HomeMy WebLinkAbout07 - Selection of Broker of Record — Property and Casualty InsuranceQ �EwPpRr
CITY OF
z NEWPORT BEACH
City Council Staff Report
October 25, 2016
Agenda Item No. 7
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Barbara Salvini, Human Resources Director - 949-644-3300,
bsalvini@newportbeachca.gov
PREPARED BY: Sheri Anderson, Risk Manager, sanderson@newportbeachca.gov
PHONE: 949-644-3307
TITLE: Selection of Broker of Record — Property and Casualty Insurance
ABSTRACT:
The City of Newport Beach purchases a broad range of property and casualty insurance
coverage through a licensed California broker. The City has contracted with Alliant
Insurance Services ("Alliant") for this service since December 1, 2010. Because this
agreement expires on November 30, 2016, the City recently conducted and completed
a Request for Proposals (RFP) seeking a broker to perform these services. Based on
the information received and analyzed, staff's recommendation is to award the contract
to the most highly qualified company which will best serve the needs of the City.
RECOMMENDATION:
a) Determine that the action is exempt from the California Environmental Quality Act
(CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines
because it will not result in a physical change to the environment, directly or
indirectly;
b) Authorize the Mayor to enter into the proposed five-year (5) Professional Services
Agreement with Alliant Insurance Services (Alliant) to act as the City's Property and
Casualty Broker of Record; and
c) Delegate authority to the City Manager to annually bind coverage and authorize the
City Manager to approve premium payments in the amount of the annual premiums
from the Council approved budget accounts designated for insurance for the term of
the Professional Services Agreement.
FUNDING REQUIREMENTS:
The current adopted budget includes sufficient funding for the Property and Casualty
Broker fees. It will be expensed to the Insurance Reserve Funds, account numbers
7517510-891039 and 75000750-891039.
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Selection of Broker of Record — Property and Casualty Insurance
October 25, 2016
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DISCUSSION:
In addition to being a full service city, Newport Beach has additional exposures related
to its beaches, oil wells, reservoirs and protected wildlife and lands. The City maintains
comprehensive insurance coverage with a schedule of insurance which includes All
Risk Property (including Boiler and Machinery), Earthquake and Flood, Crime,
Fiduciary, Watercraft, Cyber, Excess Workers' Compensation, Excess General Liability,
Pollution Liability, Public Official and Oil Well Bonds. Every renewal cycle, the City
requires its broker to re-evaluate the City's risks and policy options in order to ensure it
is receiving outstanding coverage for the best price.
On August 17, 2016, the City published Request for Proposal (RFP) solicitation 17-04,
seeking proposals from qualified parties interested in providing Insurance Broker of
Record services to the City. The RFP was posted on the City's PlanetBids portal for
public availability. The RFP submittal deadline closed on September 14, 2016, and the
City received three (3) proposals from: Alliant Insurance Services, AON Insurance
Services and Arthur J. Gallagher, Inc. ("Gallagher"). The proposals were evaluated in
accordance with City Council Policy F-14 regarding the procurement of services. An
evaluation panel was assembled consisting of the City's current Risk Manager and two
outside Risk Management professionals. The panel rated the proposals using a
Qualifications -Based Selection (QBS) process that was outlined in the RFP solicitation.
The following criteria comprised the QBS proposal scoring:
Proposer's experience in providing Insurance Broker of Record services;
A demonstrated understanding of the City's insurance brokerage needs;
Ability to perform all services requested in the RFP;
References and past performance on projects with local government agencies;
and
Proposed Cost.
Independently of one another, the panel members evaluated the written proposals and
ranked the vendors in the same order. Following completion of the Proposal Review
and Cost evaluations by Purchasing, the panel conducted interviews with each of the
vendors. The firms were rated on the information contained in their written proposals
and provided orally at the interviews. Evaluative criteria included each firm's
qualifications and experience with municipal risks; the qualifications and experience of
the individuals who would be assigned to the City's account; their ability to provide the
scope of services required by the City (including their information systems technology
capabilities and value added services/expertise); and the quality of their conceptual
approach to marketing and servicing the City.
