HomeMy WebLinkAbout2005-074 SERVICE CONTRACT FOR MULTIPLE LINES CLAIMS HANDLING
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THIS SERVICE CONTRACT FOR AUTOMOBILE LIABILITY, GENERAL LIABILITY AND WORKERS '
COMPENSATION CLAIMS HANDLING is made and entered into this 14 `x' day of January, 2005 , but is effective
for all purposes as of the lst day of January, 2005 , by and between INDIAN RIVER BOARD OF COUNTY
COMMISSIONERS ( referred to as the "Employer"), and JOHNS EASTERN COMPANY, INC . (referred to as the
" Service Agent") .
WITNESSETH :
WHEREAS , the Employer has undertaken to self-insure its Automobile Liability, General Liability
and Workers ' Compensation liability in accordance with the Workers ' Compensation Law and other applicable
statutes and regulations ; and
WHEREAS , the Service Agent is engaged in the supervision and administration of programs for
self-insured employers ;
WHEREAS , the Employer desires to engage the Service Agent for, and the Service Agent
desires to assist the Employer in , automobile liability, general liability and workers ' compensation
claims handling ;
NOW, THEREFORE , for and in consideration of the premises and of the mutual obligations ,
performance of services , and payment of compensation set forth herein , the parties agree as follows :
1 . Engagement . The Employer hereby engages the Service Agent to supervise and
administer the Self-Insured Workers ' Compensation Program of the employer in
accordance with the Workers ' Compensation Law as adopted and amended by the
State of Florida (the "Law") and the applicable rules and regulations as promulgated by the
applicable agencies of the State of Florida relating to the Law (the "Rules ") , all
in
accordance with the Service Agent ' s proposal dated December 16, 2004, a copy of which
is attached hereto and incorporated herein by this reference (the " Proposal ") .
2 . Term. Subject to termination pursuant to paragraph 8 , the term of this Agreement
shall begin as of January 1 , 2005 and shall terminate on September 30 , 2006;
provided, however, that this Agreement shall renew automatically for two additional one-
year terms unless otherwise terminated .
3 . Fund for Payment of Claims . The Employer has the sole obligation and
responsibility for funding the payment of claims made by its employees under the
Law and Rules . The Service Agent assumes no duty to fund any such claims at any
time and shall have no obligation to advance fiends for any such payment . The Employer
agrees to maintain all necessary fiends for payment of claims in accordance with the Law
and Rules and to inform the Service Agent of all relevant details with respect to any such
accounts in order for the Service Agent to perform its duties under this Agreement. The
Employer shall add to or increase the amount in any such accounts as needed, and , in any
event, within five (5 ) business days from the Service Agent ' s notice to the Employer to
such effect.
4 . Allocated Claims Expenses . "Allocated Claims Expenses " shall be defined as
expenses arising in connection with the settlement of claims , which shall be defined
as expenses directly allocated to a particular claim to be discharged from the accounts
funded by the Employer specified in paragraph 3 , including, but not limited to :
a . Attorneys ' and legal assistants ' fees for claim and any lawsuits , before and at trial ,
on appeal , or otherwise ;
b . Court and other litigation and settlement expenses , including, without
limitation :
(i) Medical examinations to determine extent of liability;
Expert medical and other testimony;
Laboratory, X-ray and other diagnostic tests ;
(iv) Autopsy, surgical reviews , and other pathology services ;
(v) Physician and related fees and expenses in reading, interpreting, or
performing any of the foregoing tests or services ;
(vi ) Stenographer, process server, and other related trial preparation, trial ,
settlement, and court costs;
(vii) Witnesses fees and expenses before and at trial , deposition, settlement
discussions , or otherwise ; and
C . Fees and expenses for surveillance , private investigators , or otherwise .
d . Fees for the indexing of injured employees .
e . Fees for any work done outside the office, including, but not limited to , field
investigations necessary to determine compensability, liability, Special
Disability Trust Fund or subrogation recoverability, claimant control ,
attendance at mediations , hearings and depositions, attendance at
management meetings , attendance at medical consultations or hearings ,
appraisals , medical management, case management and cost containment .
