PROFESSIONAL SERVICES AGREEMENT
WITH GEORGE HILLS COMPANY, INC. FOR
THIRD PARTY GENERAL LIABILITY CLAIMS AND ADMINISTRATION
SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and entered intoas of this26th day of May, 2026 ("EffectiveDate"),by and between the CITY OF NEWPORT BEACH, a Californiamunicipal corporation and chartercity("City"),and GEORGE HILLS COMPANY, INC., a California corporation ("Consultant"),whose address is 6020 West Oaks Boulevard, Suite 100, Rocklin, CA 95765, and is made with reference to the following:
RECITALS
A. City isa municipal corporationduly organized and validlyexistingunder the laws of the State of Californiawith the power to carry on itsbusiness as itisnow being conducted under the statutes of the State of California and the Charter of City.
B. Citydesires to engage Consultant to provide thirdpartygeneral liabilityclaims and administrationservices ("Project").
C. Consultant possesses the skill,experience, ability,background, certificationand knowledge to providethe professional servicesdescribed inthisAgreement.
D. City has solicitedand received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant,and desires to retainConsultant to render professionalservices under the terms and conditions set forthinthisAgreement.
NOW, THEREFORE, itismutuallyagreed by and between the undersigned parties as follows:
1. TERM
The term of thisAgreement shallcommence on the EffectiveDate, and shall terminateon May 25, 2031, unless terminatedearlieras set forthherein.
2. SERVICES TO BE PERFORMED
Consultant shall diligentlyperform allthe services described in the Scope of Services attached hereto as ExhibitA and incorporated herein by reference ("Scope of Services" or "Services").City may electto delete certainServices withinthe Scope of Services at its sole discretion.
3. CITY RESPONSIBILITY
City agrees that itshall:
3.1 Collaborate with Consultant as reasonably necessary forConsultant to perform itsservices including establishing,drafting,and agreeing to a complete set of Claim Handling Instructionswhich providedirectionand guidance relatedto the services.
Attachment A
3.2 Maintain a Citytrustaccount to pay indemnity and expenses thatmay be due on claims. The amount to be maintained in the trust account shallbe determined by City.
3.3 Provide directionto Consultant as requested regarding particularproject requirements.
3.4 Communicate any changes in expectations and/or in the event Consultant is not performing in an acceptable manner so Consultant can immediately address such changes and/or performance issues.
3.5 Be responsible for reportingto Consultant allBodily InjuryClaims in addition to allother items noted in the "Medicare, Medicaid, and SCHIP Extension Act of 2007" (MMSEA), attached hereto as ExhibitB and incorporatedherein by thisreference.
3.6 Be responsible for updating Consultant on any changes to coverage/policy language; includinglimits,retentions/deductiblesand coverage changes before the start of each policyterm.
3.7 Obtain any necessary consent in the collectionof any City data that is transmittedto a thirdparty(i.e.,lawyer,actuary,or auditor).Cityshallprovide Consultant with reasonable assurances that ithas the necessary consent to transmit City data to a third party.City acknowledges that the claims data may contain confidentialand/or protected health information("PHI").
4. CONSULTANT ACKNOWLEDGEMENT OF CIPA
4.1 The Consultant acknowledges that the City is a member of the California Insurance Pool Authority ("CIPA") and shall be subject to the Minimum Performance Standards for LiabilityClaims Administration Policy ("Policy")attached hereto as Exhibit C and incorporated herein by thisreference.This requirement appliesto the Policy,or as subsequently amended or replaced by the City'sthen currentexcess JPA/Carrier.
4.2 By executing this Agreement, the Consultant provides its formal acknowledgment of the Policyand agrees to conduct allclaims administrationservices in strictcompliance with the Minimum Performance Standards established by CIPA. The Consultant understands and agrees that allclaims managed under thisAgreement will be audited by CIPA, or itsauthorized representative,to ensure conformance with the Policy.
5. TIME OF PERFORMANCE
5.1 Time isof the essence inthe performance of Services under thisAgreement and Consultant shall perform the Services in accordance with the schedule included in Exhibit A. In the absence of a specificschedule, the Services shall be performed to completion ina diligentand timelymanner. The failureby Consultant to strictlyadhere to the schedule set forthin ExhibitA, ifany, or perform the Services ina diligentand timely manner may resultinterminationof thisAgreement by City.
5.2 Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control.However, inthe case of any such delay in the Services to be provided forthe Project,each party hereby agrees GEORGE HILLS COMPANY, INC. Page 2
to provide noticewithintwo (2)calendar days of the occurrence causing the delay to the other partyso thatalldelays can be addressed.
5.3 Consultant shallsubmit allrequests forextensions of time forperformance inwritingto the ProjectAdministratoras defined herein not laterthan ten (10) calendar days afterthe startof the condition that purportedly causes a delay. The Project Administrator shall review allsuch requests and may grant reasonable time extensions forunforeseeable delays thatare beyond Consultant'scontrol.
5.4 For all time periods not specificallyset forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by hand-delivery or mail.
6. COMPENSATION TO CONSULTANT
6.1 City shallpay Consultant for the Services on a time and expense not-to- exceed basis inaccordance with the provisionsof thisSection and the Schedule of Billing Rates attached hereto as Exhibit D and incorporated herein by reference. Consultant's compensation for allWork performed in accordance with thisAgreement, includingall reimbursable items and subconsultant fees, shall not exceed Seven Hundred Eighty Four Thousand Twenty Five Dollars and 00/100 ($784,025.00),without priorwritten authorizationfrom City. No billingrate changes shallbe made during the term of this Agreement withoutthe priorwrittenapproval of City.
6.2 Consultant shall be reimbursed at actual cost for the allocated expenses detailedinExhibitE, which isincorporateherein by reference,provided thatallsuch costs are approved inwritingby the City priorto being incurred.