The RFP indicated that 80% of the total consideration for award would be determined
by the aforementioned qualitative criteria (known as the "Technical Score") and the
remaining 20% determined by evaluating the proposed cost element of the proposals
(known as "Cost Score"). The Technical Score is the average of each proposal's score
as rated by the panel combined with the average interview score. The Cost Score is a
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Selection of Broker of Record — Property and Casualty Insurance
October 25, 2016
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ratio of points assigned by a metric wherein the proposal with the lowest cost is
awarded the maximum of 20 points and each proposal thereafter is assigned a number
of points directly proportional to the amount in which it is more costly than the lowest
cost proposal. The table below outlines the results of the Technical Score and Cost
Score.
CRITERIA
ALLIANT
INSURANCE
ARTHUR J.
GALLAGHER
AON
INSURANCE
PROPOSAL REVIEW SCORE
70.67
65.33
58.13
INTERVIEW SCORE
80.67
67.00
63.33
TECHNICAL SCORE
151.34
132.33
121.46
PROPOSED 5 -YEAR COST
$473,070
$404,800
$945,000
COST RATIO SCORE
17.11
20.00
8.57
TOTAL SCORE
168.45
152.33
130.03
RANK
1
2
3
The interviews served to re -affirm the panel's ranking of the three vendors. Overall,
Alliant ranked the highest. Alliant has a proven track record with the City in all of the
evaluation areas noted above. During the course of the current contract with Alliant, the
firm has demonstrated its extensive experience with municipalities, provided the City
with access to its proprietary insurance pools, provided the City access to lower
retention limits, and secured higher and broader policy limits and scope of coverage.
The following are examples:
In 2011, an extensive marketing effort was conducted by Alliant to secure
Excess Workers' Compensation coverage. This effort yielded two options
for coverage; Safety National and CSAC-EIA (EIA). Although both vendors
provided coverage at the statutory workers' compensation limit, EIA
provided significantly higher limits for Employers Liability and cost
$221,000 less than the Safety National option. These two were the only
markets willing to provide a quote at the $500,000 Self -Insured Retention
(SIR).
The City joined the EIA GL1 Excess General Liability program in 2013. EIA
was the only program that would allow the City to maintain its $500,000
SIR. Alliant secured coverage through EIA for the lower SIR and also
facilitated the elimination of aggregates on this coverage. The only
aggregate with the EIA coverage is for products/completed operations.
The City joined the Alliant Property Insurance Program (APIP — formerly
PEPIP) in 2011. Under APIP, the City secured higher limits at a reduced
cost. Specifically, the City saved 7% in premium when it moved to APIP.
When the City transitioned to APIP, several new and/or enhancements
were provided in the coverage, including, but not limited to: Miscellaneous
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October 25, 2016
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Unnamed Locations, Errors and Omissions, Course of Construction,
Automatic Acquisition, Claims Preparation Expenses, Terrorism, Cyber
Liability; and Free Appraisals for property valued at more than $5M.
Additionally, beyond marketing for premier and competitive coverages, Alliant
consistently provides critical subject matter expertise to the City's internal Risk
Management program. Annually, an Alliant dedicated staff member works directly with
City departments reviewing and assisting with over 500 vendor certificates of insurance
and additional insured endorsements to ensure compliance with the City's insurance
requirements. Not only does this save on City staff time and administrative costs, it
provides an additional layer of oversight on the City's contracts to confirm third party
insurance obligations are satisfied. Alliant regularly provides training to City staff and
access to periodic webinars related to compliance and regulatory issues.
When marina operators were encountering challenges securing affordable pollution
coverage, Alliant demonstrated its ability to meet the City's unique insurance needs
when it marketed and offered the marina operators the option to obtain reasonably
priced pollution coverage.