£ Fees for any field investigation will be $ 105 . 00 per hour, $ 0 . 45 a mile and $ 2 . 00
per color photograph, and administrative expenses . We will bill at these rates all
activities involving handling, controlling, or settling an employer ' s liability on a
claim .
g . Fees for over-night or special mail service for various documents .
h . Fees for examining and reducing hospital and medical bills as appropriate .
i . Photocopying and review of relevant documentation .
5 . Compensation for the Service Agent . For performing its services under this
Agreement, the Service Agent shall be entitled to the following compensation :
a . Fees for workers ' compensation exposures whose dates of loss fall between
January 1 , 2005 and December 31 , 2005 will be a minimum and deposit of
$ 62 , 350 . 00 . We will bill this minimum and deposit in four quarterly installments
of $ 15 , 587 . 50 , with the first payment due upon program inception .
This fee contemplates handling 150 workers ' compensation exposures . If the
number of exposures exceeds 150 , then the fees will be $ 150 . 00 per medical only
exposure and $ 995 . 00 per indemnity exposure .
b . Fees for workers ' compensation exposures whose dates of loss fall between
January 1 , 2006 and September 30 , 2006 will be a minimum and deposit of
$46 , 763 . 50 . We will bill this minimum and deposit in three quarterly installments
of $ 15 , 587 . 50 , with the first payment due upon program inception .
This fee contemplates handling 112 workers ' compensation exposures . If the
number of exposures exceeds 112 , then the fees will be $ 150 . 00 per medical only
exposure and $ 995 . 00 per indemnity exposure .
C . Fees for non -workers ' compensation exposures whose dates of loss fall between
January 1 , 2005 and December 31 , 2005 will be a minimum and deposit of
$ 13 , 400 . 00 . We will bill this minimum and deposit in four quarterly installments
of $ 3 , 350 . 00 , with the first payment due upon program inception .
This fee contemplates handling 22 non-workers ' compensation exposures . If the
number of exposures exceeds 22 , then the fees will be :
General Liability/BI $ 649 . 00/exposure
General Liability/PD $449 . 00/exposure
Law Enforcement/Prof Liab . $ 950 . 00/exposure
Auto Liability/BI $ 649 . 00/exposure
Auto Liability/PD $449 . 00/exposure
Physical Damage $ 295 . 00/exposure
Errors & Omissions $ 950 . 00/exposure
Commercial Property $495 . 00/exposure
d . Fees for non-workers ' compensation exposures whose dates of loss fall between
January 1 , 2006 and September 30 , 2006 will be a minimum and deposit of
$ 10 , 050 . 00 . We will bill this minimum and deposit in three quarterly installments
of $ 3 , 350 . 00 , with the first payment due upon program inception .
This fee contemplates handling 16 non-workers ' compensation exposures . If the
number of exposures exceeds 16 , then the fees will be :
General Liability/BI $ 649 . 00/exposure
General Liability/PD $449 . 00/exposure
Law Enforcement/Prof Liab . $ 950 . 00/exposure
Auto Liability/Bl $ 649 . 00/exposure
Auto Liability/PD $449 . 00/exposure
Physical Damage $ 295 . 00/exposure
Errors & Omissions $ 950 . 00/exposure
Commercial Property $495 . 00/exposure
e . The Service Agent will assume the "tail " claims at a rate of $400 . 00 per lost time
and medical only claims . The non-workers ' compensation claims will be billed at
50 % of the amounts listed above .
f. The Arthur J . Gallagher administration fee will be $ 5 , 000 . 00 covering January 1 ,
2005 — December 31 , 2005 . The administration fee for January 1 , 2005 —
September 30 , 2006 will be $ 3 , 750 . 00 .
g . Costs for converting data from the present claims administrator's computer system
to the Service Agent ' s system will be $ 5 , 000 . 00 per conversion . This assumes the
present service provider will supply data by tape or diskette . If there is any charge
from the current administrator, the Employer will pay the fee . This is a one -time
fee for each data conversion .