6.3 Consultant shall submit monthly invoices to City describing the Work performed the preceding month. Consultant's billsshallinclude the name of the person who performed the Work, a briefdescriptionofthe Services performed and/or the specific task inthe Scope of Services to which itrelates,the date the Services were performed, the number of hours spent on allWork billedon an hourly basis,and a descriptionof any reimbursable expenditures. City shallpay Consultant no laterthan thirty(30) calendar days afterapproval of the monthly invoice by City staff.
6.4 Consultant shallnot receive any compensation for Extra Work performed without the priorwrittenauthorizationof City. As used herein,"ExtraWork" means any Work thatisdetermined by Cityto be necessary forthe 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.
Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of BillingRates as set forthin ExhibitD.
7. PROJECT MANAGER
7.1 Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This ProjectManager shallbe availableto City at allreasonable times during the Agreement term. Consultant has designated Todd Mershon or designee to be itsProjectManager. Consultant shallnot remove or reassignthe ProjectManager GEORGE HILLS COMPANY, INC. Page 3
or any personnel listedin ExhibitA or assign any new or replacement personnelto the Projectwithoutthe priorwrittenconsent of City.City'sapprovalshallnotbe unreasonably withheld with respect to the removal or assignment of non-key personnel.
7.2 Consultant, at the sole discretionof City,shallremove from the Projectany of itspersonnel assigned to the performance of Services upon writtenrequest of City.
Consultant warrants thatitwillcontinuouslyfurnishthe necessary personnel to complete the Projecton a timelybasis as contemplated by thisAgreement.
7.3 IfConsultant isperforming inspectionservices forCity,the ProjectManager and any otherassigned staffshallbe equipped with a cellularphone to communicate with Citystaff.The ProjectManager's cellularphone number shallbe providedto City.
8. ADMINISTRATION
This Agreement willbe administered by the City Attorney's Office.The City Attorney or theirdesignee shallbe the ProjectAdministratorand shallhave the authority to actforCityunder thisAgreement. The ProjectAdministratorshallrepresentCityinall matters pertainingto the Services to be rendered pursuant to thisAgreement.
9. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of itsresponsibilitiesunder thisAgreement, Cityagrees to provideaccess to and upon request of Consultant,one copy ofallexisting relevantinformationon fileat City. Citywillprovide allsuch materialsina timelymanner so as not to cause delays in Consultant's Work schedule.
10. STANDARD OF CARE
10.1 Allof the Services shallbe performed by Consultant or under Consultant's supervision. Consultant represents that itpossesses the professional and technical personnel required to perform the Services required by thisAgreement, and that itwill perform allServices ina manner commensurate with community professionalstandards and with the ordinary degree of skilland care that would be used by other reasonably competent practitionersof the same disciplineunder similarcircumstances. AllServices shallbe performed by qualifiedand experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifiesthat the Work conforms to the requirements of thisAgreement, allapplicablefederal,stateand locallaws, and legally recognized professionalstandards.
10.2 Consultant represents and warrants to Citythatithas, shallobtain,and shall keep in fullforce and effectduring the term hereof, at itssole cost and expense, all licenses,permits, qualifications,insurance and approvals of whatsoever nature that is legallyrequiredof Consultant to practiceitsprofession. Consultant shallmaintain a City of Newport Beach business licenseduring the term of thisAgreement.
10.3 Consultant shall not be responsible for delay, nor shall Consultant be responsiblefordamages or be indefaultor deemed to be indefaultby reason of strikes, lockouts, accidents, acts of God, or the failureof City to furnishtimely informationor to GEORGE HILLS COMPANY, INC. Page 4
approve or disapprove Consultant'sWork promptly,or delay or faultyperformance by City,contractors,or governmental agencies.
11. HOLD HARMLESS
11.1 To the fullestextent permitted by law, Consultant shallindemnify,defend and hold harmless City, itsCity Council, boards and commissions, officers,agents, volunteers and employees (collectively,the "IndemnifiedParties")from and against any and allclaims (including,without limitation,claims forbodilyinjury,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 arisefrom or inany manner relate (directlyor indirectly)to any breach of the terms and conditionsof thisAgreement, any Work performed or Services provided under thisAgreement including,without limitation, defects in workmanship or materials or Consultant's presence or activitiesconducted on the Project(includingthe negligent,reckless,and/or willfulacts,errorsand/or omissions of Consultant, itsprincipals,officers,agents, employees, vendors, suppliers,consultants, subcontractors,anyone employed directlyor indirectlyby any of them or forwhose acts they may be liable,or any or allof them), and/or ifitissubsequently determined that an employee of Consultant isnot an independent contractor.
11.2 Notwithstanding the foregoing,nothing herein shallbe construed to require Consultant to indemnify the Indemnified Parties from any Claim arisingfrom the sole negligence or willfulmisconduct ofthe IndemnifiedParties.Nothing inthisindemnity shall be construed as authorizingany 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 policiesare applicable.The policylimitsdo not act as a limitationupon the amount of indemnificationto be provided by Consultant.
12. INDEPENDENT CONTRACTOR
12.1 Itis understood that City retainsConsultant 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 controlof Consultant, except to the extent they are limitedby statute,ruleor regulationand the expressed terms of thisAgreement. No civil service statusor other rightof employment shallaccrue to Consultant or itsemployees.
Nothing inthisAgreement shallbe deemed to constituteapproval forConsultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibilityfor and control over the means of performing the Work, provided that Consultant isin compliance with the terms of thisAgreement. Anything in thisAgreement that may appear to give Citythe rightto directConsultant as to the details of the performance of the Work or to exercise a measure of controlover Consultant shall mean only thatConsultant shallfollowthe desires of Citywith respect to the resultsof the Services.
12.2 During the period of this Agreement, and for a period of one (1) year thereafter,Consultant agrees not to solicitforemployment any City employee contacted during the performance of thisAgreement. During the period of thisAgreement, and for GEORGE HILLS COMPANY, INC. Page 5
a period of one (1) year thereafter,City agrees not to solicitforemployment, or employ eitherdirectlyor by contract,any employee of Consultant contacted by the Cityduringthe performance of thisAgreement. Inthe event thatCitysolicitsan employee of Consultant who performed services on behalf of City pursuant to the Agreement, Cityagrees to pay a fee equal to one year of the employee's salary.