The EIA provides additional Risk Management resources that the City will implement if
Council approves the proposed agreement. These resources will increase efficiencies
with the City's administration of its DMV Employer Pull Notification program and enable
the City to provide targeted job-related training to employees.
Staff recommends the selection of Alliant based on the collection of information
received. Alliant received the highest scores from the panel and has proven its ability to
meet the City's insurance, service and training needs at a reasonable price. Although
Gallaher's cost proposal is lower, the City would incur additional standard fees to
remain in several of our current coverage pools, which would increase the overall cost
of the Gallagher proposal higher than Alliant's proposed costs. In addition, the City
would lose access to additional membership programs offered through CSAC-EIA. City
staff conducted reference checks. Aon Insurance Services received the lowest
Technical Score and was not competitively priced; therefore, the company was not
considered for award of this project.
Lastly, staff recommends that during the term of the Professional Services Agreement,
Council delegate authority to the City Manager to annually bind coverage and authorize
premium payments from Council -approved insurance budget accounts for routine
insurance renewals. Staff will bring to Council any significant changes to the coverage
structure or premium quotes which exceed the approved budget.
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ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A - Professional Services Agreement (PSA) with Alliant Insurance Services
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH ALLIANT INSURANCE SERVICES, INC. FOR
PROPERTY AND CASUALTY INSURANCE BROKER OF RECORD SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 1 st day of December, 2016 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city
("City"), and ALLIANT INSURANCE SERVICES, INC., a Delaware corporation
("Consultant"), whose address is 1301 Dove Street, Suite 200, Newport Beach,
California 92660, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide property and casualty insurance
broker of record services ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned
parties as follows:
u�iril
The term of this Agreement shall commence on the Effective Date, and shall
terminate on November 30, 2021, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this
Agreement and Consultant shall perform the Services in accordance with the schedule
included in Exhibit A. In the absence of a specific schedule, the Services shall be
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performed to completion in a diligent and timely manner. The failure by Consultant to
strictly adhere to the schedule set forth in Exhibit A, if any, or perform the Services in a
diligent and timely manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of
Billing Rates attached hereto as Exhibit B and incorporated herein by reference.
Consultant's compensation for all Work performed in accordance with this Agreement,
including all reimbursable items and subconsultant fees, shall not exceed Five Hundred
Thousand Dollars and 001100 ($500,000.00), without prior written authorization from
City. No billing rate changes shall be made during the term of this Agreement without
the prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the
specific task in the Scope of Services to which it relates, the date the Services were
performed, the number of hours spent on all Work billed on an hourly basis, and a
description of any reimbursable expenditures. City shall pay Consultant no later than
thirty (30) calendar days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses
specifically identified in Exhibit B to this Agreement or specifically approved in writing in
advance by City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the
Project, but which is not included within the Scope of Services and which the parties did
not reasonably anticipate would be necessary at the execution of this Agreement.
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Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Rennetta Poncy to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project
any of its personnel assigned to the performance of Services upon written request of
City. Consultant warrants that it will continuously furnish the necessary personnel to
complete the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project
Manager and any other assigned staff shall be equipped with a cellular phone to
communicate with City staff. The Project Manager's cellular phone number shall be
provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Human Resources Department.