h . Allocated expenses are costs associated with the investigation and/or adjustment of
a claim . The Service Agent will charge allocated expenses to the claim file . Fees
for any field investigation will be $ 105 . 00 per hour, $ 0 . 45 a mile and $2 . 00 per
color photograph . The Service Agent will bill at these rates all activities involving
handling, controlling, or settling an employer's liability on a claim. Fees for
services in performing outside investigations and inspections on commercial
property losses will be billed at the current property rate schedule .
i . The Service Agent will handle all claims received whose date of loss is within the
terms of this proposal and contract. If and when the contract is terminated, we will
handle the claims for a period of ninety (90) days thereafter at no additional
charge . If the Employer wishes the claims to be handled beyond this point, fees
will be negotiated at that time .
j . The Service Agent will provide Medical Management Services consisting of
administrative services including the following items :
• Triage of all cases
• Assistance with developing preferred medical providers
• Education and training of providers and/or supervisory staff
• Educational referral material
• Review of impairment rating for accuracy by nurse case manager to
achieve potential savings
In addition , telephonic case management will be provided on all cases . Fees for
these services will be $ 525 . 00 per lost time exposure and $ 125 . 00 per medical only
exposure .
k. The Service Agent will provide Risk Management Information Services at the
following rates under the Gold Plan :
a . Standard Reports are included
b . NOI over the Internet is included
c . Florida State Reporting — Claim; DWC4, DWC12 is included
d . Florida State Reporting - Underwriting; BSI- 17 , BSI-20 is included
e . 1099 ' s will be filed annually using the Service Agent ' s Federal ID#
f. Internet Access is included up to 6 users . $ 50 . 00 per month each additional
address .
g. Training at our site (Internet & Looking Glass) will be $ 1 , 250 . 00 per day .
h . Standard reports via paper will be $ 100 . 00 per report, per printing . Includes 3
copies of report .
i . Specialty reports via paper will be $ 125 . 00 per report, per printing. Includes 3
copies of report .
j . Specialty reports via email will be $ 100 . 00 per month ; per set or $ 900 . 00 per
year, per set .
k. NOI for Internal Incident Reporting will be $ 15 . 00 per NOI.
1 . Programming of Special Reports is $ 125 . 00 per hour. Minimum 1 hour.
Includes data sharing and spreadsheet preparation . Employer agrees to total
hours per report prior to work completion .
in . Maintenance of Special Reports is $ 125 . 00 per hour . Minimum of 0 . 5 hours .
n . Looking Glass (one CD-ROM) will be provided semi -annually at no charge .
o . Training at client site (Internet & Looking Glass) will be $ 1 , 250 . 00 per day,
plus travel and expenses .
p . Personnel loaded into our database will be a $ 1 , 000 . 00 one time charge .
1 . Provider Bill Review/Cost Containment Services will be $ 5 . 95 per bill and 30 % of
savings over and above fee schedule savings .
in . Handling of property claims during a catastrophe will be billed based upon the
attached catastrophe schedule through 12/31 /05 . The schedule in effect at the time
of the catastrophe will apply after 12/31 /05 .
6 . Continuing Handling of Claims After Termination of Contract or Legally
Imposed Mandates . Upon termination of this Agreement as set forth in paragraph 8 , the
Service Agent agrees to continue handling all claims that have been made and reported to it
prior to such date of termination for ninety (90) days unless the parties have agreed
otherwise in writing .
Upon repeal of any service mandated by the workers ' compensation law and/or other
applicable statutes and/or regulations , the Service Agent agrees to continue handling all
claims under the repealed service that have been reported to it prior to the date of such
repeal for ninety (90 ) days unless the parties have agreed otherwise in writing .