13. COOPERATION
Consultant agrees to work closely and cooperate fullywith City'sdesignated ProjectAdministratorand any other agencies that may have jurisdictionor interestinthe Work to be performed. City agrees to cooperate with the Consultant on the Project.
14. CITY POLICY
Consultant shall discuss and review all matters relatingto policy and Project directionwith City'sProjectAdministratorinadvance of allcriticaldecision pointsinorder to ensure the Projectproceeds ina manner consistentwith Citygoals and policies.
15. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a regular basis regarding the status and progress of the Project,activitiesperformed and planned, and any meetings thathave been scheduled or are desired.
16. INSURANCE
Without limitingConsultant's indemnificationof City,and priorto commencement of Work, Consultant shallobtain,provide and maintain at itsown expense during the term ofthisAgreement or forother periods as specifiedinthisAgreement, policiesof insurance of the type, amounts, terms and conditions described in the Insurance Requirements attached hereto as ExhibitF, and incorporated herein by reference.
17. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specificallyauthorized under this Agreement, the Services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the priorwrittenapproval of City. Any of the followingshallbe construed as an assignment: The sale,assignment, transferor other dispositionof any of the issued and outstanding capitalstock of Consultant, or of the interestof any general partneror jointventurer or syndicate member or cotenant ifConsultant isa partnershipor joint-ventureor syndicate or co-tenancy, which shall resultin changing the control of Consultant. Control means fiftypercent (50%) or more of the votingpower or twenty-five percent (25%) or more of the assets of the corporation,partnershipor joint-venture.
18. SUBCONTRACTING
The subcontractors authorized by City,ifany, to perform Work on thisProjectare identifiedin Exhibit A. Consultant shall be fullyresponsible to City for allacts and omissions of any subcontractor. Nothing in thisAgreement shallcreate any contractual relationshipbetween City and any subcontractor nor shallitcreate any obligationon the GEORGE HILLS COMPANY, INC. Page 6
partof Cityto 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 beneficiaryof any Work performed by the subcontractorforpurposes of establishinga duty of care between the subcontractor and City. Except as specificallyauthorized herein, the Services to be provided under thisAgreement shallnot be otherwise assigned, transferred,contracted or subcontracted out withoutthe priorwrittenapproval of City.
19. OWNERSHIP OF DOCUMENTS
19.1 Each and every report,draft,map, record,plan,document and other writing produced, including but not limitedto, websites, blogs, social media accounts and applications(hereinafter"Documents"), prepared or caused to be prepared by Consultant, itsofficers,employees, agents and subcontractors, in the course of implementing this Agreement, shallbecome the exclusivepropertyof City,and Cityshallhave the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Additionally,allmaterial relatingdirectlyand only to the City posted in cyberspace by Consultant, itsofficers,employees, agents and subcontractors, in the course of implementing thisAgreement, shallbecome the exclusivepropertyof City,and City shall have the sole rightto use such materials in itsdiscretionwithout further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents, includingallloginsand password informationto City upon priorwrittenrequest.
19.2 Documents, includingdrawings and specifications,prepared by Consultant pursuant to thisAgreement are not intended or represented to be suitablefor reuse by City or others on any other project.Any use of completed Documents forother projects and any use of incomplete Documents without specific written authorization from Consultant willbe at City'ssole riskand without liabilityto Consultant. Further,any and allliabilityarisingout of changes made to Consultant'sdeliverablesunder thisAgreement by Cityor persons other than Consultant iswaived against Consultant, and Cityassumes fullresponsibilityforsuch changes unless Cityhas given Consultant priornotice and has received from Consultant writtenconsent forsuch changes.
19.3 All written documents shall be transmitted to City informats compatible with Microsoft Office and/or viewable with Adobe Acrobat.
20. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the Services in this Agreement, shallbe kept confidential unless City expressly authorizes inwritingthe release of information.
21. INTELLECTUAL PROPERTY INDEMNITY
Consultant shalldefend and indemnify City,itsagents, officers,representatives and employees against any and allliability,includingcosts,for infringementor alleged infringement by Consultant of any United States'letterspatent,trademark, or copyright, includingcosts,contained in Consultant's Documents provided under thisAgreement.
GEORGE HILLS COMPANY, INC. Page 7
22. RECORDS
Consultant shallkeep records and invoicesin connection with the Services to be performed under thisAgreement. Consultant shallmaintain complete and accurate records with respect to the costs incurred under this Agreement and any Services, expendituresand disbursements charged toCity,fora minimum periodofthree(3)years, or for any longer period required by law, from the date of finalpayment to Consultant under this Agreement. All such records and invoices shall be clearlyidentifiable.
Consultant shallallow a representativeof City to examine, auditand make transcriptsor copies ofsuch recordsand invoicesduring regularbusiness hours. Consultantshallallow inspection of allWork, data, Documents, proceedings and activitiesrelatedto the Agreement fora period of three (3) years from the date of finalpayment to Consultant under thisAgreement.
23. WITHHOLDINGS
After providing notice to Consultant regarding any disputed sums, City may withhold payment to Consultant of any disputed sums untilsatisfactionofthe disputewith respect to such payment. Such withholdingshallnot be deemed to constitutea failureto pay according to the terms of thisAgreement. Consultant shallnot discontinueWork as a resultof such withholding. Consultant shallhave an immediate rightto appeal to the City Manager or designee with respect to such disputed sums. Consultant shallbe entitledto receive intereston any withheld sums at the rateof returnthat Cityearned on itsinvestments during the time period,from the date of withholdingof any amounts found to have been improperly withheld.
24. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which resultinexpense to Citygreaterthan what would have resulted ifthere were not errors or omissions in the Work accomplished by Consultant, the additionaldesign, construction and/or restorationexpense shall be borne by Consultant. Nothing inthisSection isintended to limitCity'srightsunder the law or any other sections of thisAgreement.
25. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
Cityreserves the rightto employ other Consultants inconnection withthe Project.
26. CONFLICTS OF INTEREST
26.1 Consultant or its employees may be subject to the provisions of the CaliforniaPoliticalReform Act of 1974 (the "Act")and/or Government Code §§ 1090 et seq., which (1) require such persons to disclose any financialinterestthat may foreseeably be materiallyaffectedby the Work performed under thisAgreement, and (2) prohibitsuch persons from making, or participatingin making, decisions that will foreseeably financiallyaffectsuch interest.
26.2 Ifsubjectto the Act and/or Government Code §§ 1090 et seq.,Consultant shallconform to allrequirements therein. Failureto do so constitutesa materialbreach GEORGE HILLS COMPANY, INC. Page 8
of thisAgreement by City. Consultant shall
and allclaims for damages resultingfrom
and is grounds for immediate termination
indemnify and hold harmless City for any
Consultant's violation of this Section.
27. NOTICES
27.1 All notices, demands, requests or approvals, including any change in mailingaddress, to be given under the terms of thisAgreement shallbe given inwriting, and conclusivelyshallbe deemed served when delivered personally,or on the third business day afterthe deposit thereof in the United States mail,postage prepaid,first- class mail,addressed as hereinafterprovided.
27.2 All notices,demands, requests or approvals from Consultant to City shall be addressed to City at:
Attn:CityAttorney
CityAttorney'sOffice
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
27.3 All notices,demands, requests or approvals from City to Consultant shall be addressed to Consultant at:
Attn: Chris Shaffer
George HillsCompany, Inc.
PO Box 120
Rocklin, CA 95677
28. CLAIMS
Unless a shortertime isspecifiedelsewhere inthisAgreement, before making its finalrequest forpayment under thisAgreement, Consultant shallsubmit to City,inwriting, all claims for compensation under or arising out of this Agreement. Consultant's acceptance of the finalpayment shallconstitutea waiver of allclaims forcompensation under or arising out of this Agreement except those previously made in writingand identifiedby Consultant inwritingas unsettledat the time of itsfinalrequestforpayment.
Consultant and Cityexpressly agree thatinadditionto any claims filingrequirements set forthinthe Agreement, Consultant shallbe requiredtofileany claim Consultant may have against City in strictconformance with the Government Claims Act (Government Code sections 900 et seq.).
29. TERMINATION
29.1 Inthe event thateitherpartyfailsor refuses to perform any ofthe provisions of thisAgreement at the time and inthe manner required,thatpartyshallbe deemed in defaultinthe performance of thisAgreement. Ifsuch defaultisnot cured withina period of two (2)calendar days, or ifmore than two (2)calendar days are reasonably required to cure the default and the defaulting party failsto give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, GEORGE HILLS COMPANY, INC. Page 9
specifyingthe nature of such defaultand the steps necessary to cure such default,and thereafterdiligentlytake steps to cure the default,the non-defaultingpartymay terminate the Agreement forthwithby givingto the defaultingpartywrittennoticethereof.
29.2 Notwithstanding the above provisions,City shallhave the right,at itssole and absolute discretionand without cause, of terminatingthisAgreement at any time by giving no less than thirty(30) calendar days' priorwrittennoticeto Consultant. In the event of termination under this Section, City shall pay Consultant for Services satisfactorilyperformed and costs incurredup to the effectivedate ofterminationforwhich Consultant has not been previouslypaid. On the effectivedate of termination,Consultant shall deliver to City all reports, Documents and other information developed or accumulated inthe performance of thisAgreement, whether indraftor finalform.
29.3 Upon the earlierof a notice of termination or the actual terminationof this Agreement for any reason, Consultant shall,at no cost to City,promptly provide all historicalclaim data, files,and related information to Cityor itsdesignee but not laterthan fifteen(15) calendar days. This deliveryshallincludealldata,transactionalrecords,and updates generated up to and includingthe effectivedate of termination.Such data must be provided in a machine-readable, industry-standardformat (e.g.,.csv,.xlsx,or SQL) thatisimmediately accessible and ready foruse withoutthe need forproprietarysoftware.
Consultant further agrees to provide a comprehensive data dictionaryor schema to ensure the Citycan fullyinterpretand integratethe historicalrecords intoitsown systems or those of a successor administrator.
30. AMENDMENT DUE TO GOVERNMENTAL, POLITICAL, OR LEGISLATIVE
CHANGES
Consultant and Cityagree thatgovernmental, political,or legislativechanges may impact the work of Consultant and Cityon behalf of City members. Consultant reserves the right,forthe benefitof both parties,to requirean amendment to any portion(s)of this Agreement, expressly includingthe compensation, fees, and expenses stated inSection 4, in response to any change to,additionor deletionof any statute,rule,regulation,or policywhich materiallyimpacts the liabilityof publicentitiesin California,damages for which public entitiesmay become responsible, and/or the handling, administration, adjustment, payment, and/or reporting related to services performed under this Agreement.
31. CONTRACTOR NOT A PUBLIC OFFICIAL
Neither Consultant, nor any employee of Consultant, is a "public official"for purposes of Government Code §§ 87200 et seq. Consultant conducts research and arrivesat conclusions, provides advice, recommendation, or counsel independent of the control and directionof the City or any officialof the City,other than normal contract monitoring. In addition,Consultant possesses no authoritywith respect to any City decision beyond these conclusions,advice, recommendation, or counsel.
32. STANDARD PROVISIONS
32.1 Recitals.Cityand Consultant acknowledge thatthe above Recitalsare true and correctand are hereby incorporated by reference intothisAgreement.
GEORGE HILLS COMPANY, INC. Page 10
32.2 Compliance with allLaws. Consultant shall,at itsown cost and expense, comply with allstatutes,ordinances, regulationsand requirements of allgovernmental entities,includingfederal,state,county or municipal,whether now inforceor hereinafter enacted. In addition,allWork prepared by Consultant shallconform to applicableCity, county, stateand federallaws, rules,regulationsand permit requirements and be subject to approval of the ProjectAdministratorand City.