City's Human Resources Manager or designee shall be the Project Administrator and
shall have the authority to act for City under this Agreement. The Project Administrator
shall represent City in all matters pertaining to the Services to be rendered pursuant to
this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all
existing relevant information on file at City. City will provide all such materials in a
timely manner so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All
Services shall be performed by qualified and experienced personnel who are not
employed by City. By delivery of completed Work, Consultant certifies that the Work
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conforms to the requirements of this Agreement, all applicable federal, state and local
laws, and legally recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and
shall keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner
relate (directly or indirectly) to any breach of the terms and conditions of this
Agreement, any Work performed or Services provided under this Agreement including,
without limitation, defects in workmanship or materials or Consultant's presence or
activities conducted on the Project (including the negligent, reckless, and/or willful acts,
errors and/or omissions of Consultant, its principals, officers, agents, employees,
vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly
by any of them or for whose acts they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to
require Consultant to indemnify the Indemnified Parties from any Claim arising from the
sole negligence or willful misconduct of the Indemnified Parties. Nothing in this
indemnity shall be construed as authorizing any award of attorneys' fees in any action
on or to enforce the terms of this Agreement. This indemnity shall apply to all claims
and liability regardless of whether any insurance policies are applicable. The policy
limits do not act as a limitation upon the amount of indemnification to be provided by
Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
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limited by statute, rule or regulation and the expressed terms of this Agreement. No
civil service status or other right of employment shall accrue to Consultant or its
employees. Nothing in this Agreement shall be deemed to constitute approval for
Consultant or any of Consultant's employees or agents, to be the agents or employees
of City. Consultant shall have the responsibility for and control over the means of
performing the Work, provided that Consultant is in compliance with the terms of this
Agreement. Anything in this Agreement that may appear to give City the right to direct
Consultant as to the details of the performance of the Work or to exercise a measure of
control over Consultant shall mean only that Consultant shall follow the desires of City
with respect to the results of the Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in
order to ensure the Project proceeds in a manner consistent with City goals and
policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the
term of this Agreement or for other periods as specified in this Agreement, policies of
insurance of the type, amounts, terms and conditions described in the Insurance
Requirements attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall
be construed as an assignment: The sale, assignment, transfer or other disposition of
any of the issued and outstanding capital stock of Consultant, or of the interest of any
general partner or joint venturer or syndicate member or cotenant if Consultant is a
partnership or joint -venture or syndicate or co -tenancy, which shall result in changing
the control of Consultant. Control means fifty percent (50%) or more of the voting
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power or twenty-five percent (25%) or more of the assets of the corporation, partnership
or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such
subcontractor other than as otherwise required by law. City is an intended beneficiary
of any Work performed by the subcontractor for purposes of establishing a duty of care
between the subcontractor and City. Except as specifically authorized herein, the
Services to be provided under this Agreement shall not be otherwise assigned,
transferred, contracted or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other
writing produced, including but not limited to, websites, blogs, social media accounts
and applications (hereinafter "Documents"), prepared or caused to be prepared by
Consultant, its officers, employees, agents and subcontractors, in the course of
implementing this Agreement, shall become the exclusive property of City, and City
shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Additionally, all material posted in
cyberspace by Consultant, its officers, employees, agents and subcontractors, in the
course of implementing this Agreement, shall become the exclusive property of City,
and City shall have the sole right to use such materials in its discretion without further
compensation to Consultant or any other party. Consultant shall, at Consultant's
expense, provide such Documents, including all logins and password information to City
upon prior written request.
17.2 Documents, including drawings and specifications, prepared by
Consultant pursuant to this Agreement are not intended or represented to be suitable
for reuse by City or others on any other project. Any use of completed Documents for
other projects and any use of incomplete Documents without specific written
authorization from Consultant will be at City's sole risk and without liability to
Consultant. Further, any and all liability arising out of changes made to Consultant's
deliverables under this Agreement by City or persons other than Consultant is waived
against Consultant, and City assumes full responsibility for such changes unless City
has given Consultant prior notice and has received from Consultant written consent for
such changes.
17.3 All written documents shall be transmitted to City in formats compatible
with Microsoft Office and/or viewable with Adobe Acrobat.
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18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept
confidential unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including
costs, contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3)
years, or for any longer period required by law, from the date of final payment to
Consultant under this Agreement. All such records and invoices shall be clearly
identifiable. Consultant shall allow a representative of City to examine, audit and make
transcripts or copies of such records and invoices during regular business hours.