Upon exiting, client data will be provided to the new TPA either by a series of attachments
to one or more email messages containing zip files which can be password -protected or via
CD ROMS . The claim files may exist as paper files and will be shipped as such . If the
claim files are stored as images in a document retrieval system , they will be provided via
CD ROM or the most current means of providing data . The cost for this will be no greater
than $ 2 , 000 . 00 . The Employer will be billed for any additional programming to help in
data transfer.
7 . Excess Reporting Obligation . Unless otherwise specified in this contract, Service Agent
agrees that reporting claims to excess insurance carrier is the Service Agent ' s
responsibility . It is the responsibility of the Employer to provide accurate coverage
information regarding any insurance policies insuring claims covered by this contract. The
information for all claim years that the Service Agent is handling will be made available to
the Service Agent within 90 days of contract inception . New insurance information on
renewal years will be made within 90 days of renewal date . Excess information will
include name and claims reporting address and phone number of all carriers , policy
number, effective dates , limits of liability, deductibles , specific retentions and loss funds .
Actual policies will be provided . This information is required for each claim year that the
Service Agent is handling for the employer. If this information is not made available as
outlined in this paragraph , Service Agent will not be responsible for any penalties , interest,
or reductions in excess recoveries because of late reporting .
8 . Disputes Subject to Mediation . Any dispute or claim arising out of or relating to
this Agreement or any breach thereof shall be resolved by submission of such dispute or
claim to a certified civil mediation. Venue shall lie in Indian River County .
9 . Termination . This Agreement may be terminated by either the Employer or the
Service Agent by giving prior written notice of ninety (90) days . In the event of such
termination , compensation paid or payable to Service Agent under paragraph 5 shall be
prorated as appropriate . Notwithstanding anything in this paragraph 8 to the contrary, the
insolvency or filing for relief from creditors of any party pursuant to the United States
Bankruptcy Code or the material breach of a material provision of this Agreement by any
party shall permit the other party to cancel this Agreement immediately upon written
notice .
10 . Covenants of the Service Agent and the Employer . Each of the Service Agent and the
Employer agrees to use its normal and ordinary professional care and diligence
in the performance of its duties under this Agreement and will use its best efforts to
comply at all times with the Law and the Rules .
ll . Indemnification . Each party agrees to indemnify and hold harmless the other and its
directors , officers , employees , stockholders , and agents against any and all claims ,
lawsuits , settlements , judgments , costs , penalties , and expenses , including, without
limitation , attorneys ' and legal assistants ' fees before and at trial , on appeal , or otherwise,
resulting from the breach of, or negligence or misconduct in performing, any provision of
this Agreement, by such party or by its directors , officers , employees , stockholders or
agents , whether acting alone or in collusion with others to the extent allowed by law .
12 . Miscellaneous .
a . Each party represents and warrants that it has full power and authority to
enter into this Agreement.
b . All notices , requests, demands and other communications which are required or
may be given under this Agreement shall be in writing and shall be deemed to have
been duly given when received if personally delivered ; when transmitted if
transmitted by telecopy, electronic telephone line facsimile transmission , or other
similar electronic or digital transmission method; the day after it is sent, if sent by
recognized expedited delivery service ; and five (5 ) days after it is sent, if mailed ,
certified or registered mail , return receipt requested , postage prepaid . In each case ,
notice shall be sent to :
If to the Employer : Indian River County Board of County Commissioners
1840 25 ` ' Street
Vero Beach, FL 32960
If to the Service Agent : Johns Eastern Company, Inc .
Post Office Box 4175
Sarasota, FL 34230
or to such other address as either party may have specified in writing to the
other using the procedures specified above in this paragraph .
C . (i) This Agreement shall be construed pursuant to and governed
by the substantive laws of the State of Florida (and any
provision of Florida law shall not apply if the law of a
state or jurisdiction other than Florida would otherwise apply) .
The headings of the various paragraphs in this Agreement are inserted for
the convenience of the parties and shall not affect the meaning,
construction, or interpretation of this Agreement.