32.3 Waiver. A waiver by eitherparty 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 conditioncontained herein,whether of the same or a different character.
32.4 Integrated Contract. This Agreement represents the fulland complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminarynegotiationsand agreements ofwhatsoever kindor nature are merged herein.
No verbal agreement or implied covenant shallbe held to vary the provisions herein.
32.5 Conflicts or Inconsistencies. In the event there are any conflictsor inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto,the terms of thisAgreement shallgovern.
32.6 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 eitherparty by reason of the authorship of the Agreement or any other rule of constructionwhich might otherwise apply.
32.7 Amendments. This Agreement may be modified or amended only by a writtendocument executed by both Consultant and City and approved as to form by the CityAttorney.
32.8 Severability.Ifany term or portionof thisAgreement is held to be invalid, illegal,or otherwise unenforceable by a court of competent jurisdiction,the remaining provisionsof thisAgreement shallcontinue infullforce and effect.
32.9 Controlling Law and Venue. The laws of the State of Californiashallgovern this Agreement and allmatters relatingto itand any action brought relatingto this Agreement shall be adjudicated in a court of competent jurisdictionin the County of Orange, State of California.
32.10 Equal Opportunity Employment. Consultant represents that itis an equal opportunity employer and itshallnot discriminateagainst any subcontractor, employee or applicant for employment because race, religiouscreed, color, national origin, ancestry, physical handicap, medical condition,maritalstatus,sex, sexual orientation, age or any other impermissible basis under law.
32.11 No Attorneys'Fees. Inthe event of any dispute or legalaction arisingunder thisAgreement, the prevailingparty shallnot be entitledto attorneys'fees.
GEORGE HILLS COMPANY, INC. Page 11
32.12 Counterparts. This Agreement may be executed in two (2) or more counterparts,each of which shallbe deemed an originaland allof which together shall constituteone (1)and the same instrument.
[SIGNATURES ON NEXT PAGE]
GEORGE HILLS COMPANY, INC. Page 12
IN WITNESS WHEREOF, the partieshave caused thisAgreement to be executed on the dates written below.
CITY OF NEWPORT BEACH,
a Californiamunicipal corporation
Date:
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By.\,
Aron C. Harp r 1-
CityAttorney
By:
Lauren Kleiman
Mayor
CONSULTANT: GEORGE HILLS
COMPANY, INC., a California
corporation
ATTEST:
Date:
By: Date:
Lena Shumway
City Clerk
By
Lowell Hays
Chief Executive Officer
Date:
By:
Ron Shah
Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
- Scope of Services
- Medicare, Medicaid, and Schip Extension Act of 2007
- CaliforniaInsurance Pool Authority("CIPA")
- Schedule of BillingRates
- Allocated Expenses
- Insurance Requirements
GEORGE HILLS COMPANY, INC. Page 13
EXHIBIT A
SCOPE OF SERVICES
SCOPE OF SERVICES AND CLIENT EXPRESSED AUTHORITY AND
LIMITATIONS UNDER THE AGREEMENT
This ExhibitA provides the Scope of Services referenced in Section 2 of the Agreement and also the specificservice expectations inthe Agreement, thatwould not otherwise requirerevisionduring the term of the Agreement, and which may differfrom, or elaborate upon, the Client Service Profile.
Services to be provided by Consultant on behalf of City may include some or allof the following.
I. SERVICES INCLUDED IN THE AGREEMENT
A. General Administrative Services
Throughout each year Consultant performs numerous functions which support claims administrationon behalf of the City,other than claims handling, and are performed by non-claims personnel. Additionally,inthe firstyear of thisAgreement there are several "on-boarding" services that are general and administrativein nature. Below isa listof such services which are included withinthe terms of the Agreement:
1) Claims Management InformationSystem ("CMIS") Services and Reports A. Access to CMIS and training.
B. A monthly listingof open claims, showing expense categories, reserves, and total incurred.
C. Monthly claim summary reports.
D. Monthly hours and claims data detailforbilling.
E. Providing loss run data and required reports.
F. Access to GH Client Portal.
2) Providing annual reportsto outside agencies.
3) Filingof regulatoryreports(such as 1099, W-9, etc.
A. Administer and maintain the City'
and expenses that may be due
(FinancialAccounting).
s designated trustaccount to pay indemnity
on claims as provided below in Section
B. Investigative Services
1) George Hillswillconduct allinvestigations.
2) Retention of vendors (appraisers, translators, copy services, Independent Adjuster,IME's, Surveillance,etc.)shallbe preauthorized by the City. 3) Receipt and examination of allreports of accidents or incidentsthat are or may be the subject of claims.
4) Investigation of accidents or incidents as warranted, to include on-site investigation,photographs, witness interviews,determination of losses and other such investigativeservices necessary to determine allCitylosses but not to include extraordinary investigativeservices outside the expertise of GH.
GEORGE HILLS COMPANY, INC. Page A-1
5) In the event City or other agency conducts any investigation,and upon Client's request, GH shall review and analyze for liabilityand/or damage issues and for possibleadditionalfollow-upinvestigation.
6) Maintain service on a 24-hour, 7 days per week basis, to receive reports of any incident or accident which may be the subject of a liabilityclaim and provide immediate investigativeservices to the extent necessary to provide a complete investigation.
7) Undertake items of investigationrequiringspecialhandling forCity at the direction of the ProjectAdministrator.
C. Liabilityand Claim Handling Services
1) Contractor shallensure alltortclaims are handled in strictconformance with CIPA Policy standards and timelines.
2) Within twenty-four (24) hours, set up a claim fileupon receiptof the claim and maintain a claim fileon each potentialor actual claim reported. 3) Assess and evaluate the nature and extent of each claim and establish claims reserves forindemnity and legalexpense.
4) GH willfollowany City policyregarding tortclaim rejectioninstructions,including rejectionand returnof an untimely or insufficientclaim. 5) Ensure timely tortclaim handling,includingcontact and follow-up with claimants regarding claim issues and processing.