Consultant shall allow inspection of all Work, data, Documents, proceedings and
activities related to the Agreement for a period of three (3) years from the date of final
payment to Consultant under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction
of the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall
not discontinue Work as a result of such withholding. Consultant shall have an
immediate right to appeal to the City Manager or designee with respect to such disputed
sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of
return that City earned on its investments during the time period, from the date of
withholding of any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would
have resulted if there were not errors or omissions in the Work accomplished by
Consultant, the additional design, construction and/or restoration expense shall be
borne by Consultant. Nothing in this Section is intended to limit City's rights under the
law or any other sections of this Agreement.
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23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the
Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the
Act. Failure to do so constitutes a material breach and is grounds for immediate
termination of this Agreement by City. Consultant shall indemnify and hold harmless
City for any and all claims for damages resulting from Consultant's violation of this
Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Cheryl Anderson
Human Resources Manager
City of Newport Beach
100 Civic Center Drive
P.O. Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Rennetta Poncy
Alliant Insurance Services, Inc.
1301 Dove Street, Suite 200
Newport Beach, CA 92660
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26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in
writing, all claims for compensation under or arising out of this Agreement.
Consultant's acceptance of the final payment shall constitute a waiver of all claims for
compensation under or arising out of this Agreement except those previously made in
writing and identified by Consultant in writing as unsettled at the time of its final request
for payment. Consultant and City expressly agree that in addition to any claims filing
requirements set forth in the Agreement, Consultant shall be required to file any claim
Consultant may have against City in strict conformance with the Government Claims Act
(Government Code sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the
provisions of this Agreement at the time and in the manner required, that party shall be
deemed in default in the performance of this Agreement. If such default is not cured
within a period of two (2) calendar days, or if more than two (2) calendar days are
reasonably required to cure the default and the defaulting party fails to give adequate
assurance of due performance within two (2) calendar days after receipt of written
notice of default, specifying the nature of such default and the steps necessary to cure
such default, and thereafter diligently take steps to cure the default, the non -defaulting
party may terminate the Agreement forthwith by giving to the defaulting party written
notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for
which Consultant has not been previously paid. On the effective date of termination,
Consultant shall deliver to City all reports, Documents and other information developed
or accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are
true and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be
subject to approval of the Project Administrator and City.
Alliant Insurance Services, Inc. Page 9
7-14
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition contained herein, whether
of the same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein. No verbal agreement or implied covenant shall be held to vary the provisions
herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall
govern this Agreement and all matters relating to it and any action brought relating to
this Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising
under this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Alliant Insurance Services, Inc. Page 10
7-15
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By: (��1
Aaron C. Harp (hM
City Attorney
ATTEST:
Date:
M
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date-
ate:
By-
By:
Diane
Diane B. Dixon
Mayor
CONSULTANT: Alliant Insurance
Services, Inc., a Delaware corporation
Date:
By:
Gordon B. DeCombes
Executive Vice President
Date:
By:
P. Gregory Zimmer, Jr.
President & Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Alliant Insurance Services, Inc.
Page 'I 1
7-16
EXHIBIT
SCOPE OF SERVICES
Alliant Insurance Services, Inc.
Page A-1
7-17
SCOPE OF SERVICES
Note: This Scope of Services Is intended to be thorough. However, the City relies on the professionalism and
competence of Proposers to be knowledgeable of the general areas identified and to recommend any additions
or corrections to the Scope of Services.