Any provision of this Agreement which is determined by a court of
competent jurisdiction to be prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction , be
ineffective to the extent of such prohibition, unenforceability or non -
authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction . In any such case , such determination shall not affect
any other provision of this Agreement, and the remaining
provisions of this Agreement shall remain in full force and effect . If
any provision or term of this Agreement is susceptible to two or more
constructions or interpretations , one or more of which would render the
provision or term void or unenforceable, the parties agree that a
construction or interpretation which renders the term or provision valid
shall be favored .
d . This Agreement constitutes the entire Agreement, and supersedes all prior
agreements and understandings , oral and written among the parties to this
Agreement with respect to the subject matter hereof.
e . (i) If, within ten ( 10) days after demand to comply with the obligations
of one of the parties to this Agreement served in writing on the other,
compliance or reasonable assurance of compliance is not forthcoming, and
the other party takes steps to enforce rights under this Agreement pursuant
to paragraph 7 or otherwise, the prevailing party in any action shall be
entitled to recover all reasonable costs and expenses (including reasonable
attorneys ' and legal assistants ' fees before and at trial , on appeal , or
otherwise . )
(ii ) If any monies shall be due either of the parties to this Agreement
hereunder and shall not be paid within thirty (30) days from the due
date of such payment, interest shall accrue on such unpaid amount at
the rate of 1 % per month in accordance with the Florida Prompt
Payment Act - F . S . 218 . 70-79 .
f. This Agreement shall be binding upon and inure to the benefit of the
successors in interest and assigns of the parties .
g . The parties to this Agreement will execute and deliver, or cause to be
executed and delivered, such additional or further documents , agreements, or
instruments and shall cooperate with one another in all respects for the
purpose of carrying out the transactions contemplated by this Agreement .
h . This Agreement may be executed in any number of counterparts , each of
which shall be considered an original , but all of which together shall
constitute one and the same instrument and shall become effective when each of
the parties has executed at least one of the counterparts even if all the parties have
not executed the same counterpart .
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IN WITNESS WHEREOF , the parties have executed this Agreement effective for all
purposes as of January 1 , 2005 .
WITNESSES : INDIAN RIVER COUNTY BOARD
OF COUNTY COMMISSIONERS
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3 JOHNS EASTERN COMPANY, INC . Insurance adjusters
SPECIAL ACCOUNT SERVICES P . O . Box 3318 * Sarasota FL 34230
Tel : ( 941 ) 907 - 3100 * FAX : ( 941 ) 907 - 7226 * TOLL FREE 1 - 800 - 749 - 3044
CATASTROPHE FEE SCHEDULE
Full Repair Cost Service Fee
$ 0 . 01 - $ 2 , 500 . 00 $ 387
2 , 500 . 01 - 5 , 000 . 00 485 . 00
5 , 000 . 01 — 7, 500 . 00 572 . 00
7 , 500 . 01 — 10 , 000 . 00 681 . 00
10 , 000 . 01 - 15 , 000 . 00 864 . 00
15 , 000 . 01 — 20 , 000 . 00 1 , 012 . 00
20 , 000 . 01 — 25 , 000 . 00 4 . 5 % of Loss - $ 1 , 025 minimum
25 , 000 . 01 — 35 , 000 . 00 4% of Loss - $ 1 , 200 minimum
35 , 000 . 01 — 50 , 000 . 00 3 . 5 % of Loss - $ 1 , 400 minimum
50 , 000 . 01 — 100 , 000 . 00 3 % of Loss - $ 1 , 750 minimum
Over 1oo , 000 . 00 2 % of Loss — $ , 000 minimum
1 . Full Repair Cost — Agreed cost to repair or replace before applying depreciation ,
deductible , or other clauses limiting coverage .
2 . In addition to the schedule , the following charges will be made :
a . All miles driven at $ 0 . 45 per mile .
b . Photos - $ 2 . 00 each
c . Outside fees , reports , telephone , and other direct expense , at cost .
d . Administrative/ Set up fee - $ 35 . 00
e . Drive time charged ( prorated when possible) when loss is more than 20 miles
from our base of operation .
Date : 5 - 23 - 03