6) Any bodily injuryclaim and property damage claim that isbeing pursued shallbe indexed. Notice only matters or precautionary bodily injuryclaims that are not pursued do not need to be indexed.
7) Determine the need for defense representation.All litigationshallbe handled by eitherCity in-house legalcounsel or outside legalcounsel selected by the City. 8) Report claims to the excess insurerin compliance with excess carrier'sreporting requirements and CIPA Policyand coordinate with the excess insureron a claim's progress inaccordance with the excess insurer'sreportingrequirements. 9) Maintain records on any such claim and notifyCity when City isabout to exhaust the Self-Insured Retention.
10)Obtain settlement contracts and releases upon settlement of claims or potential claims not in litigation.
11 )Perform periodicreviews, as needed, of City filesand claims as well as statutory requirements to ensure compliance including excess insurance related requirements.
12)Perform the necessary data gathering for the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) and the Set Aside Contracts in compliance with Section 111 of the MMSEA includingthe required reporting.(See ExhibitB.) 13)To the extent there is privilegedinformation or PHI shared between agencies, which is subject to protection under HIPAA, GH shall implement allnecessary measures in compliance with the Act and willexecute a Business Associates Agreement (BAA).
GEORGE HILLS COMPANY, INC. Page A-2
D. LitigationSupport Services
1) Upon notificationby the Citythat litigationhas been filednaming Cityor any of its members, GH shall follow the instructions outlined inthe ClientExpressed Scope of Work Instructionsform. GH willwork collaborativelywith City to post alllegal payments and expenses and to ensure that allfinancialactivitiesrelated to the case are recorded in the system for inclusionon a formal loss run which will be provided to the City.
2) Citywillhandle litigatedclaims inhouse, with GH to capture data intoSIMS. 3) The CMIS operated by GH willserve as the repositoryfor the City'slegal file pertainingto the litigation.
4) Consultantwillcollaboratewiththe Cityto ensure thatthere isa process such that the filecontents includethe followingdocuments and information:
• Operative Summons and Complaint;
• Case evaluations from defense counsel;
• A summary or copy of any discovery motions;
• Summary of discovery effortsand evidence obtained;
• Expert Witness Reports and summary of expected testimony; • A summary or copy of dispositivemotions;
• Mediation or settlement conference statements of allparties; • Settlement demands or offersfrom any party;
• A copy of any Judgment, arbitrationaward, or Jury verdict; • Any Court order of significanceto liabilityinthe case; and • Appellate documents includingopen and responsive briefsand opinions or decisions issued by the Court.
E. LitigationManagement and Support Services
1) Claims Processors, Adjusters and/or Supervisors will perform the following services inrelationto litigated,or to-be-litigated,claims:
• Upon notificationby the Citythat litigationhas been filedon an open claim, Consultant shallfollowthe litigationreferralprocess as outlinedinthe Client Expressed Scope of Work Instructionsform.
• Work cooperatively with City in choosing outside counsel and assist defense counsel inon-going litigationdefense efforts.
• Obtain and maintain a LitigationPlan and Budget.
• Review legalbillsinconnection with LitigationPlan and Budget. • Review, evaluate and adjustdefense counsel invoicesfor legalservices in cooperation with the City.
• Cooperate with and assistdefense counsel assigned to litigationof open claims and provide such investigativeservices as directedduring pre-trial and trialstages.
• Assist inresponding to discovery or preparing discovery. • At the request of the City,attend mandatory settlement conferences on behalf of City.
GEORGE HILLS COMPANY, INC. Page A-3
Where authorized by the City,appear on behalf of City in small claims actionsfiledagainst City.
Review and evaluate case evaluations,correspondence and status reportsforwarded to Consultant by counsel. Regularlydiscuss,review, and directinvestigation,discovery,and case strategywith counsel.
Cooperate with counsel and litigationmanager as a team with an open communication approach on each case to obtain the most economical and best resultforthe City.
2) LitigationManagers shallperform the followingservices:
A. For designated claims identifiedas having a complex nature or potential high levelof exposure, includingcoverage issues:
• Review to determine proper handling throughout the lifeof the claim and/or litigation.
• Assess excess coverage reportingrequirements and potential issues relatedto coverage and advise Consultant personnel of the need for reporting.
• Identifythe need forevidence preservationincludingscope and duration.
• Assess need forearlyinterventionby and assignment to defense counsel where appropriate.
• Assess need forearlyretentionand evaluationby expert witnesses. • Review case evaluations,correspondence and status reports forwarded by defense counsel to advise Cityon proper handling includingsettlement,trial,and/or appellatework.
• Monitor the case and advise on updating reserves and financial information on the fileto maintain current and accurate loss information.
• Provide advice on and/or assign defense counsel and ensure thata plan of action,budget, and evaluationof the case isprepared and maintained on designated cases.
• Obtain, review,and analyze statusreportsof defense counsel and participateinselectionof strategy,need formotions, retentionof experts,trialpreparationand trial,and appellatework.
• Cooperate with counsel,claims supervisorand adjusteras a team with an open communication approach on each case to obtain the most economical and best resultforthe City.
• Appear at mediations and settlement conferences.
B. For non-claims related matters:
• Evaluate defense attorneycase load and areas of practiceto ensure consistenthandling between cases with similarsubject matter.
GEORGE HILLS COMPANY, INC. Page A-4
• Where appropriate,willanalyze the work of defense counsel and participateinthe selectionof new counsel or correctionof existing counsel where appropriate.
• Provide independent analysisof riskexposure not only based on education,training,and experience the LitigationManagers, but also based on litigationtrends across the stateforsimilarcases, incidents,and legalissues.