Outline in your proposal the services your firm will provide. If certain services are to be provided
through an insurer, other broker or independent contractor, explain in detail what services each will
provide and how all services will be coordinated. Service requirements for the City's Insurance Broker
of Record include performing all customary duties of an insurance broker, including but not limited to
the following:
Administrative Requirements
1. Meet with the City's Risk Management staff no less than quarterly to discuss insurance
questions, concerns and/or trends that may affect the City;
2. Attend occasional meetings with City management or other persons as requested;
3. Submit an annual stewardship report, including a summary of past activity and action
plans (anticipated goals) for the coming contract period prior to the beginning of each
year of service, on or about December 1st. Information in the report should include, but
is not necessarily limited to:
■ Insured program earned premiums and incurred losses by year and by coverage line,
■ Anticipated renewal terms and conditions and other indications of market
conditions, trends and anticipated changes,
• Identified problem areas such as claims handling, safety hazards, uninsured risks,
etc.,
■ Recommendations for improved program design,
■ Services performed and planned,
■ Accounting of all income received on this account, including income to affiliates,
subsidiaries and parent organizations, and the method by which fees are calculated
(for charges other than base fee);
4. Maintain confidentiality of all information provided to the Broker pursuant to the
contract, and return any written, computer-generated or other tangible documentation
or proprietary information to City upon request or at the termination of the contract;
Broker shall not permit reproduction or use of confidential information except as
authorized by the City. Documents generated, provided or prepared by Broker on behalf
of the City are the property of the City and must be turned over to the City upon request
in the form(s) requested (i.e., on diskette, paper, or otherwise);
5. Inform City immediately of any proposed changes of the individuals handling City's
account and the qualifications of the prospective individuals. Such changes shall be
made subject to agreement with City;
111Page
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6. Be knowledgeable of the needs of the City and be adept in identifying and measuring
risks of a municipality;
7. Maintain accurate claim data on an accident date basis and provide City with a quarterly
status report;
8. Service insurance requests (e.g., issuing certificates of insurance, endorsements, etc.) as
needed;
9. Review certificates of insurance for City contracts; approve or provide department
checklistfor corrections and assist until certificate complies and is approved;
10. Conduct contracttraining for City staff;
11. Keep current and provide to City a complete listing of all insurance policies and all
details pertinent to the policies in the form of a "policy digest";
12. Monitor insurance coverage to assure continuing balance of coverage scope, cost,
service and stability;
13. Cooperate in any transition to another broker at the expiration of the five-year contract.
Broker will be required to deliver all data/documents as set forth herein. Payment of
final monthly invoice shall be held until transfer of all data/documents is completed to
the satisfaction of the City.
Marketing and Negotiating Insurance Coverage
14. Continually monitor and analyze City's operations and loss exposures;
15. Perform all on-site inspections necessary to identify exposures;
16. Recommend coverages consistent with the exposures to provide the highest level of
coverage at the least possible cost to the City;
17. Collect and maintain for future use all the data necessary, and prepare professional
insurance proposal submission packages for proper marketing of various coverages;
18. Market the insurance needs of the City, preparing underwriting specifications and bid
packages for all insurance placements, including renewals;
19. Negotiate with underwriters on terms and conditions to obtain the most beneficial and
cost-effective coverages available to the City, and include the City's Risk Management
staff in negotiations;
20. Provide, as requested from time to time by the City, insurance quotations for additional
insurance coverages;
21. Verify the rates and premiums for accuracy; determine that rating bureau and
underwriter rates are correct;
_.._..--- .--- -
12jpag.e
7-19
22. Check wording for accuracy on new policies, binders, certificates, endorsements or
other documents when they are received, verify that all negotiated coverage
enhancements are provided and obtain revisions in such documents when needed;
