALS:
WHEREAS, insurance broker services are necessary to gain access to property and
liability insurers.SIG will be responsible for the following areas of risk:
o Property / Inland Marine
o Commercial General Liability
o Public Official Liability
o Employment Practices Liability
o Law Enforcement Liability
o Automobile Liability / Physical Damage
o Umbrella/Excess Liability (if any)
o Crime & Individual Bonds
o Underground Storage Tank Liability (if any)
o Other insurance that may be necessary; and
WHEREAS, the Governing Body of the CITY has determined that to help accomplish
this, it is necessary to contract for services of SIG; and
WHEREAS, SIG'has offered their services in such a capacity and the parties hereto
agree as follows:
SECTION I. CONTRACT ADMINISTRATION
On behalf of the CITY, the contract shall be administered by the City Manager. SIG
shall report to the City Manager. The CITY reserves the right to request or approve
. changes in SIG personnel assigned to the account.
SECTION II. SIG DUTIES
The duties and services of SIG shall include, but shall not be limited to:
1. Work with CITY to manage risk and control costs. Based on CITY input to SIG
describing' CITY business and operations, we will:
a. Analyze the factors that are driving CITY costs of risk
b. Develop and prE?sent cost effective strategies for managing these risks
c. Provide CITY access to SIG risk management programs including:
i. Human Capital Management
ii. Risk Assessment
iii. Alternative Risk Financing
IV. Contract Management
v. Workplace Safety
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vi. Business Continuity
vii. Loss Recovery
2. Obtain insurance renewal information from the CITY or the CITY's Risk
Management Consultant.
3. Work with the CITY and their Risk Management Consultant to formulate a
marketing strategy forthe renewal of the CITY's commercial insurance package.
4. Give CITY access to necessary insurance companies via direct contract or by
use of a secondary broker.
5. Produce comprehensive submissions including completion of insurance
applicatior;1s with the assistance and approval of the CITY. SIG represents the
CITY, not the insurance company.
6. Formally Rresent these submissions to each selected market as directed by the
CITY or the CITY's Risk Management Consultant. Negotiate with the carriers on
the CITY's behalf and keep the CITY informed of significant developments in
those negotiations.
7. Provide the CITY with pricing and coverage information as provided by the
carriers.
8. Place/bind insurance coverage as instructed by the CITY.
9. Prepare and distribute binders, auto 10 cards, certificates and evidence of
property insurance prior to the effective date ,of the commercial package policy.
10. Prepare and distribute detailed premium invoices to the CITY.
11. Process ehdorsement requests from the CITY.
12. Review the accuracy of all the commercial package policies for the CITY within
30 days of receipt of such policy from the carrier.
13. Distribute pne hard copy and one electronic copy of the policies to the CITY
within 30 days of receipt of the policies from the carrier.
14. Prepare for and attend meetings, as requested by the CITY.
15. Provide te.chnical assistance regarding coverage questions, risk financing and
loss control programs or techniques as requested by the CITY.
16. Work with CITY to develop, recommend, negotiate and implement cost-effective
insurance and/or risk financing programs.
17. Provide financial information for each insurer providing coverage to the CITY.
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18. Provide an easy-to-read annual policy coverage summary in CITY's format,
including oasic limits, deductibles, policy numbers, insurer and premiums by
June 1 which would show all new coverage and updates on changes to existing
coverage.
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19. By February 15, 2012, SIG will prepare a stewardship report which will include a
complete list of insurance in force, an evaluation of the overall insurance
program, including options or recommendations for change (and information
regarding new coverage available), a forecast of market conditions, estimated
future premiums for budgeting purposes. Stewardship Review to assess
performance and establish future objectives. The Stewardship Review will
include:
a. A complete review and analysis of the existing risk transfer program
b. An illustration of alternative options
c. An illustration of CITY's total cost of risk
d. Determination of any short term and long term influences that stand to
impact CITY's program
e. An overview from CITY's team of the changes to CITY goals, objectives,
operations and exposures
20. Provide assistance in ~he documentation, presentation, negotiation and
settlement of claims with insurance carriers on the CITY's behalf. All original
pictures and documents provided by the CITY will be remitted to the appropriate
insurance carrier. SIG will:
a. Coordinate procedures to ease administration and claims handling
b. Act as a liaison between CITY and the insurer or claims service
organization and negotiate on CITY's behalf
c. Monitor significant claims and provide CITY with periodic updates
d. Monitor third party claims to ensure that CITY's interests are protected
e. Review reserves and advise where adjustments are warranted
21. Field inquiries from claimants and follow-up with carrier until the claim has
closed.
22. Provide a quarterly status report of claims. This report will be submitted to the
Risk Management Specialist for review. Respond to any questions or concerns
this report may generate.
23. Inform the CITY of upcoming seminars that SIG becomes aware of that may be
beneficial to the CITY for loss control/risk management purposes.
24. Deliver support and administrative assistance. SIG is committed to providing
CITY with prompt, accurate services at all times. SIG will:
a. Provide a professional and competent team to service your account
b. Respond to questions and requests quickly
c. Return phone calls promptly
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d. Assist CITY in the preparation of insurance applications
e. Process certificates of insurance in a timely manner
f. Issue binders prior to the expiration of your current policies, whenever
possible
g. Maintain an updated schedule of insurance
h. Check the accuracy of audits, rating adjustments and dividend
calculations
25. Provide CITY with new ideas and information on a regular basis. Protecting the
financial health of the CITY is a process that requires action, not reaction. To
ensure that the CITY's risk management program is sustainable and competitive,
we will:
a. Keep CITY informed of significant changes and/or trends in the insurance
ind~stry that could have an impact on the CITY
b. Keep pace with the CITY's business to advise CITY on how emerging
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trends, new developments, regulations and legislation may affect CITY
from a risk and insurance perspective
c. Connect CITY with the web based resources located on our website at
www.sunflowerinsurance.com
SECTION III. COMPENSATION
The CITY agrees to pay SIG a fee of $28,892 for all services performed during the
initial one-year term of this agreement. For any renewal term pursuant to Section XII,
the fee shall increase by two percent (2%) over the prior term. For the reason that the
insurance renewal process requires that SIG perform a significant segment of its work
in the first four mOl)ths of the term of this agreement, SIG shall bill the City for fifty
percent (50%) if its fee at the beginning of each term and the remaining fifty percent
(50%) four months later. Payment by the City shall be due within thirty (30) days of
receipt of the billing.