F. Reports and Procedures
1) Within thirty(30) days of assignment, or sooner ifpracticable,required,or requested, Consultant willprovide Citywith a reportpursuant to specifiedclaims handling instructions,showing name(s) of claimant(s),type of claim,date of loss, comments on liability,reserve recommendations, settlement recommendations, and other pertinentinformation.Subsequent to the initialthirty(30) day report, Consultant willreportas often as warranted by any importantchange instatusbut no longerthan every ninety(90)days untilthe claim closes unless extended diary isappropriate.
2) Alloriginalreports,documents, and claim data of every kind or description,that are prepared in whole or in part by or forthe Consultant in connection with the Agreement shallbe City'spropertyand constitutethe Consultant'swork product forwhich compensation ispaid.A copy of allreports,documents, and claim data ofevery kindor descriptionthatisinwhole or inpartby orforthe Cityisthe property of Consultant.Additionalcopies of originalreports,documents, and data requested by Citywillbe atCity'sexpense inaccordance withthisAgreement. 3) Consultant agrees thatCityhave access and the rightto auditand reproduce any of the Consultant's relevant records to ensure that the Cityisreceivingallservices to which the Cityisentitledunder thisAgreement orforany purpose relatingtothe Agreement.
G. Data
1) UtilizeConsultant'sclaims management informationsystem. Citywillbe provided "read-only"access to the claims system. "Read-write"access may be obtainedat the City'sadditionalexpense.
2) Record allclaim informationincludingallfinancialdata. 3) Provide Cityand broker Read only on-lineaccess tothe claimsdata system (up to fiveusers),ifdesired by City.
4) Provide monthly standard loss run and check register. 5) Provide annual claims data reportupon request.Writtenauthorizationand/or a Business Associate Agreement may be requiredfor confidentialinformation protected by H IPAA.
6) Provide assistanceto Cityindeveloping customized reportswhen requested atno additionalcharge).
7) Arrange for electronicfileconversion for any open and closed claims at the directionof City.
GEORGE HILLS COMPANY, INC. Page A-5
H. Weekly Meeting and Claim Review Meetings
Consultant shallhold weekly remote check-ins with the Cityto discuss claim strategy and direction on claims.
In additionto weekly consultations,Consultant shall,on a mutually agreed periodic basis,meet with Clientto review and discuss the City'sclaims inventoryand claims results of specifiedperiods and deliveryof servicesby Consultant.Consultantwillattendfour(4) claims review meetings annually with two (2) of the meetings to be attended in person and an agreed upon locationand two (2)of the meeting to be held remotely by phone or video conference.
I. Trust Account and Financial Accounting
1) Consultant shalladministerand maintain the City'sdesignated trustaccount for the payment of claim-related indemnity and expenses. The amount to be maintained in the trust account shall be determined by City.The Consultant is responsible for performing all reporting and reconciliationobligations in accordance with the terms of the Agreement and the City'sfinancialprotocols. 2) Maintain a copy of allchecks drawn by the Consultant to pay claims and claims related expenses.
3) Submit weekly check registersof alltransactionsmade forthe period. 4) Approval process shallbe documented in Consultant ClientExpressed Scope of Work Standards and Instruction Form.
5) Consultant will provide monthly bank reconciliationreports to City for audit purposes.
6) Submit positivepay ifapplicable/monitorpositivepay (review dailyemails from bank forexceptions).
7) Monitor account balance and prepare replenishment requests monthly. Where replenishment of the account isrequiredmore than once per month, an additional administrationfee may be required.Any additionalfees are subject to the City's priorwrittenapproval.
8) Respond to special funding requests arisingout of the settlement of a claim or case and funding thresholds as defined inthe Claim Handling Instructions.In the event thatmore than two (2)specialfunding requests are required ina month, an additionalfee may apply.
9) Annual Service
A. Respond to outside financialauditors
B. Provide reportsto City actuariesand claims auditors
C. Submit GH SSAE 16 reports,or the current equivalent
D. Providing annual reportsto outside agencies
E. Filingof regulatoryreportssuch as 1099, W-9, etc.
F. Cooperate with annual audits conducted by the City and its excess JPA/Carrier,whether performed jointlyor independently
GEORGE HILLS COMPANY, INC. Page A-6
J. Third Party Subrogation Services
In any claim in which City is alleged to be liableor case in which City is a named defendant, Consultant willidentifyadditionalpartiesto thatdisputewhich may also bear responsibilityor liabilityfor the damages claimed by the claimant(s)and/or plaintiff(s).
Where additional individuals or entities are identified as having some responsibility, Consultant willperform the followingservices,with the City'spriorapproval:
1) Prepare and filea claim with each identifiedindividualor entity. 2) Tender defense to or seek recovery from any identifiedindividualor entity. 3) With the assistance of counsel selected by the City,Consultant willprepare and file,or caused to be prepared and filed,any necessary litigationrequiredto affect the claim of recovery on behalf of the City.
4) AssistCitywith management of litigationrelatedto such claims or cases made to or filedagainst the other individualor entity.
5) Allcosts and expenses of litigationfiledpursuant tothissection,includingattorney fees foroutside counsel where necessary and approved, willbe paid by the City.
K. FirstParty Subrogation Services
In the event that City assigns firstparty subrogation claims to Consultant,City shall identifydamages ithas sustained which have a value of one thousand dollars($1,000) or greaterand forwhich any individualor entityisbelievedto be liableor responsible,the followingmay be performed:
1) City may authorize Consultant to act as a representative of City for the investigation,adjustment, processing, supervision,and evaluationof an ultimate recovery of potentialmoney from the identifiedindividualsor entities. 2) With priorapproval of the City,Consultant may engage the servicesof one of the City'slitigationattorneysto consult,review,and determine the best legalstrategy availableleadingto recovery forthe City.Upon determinationby the attorneythat a civilaction is in the best interestof the City,Consultant willnotifythe City and obtain authorizationto initiatelitigationin accordance with the recommendations of the City and itsattorney.