23. Promptly submit originals of all policies and endorsements to City.
24. Oversee and coordinate all services provided by underwriters and insurance carriers on
behalf of the City;
25. Assure that all coverages are placed with financially responsible insurers that meet
minimum rating requirements as approved by Risk Management;
26. Use California -admitted insurers unless there are compelling reasons (e.g., significant
cost savings, financial security) to use non -admitted insurers;
Insurance Consultative/Advisor Services
27. Respond within 24 hours to answer insurance related questions/concerns;
28. Make a good faith effort to keep Risk Management informed of all market
developments which might affect the City's access to or cost of insurance;
29. Annual review of purchase order agreements, leases, and other contract templates to
determine if a risk or exposure can be transferred or avoided;
30. Work with, and provide assistance to the City on loss control programs,
31. Participate in and advise on claims and litigation management and analysis and assist in
the adjustment and settlement of claims and losses;
32. Review quarterly loss runs of all claims made against the City and present findings and
recommendations in a format acceptable to Risk Management;
33. Electronically maintain property schedule of building valuations for all buildings owned
by the City; conduct extensive inspection of all City locations every three years and
compute valuations;
34. Review and comment on insurer loss control activities and recommendations.
13 Page
7-20
EXHIBIT B
SCHEDULE OF BILLING RATES
Alliant Insurance Services, Inc.
Page B-1
7-21
Alliant is amenable to working with the City of Newport Beach on a flat fee basis.
Our proposed base fee for general brokerage services is doted below and is inclusive of all services
to be rendered by our firm within the scope of this RFP except as noted below.
The services that Alliant has historically provided for Vendor Certificate Review has been arduous
and very tirne consuming. However we recognize that this task has been an aspect of our service
that the City holds very valuable. As such, we are proposing a separate annual fee should the City
elect to continue with this service.
$25;625 _ $92;25
X69;998 X26,922'. $86,920..
-53-
7-22
CITY OF NEWPORT BEACH, CA
SEPTEMBER 14, 2018
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�. i7 � � � LF ;� � , 1i m� r,�; i a t rr - �'�e 3i .i �Y iF�e- 4 �( t., s �•''k•i%� f
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a � . ?� ix `• `ter' ec� i� ^� �r��1 L "��o� i � i�� � ��,,��i , v"�' � F .s I t�"�{
a y, 2 � t� ��r �, � • I ,f2� , I } i 'f�R ra� �r£E�h�i ie� a �ft"1 7+,rk�� '.4e' C. t� ti f . -S+ ,.�
��.� �' �' � t.#�' _` _ �.E e�a�,�� �.:�;}:,�.r�ir.„��$.E:'�e:„•;.•°F'�k�,'fi��-rt ;:z�A� •�
Special Events and Vendors/Contractors Programs are not included within the fee schedule as
these premiums are paid by the vendor or event holder,
The proposed fee does not include Alliant Underwriting Services (AUS) who are paid directly
From the carriers for providing underwriting services to the APIP, ANML, OIL, CAMP, CALIP
and SLIP Programs, should the City choose to continue participation in any of these programs. It
also does not include any fees for wholesalers or intermediaries, whose use is deemed necessary
and beneficial in the placement of some of the City's insurance programs. As previously noted
Alliant does not own any wholesaler or intermediary firm,
Loss Control and Appraisal Services outside of those provided within our proprietary programs
are available at additional discounted charges, based on the required service. Loss Control via
Alliant Business Services is available at a rate starting at $150.00 per hour plus expenses. Appraisal
services are available at rates beginning at $225 per building.
Il'e ivish to emphasize our flexibility in working with the City in this area and are open to any
alternatives the City may prefer.
Alliant Undenvritina Services (AUS):
Alliant Underwriting Services (AUS) is a separate division of Alliant that employs underwriters
to work on a variety of specialty programs distributed by Alliant brokers to specific industry
segments. This activity originated in property/casualty and workers' compensation programs for
Tribal Nations, quickly followed by the APIP program for public agencies, and now AUS provides
underwriting services for a wide variety of Alliant programs including restaurants, waste haulers,
auto parts manufacturers, contractors, commercial real estate owners, and others. In all cases, the
underwriters employed by AUS are just that — seasoned and experienced underwriters, some with
over 30 years of underwriting experience for insurers.