SECTION IV. INSURANCE
SIG agrees to maintain Professional Liability insurance in an amount of no less than
$1,000,000 and, upon request, provide the CITY with certification thereof.
SECTION V. INDEPENDENT CONTRACTOR
SIG is an independent contractor and as such is not an employee of the CITY. SIG is
responsible for any and all federal, state and local taxes.
SECTION VI. ASSIGNMENT
Parties hereto agree that neither shall assign, sublet or transfer their interest in this
contract without the written consent of the other and further agree that this contract
binds parties, their successors, trustees, assignees and legal representatives. '
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SECTION VII. EQUAL OPPORTUNITY LAWS
SIG agrees to abide by all Federal, State and local Equal Employment Opportunity
Laws, including filing an affirmative action plan with the City of Salina Human Relations
Department.
SECTION VIII. PROHIBITION AGAINST CONTINGENT FEES
SIG warrants that it has not employed or retained any company or person, other than a
bona fide employee working for SIG, to solicit or secure this contract, and that it has not
paid or agreed to pay any company or person, other than a bona fide employee, any
fee, commission, or percentage, brokerage, fee, gifts or any other consideration
contingent upon or resulting from the award or making of this contract. Any
intermediaries may be compensated by the insurance company out of paid insurance
premiums. For breach or violation of this warranty, the CITY may terminate this
contract without liability or may, at its discretion, deduct from the contract price or
otherwise recover the full amount fee, commission, percentage brokerage fee, gift or
contingent fee.
SECTION IX. APPLICABLE LAW
This contract is_entered into under the pursuant to, and is to be construed and
enforceable in accordance with, the laws of the State of Kansas.
SECTION X. TITLES. SUBHEADS AND CAPITALIZATION
Title and subheadings as used herein are provided only as a matter of convenience and
shall have no legal bearing on the interpretation of any provision of this Agreement.
Some terms are capitalized throughout this Agreement but the use of or failure to use
capitals shall have no legal bearing on the interpretation of such terms.
SECTION XI. SEVERABILITY CLAUSE
Should any provision of this Agreement be determined to be void, invalid,
unenforceable or illegal for whatever reason, such provision(s) shall be null and void;
provided, however, that the remaining provisions of this Agreement shall be unaffected
thereby and shall continue to be valid and enforceable.
SECTION XII. DURATION OF CONTRACT & TERMINATION
The initial term of this agreement shall begin April 1 ,2011 and end March 31,2012,
and shall self-renew for two consecutive renewal terms of the same duration, subject to
termination by:
1. Either party, at the end of any term, by written notice to the other party no later
than sixty (60) days prior to the end of the same term;
2. SIG, for any reason, by (a) written notice to the CITY no less than sixty (60) days
prior to the termination date and (b) reimbursement to the City of SIG's fee to the
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.. . . .
date of termination as pro-rated on a daily basis over the one-year term, payable
by SIG simultaneously with the written notice of termination;
3.. The CITY, for any reason, by written notice to SIG no less than sixty (60) days
prior to the termination date. If the termination date is August 1 or later, SIG's
fee shall be deemed fully earned. If the termination date is prior to August 1,
SIG shall be deemed to have earned the fifty percent (50%) if its fee payable the
beginning of the term and the remaining fifty percent (50%) shall be prorated
over the first four months of the term on the basis of the number of days the
agreement remains in effect during the first four months of the term; or
4. Either party, on the basis of the other party's default pursuant to Section XIV.
SECTION XIII: RECORDS
CITY is entitled to non-proprietary copies of reports and/or documents relating to the
CITY's program. However, files are generally not retained for more than 5 years after
the expiration of a particular policy's term.
SECTION XIV. DEFAULT
If either party fails to perform a material obligation under this agreement, the non-
defaulting party shall give written notice of the specific event of default and that if the
default is not cured with thirty (30) days, the non-defaulting party may terminate this
agreement. If, within thirty (30) days after the receipt of the notice, the defaulting party
has neither corrected the default nor, in the case which cannot be corrected in thirty
(30) days, begun good faith efforts to correct the default and thereafter proceeded to
diligently correct the default, then the non-defaulting party may declare the agreement
to be terminated as of the date specified by the non-defaulting party. In the event of
termination of this agreement on the basis of a default by:
1. SIG - SIG's fee shall be pro-rated on a daily basis over the one-year term and
SIG shall refund to the City the balaBce of the pro-rated fee from the date of
termination through the March 31 end of the term. Acceptance of the fee refund
by the City shall not constitute a waiver by the City of any other remedy available
to the City under Kansas law.
2. The City - The City's obligation to pc3y SIG's fee in full shall remain in effect
regardless of whether the date of termination as established by SIG predates the
City's obligation to pay the remaining fifty percent (50%) of SIG's fee.
ACCEPTED AND AGREED:
SUNFLOWER INSURANCE GROUP, INC.
By: ~Pn// ~
Date:
3h9p/
By:
Date: :3 - 2- f-If
Rev. 3/24/11
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