The services provided for these programs, for example the APIP and ANML Liability Programs
for the City, are paid by the carrier to Alliant because Alliant is performing the underwriting
services that otherwise would be performed by the carrier themselves. In other words, the carrier
has outsourced this function. In all of these cases, AUS underwriters have the necessary expertise
and can provide the underwriting services on a product or program more efficiently than the
carrier(s) itself, and therefore the carriers on these AUS underwritten programs choose to utilize
AUS for that purpose.
It is important to note that efforts are not duplicated by this team. Your Alliant retail producers
and service staff are responsible for the delivery of services outlined in the "scope of services"
including but not limited to: the preparation of underwriting information, submission of insurance
specifications to all agreed upon markets, negotiations with underwriters and analysis of the
proposed policy forms. This is work that must be done to properly market and place the City's
risks with any market or carrier, whether an Alliant program, or not. i.
-54-
7-23
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury
by disease in accordance with the laws of the State of California, Section
3700 of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council,
boards and commissions, officers, agents, volunteers, employees and any
person or entity owning or otherwise in legal control of the property upon
which Consultant performs the Project and/or Services contemplated by
this Agreement.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The
policy shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract
(including the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Alliant Insurance Services, Inc.
Page C-1
7-24
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and three million dollars
($3,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement
and Consultant agrees to maintain continuous coverage through a period
no less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. Workers' Compensation insurance coverage
maintained or procured pursuant to this Agreement shall be endorsed to
waive subrogation against City, its City Council, boards and commissions,
officers, agents, volunteers, employees and any person or entity owning or
otherwise in legal control of the property upon which Consultant performs
the Project and/or Services contemplated by this Agreement or shall
specifically allow Consultant or others providing insurance evidence in
compliance with these requirements to waive their right of recovery prior to
a loss. Consultant hereby waives its own right of recovery against City,
and shall require similar written express waivers from each of its
subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, and automobile liability, if required, but not including
professional liability, shall provide or be endorsed to provide that City, its
City Council, boards and commissions, officers, agents, volunteers,
employees and any person or entity owning or otherwise in legal control of
the property upon which Consultant performs the Project and/or Services
contemplated by this Agreement shall be included as insureds under such
policies.
C. Primary and Non Contributory. All liability coverage shall apply on a
primary basis and shall not require contribution from any insurance or self-
insurance maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
Alliant Insurance Services, Inc. Page C-2
7-25
A. Evidence of Insurance. Consultant shall provide certificates of insurance
to City as evidence of the insurance coverage required herein, along with
a waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance
certificates and endorsement must be approved by City's Risk Manager
prior to commencement of performance. Current certification of insurance
shall be kept on file with City at all times during the term of this
Agreement. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features
or limits contained in this Section are not intended as a limitation on
coverage, limits or other requirements, or a waiver of any coverage
normally provided by any insurance. Specific reference to a given
coverage feature is for purposes of clarification only as it pertains to a
given issue and is not intended by any party or insured to be all inclusive,
or to the exclusion of other coverage, or a waiver of any type. If the
Consultant maintains higher limits than the minimums shown above, the
City requires and shall be entitled to coverage for higher limits maintained
by the Consultant. Any available insurance proceeds in excess of the
specified minimum limits of insurance and coverage shall be available to
the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant
fails to provide and maintain insurance as required herein, then City shall
have the right but not the obligation, to purchase such insurance, to
terminate this Agreement, or to suspend Consultant's right to proceed until
proper evidence of insurance is provided. Any amounts paid by City shall,
at City's sole option, be deducted from amounts payable to Consultant or
reimbursed by Consultant upon demand.
Alliant Insurance Services, Inc. Page C-3
7-26
G. Timely Notice of Claims. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Contractor's performance under this Contract, and that involve or may
involve coverage under any of the required liability policies. City assumes
no obligation or liability by such notice, but has the right (but not the duty)
to monitor the handling of any such claim or claims if they are likely to
involve City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of
the Work.
Alliant Insurance Services, Inc. Page C-4
7-27