3) Where Consultant isable to recover money from an identifiedindividualor entity, inadditionto any other compensation identifiedinthisAgreement, Citywillpay a Subrogation Fee inthe amount of twenty fivepercent (25%) of the gross amount recovered foreach recovery obtained by Consultant. In no event shallConsultant be entitledto recover or share attorney'sfees or costs from the City or City's designated litigationattorneys.The minimum amount to be paid to Consultantwill be two hundred fiftydollars($250) per claim upon recovery.However, Consultant has the authorityto rejectany claim forany reason, relievingthe Cityof any fiscal responsibilityforrejectedclaims only.The amounts due under thissectionshallbe invoicedto the City on a monthly basis followingreceiptof the recovery payment from the at-faultparty.
GEORGE HILLS COMPANY, INC. Page A-7
4) While Consultant ishandling a subrogation claim forthe Citypursuant to the terms of thisAgreement, and the institutionof a civilaction isdetermined by the Cityto be the best course of action,City may electto,at City'sexpense, recallthe claim to the City'scontrol so that City may pursue recovery in a manner in the best interestof the City.
5) Where requested, Consultant shallconsult with City on claims and other related matters not specificallyassigned to Consultant forhandling under thisAgreement. 6) Consultant reserves the rightto cease working on any claim whereas information has not been made available to Consultant within one hundred twenty (120) days after Consultant has submitted the information and/or documentation to the City, at such time, the claim willbe closed.
7) Consultant does not handle subrogation claims with a value less than one thousand dollars($1,000),unless a separate arrangement is established and agreed to.
8) Costs and Expenses: Allcosts and expenses arisingout of or connected to any claim or lawsuitfiledpursuant to thisAgreement, includingattorneyfees foroutside counsel where necessary and approved, willbe paid by the City.Allsuch expenses requirethe City'sadvance writtenapproval before they are incurred.
A. Where Consultant is requested to appear in small claims court to pursue the recovery of funds, each appearance willincur an additionalfee of one hundred fiftydollars($150).
B. Where Consultant personnel appear inthe same court on the same day for more than one (1) claim, Consultant willcharge a flatfee of four hundred dollars($400) forone half('/2)of a day, or eight hundred dollars($800) for one (1)fullday, regardlessof the number of claims handled on thatday.
C. Cityshallreimburse Consultant allmiles traveledatthe currentIRS rateand Allocated Expenses as provided in ExhibitE.
9) Billingfor Services and Payment to Consultant: The process for payment to Consultant is stated as follows:
A. Upon reaching a settlementagreement approved inwritingby the Cityand alldocumentation executed includinga release,the at-faultpartywillissue a check to Cityforthe fullagreed upon amount.
B. Consultant shallsubmit an invoice to the City pursuant to Section 4 of the Agreement foritsSubrogation Fee plus any costs and expenses authorized pursuant to thisAgreement.
C. If City terminates the services of Consultant related to First Party Subrogation before the end of the Term or recallsany claim forany reason, the City'ssole liabilityforpending FirstParty Subrogation claims shallbe to reimburse Consultant fordirectout-of-pocket costs only.
D. The partiesmay discuss additionalconditionsunder which payment may be made or work continued and may reach an additionalagreement related thereto at the time of termination.
10)Consultant shalldefend and indemnify City,itsagents, officers,representatives and employees against any and allliability,including costs, for any actual or GEORGE HILLS COMPANY, INC. Page A-8
allegedviolationofthe FairDebt CollectionPracticesAct,the CaliforniaRosenthal Fair Debt Collection Practices Act, or any similar state or federal consumer protectionor unfairbusiness practicesstatutes,arisingout of the Consultant's collection,recovery,or subrogation activitieson behalfofthe Citypursuant to this Agreement.
II. CLIENT EXPRESSED AUTHORITY AND LIMITATIONS
Itisagreed by the partiesthatthe Cityhas provided Consultantwiththefollowingauthority and/or limitations,on the abilityof Consultant to act on behalfof the City.
Protocols for Rejections
GH requiresCityauthorizationto rejectclaims.Once authorizationisgranted,GH may send the rejectionon behalfof the City.
Settlement of Claims and Payment of Expenses
It is agreed that City has granted no authorityto Consultant for the purpose of compromising, settling,and paying any claims againstCitybeing handled by Consultantas set forth in this Exhibit A. The Consultant shall obtain writtenpriorapproval from the City's ProjectAdministratorbefore compromising or settlingany claim.
Legal Invoices and Expenses
Unless otherwise requested by the City, the Consultant is authorized to pay legal expenses-including, but not limitedto,attorney'sfees-without seeking priorconsent from the City. The Consultant shallincludean itemized summary of alllegalexpenses paid on a quarterlybasisor more frequentlyupon the City'srequest.This summary must include the payee (e.g.law firm),the amount disbursed, and the specificmatter to which the expense relates.
GEORGE HILLS COMPANY, INC. Page A-9
EXHIBIT B
MEDICARE, MEDICAID, AND SCHIP EXTENSION
ACT OF 2007 (MMSEA)
This law requires liabilityinsurers,self-insurers,no faultinsurersand workers' compensation insurersto report certaininformationto The Centers for Medicare and Medicaid Services (CMS) concerning Medicare beneficiaries.The penaltyforfailureto comply isone thousand dollars($1,000)per day, per claimant.
George HillsCompany, Inc.(GH) has contractedwith ExamWorks forMandatory InsurerReporting (MIR) for the CLIENT. ExamWorks shallrepresentthe CLIENT-and Responsible Reporting Entity(RRE) to thisexistingAgreement and thisaddendum and willbe the designated reportingagent. GH willbe responsibleforgatheringand reporting accurate claims data required by MMSEA to ExamWorks ina timelymanner. GH agrees to assume the responsibilityfor reporting data to ExamWorks to meet allreporting requirements in accordance with MMSEA, on behalf of the RRE; includingassuming responsibilityforany finesor penaltiesthatare directlycaused by GH's non-compliance.
GH furtheragrees to indemnify and hold-harmless, RRE, and staff,forany penaltiesor finesresultingfrom GH's directfailureto timelyand accuratelyprovidethe reportingdata to ExamWorks. The above-mentioned obligationsto indemnify and hold-harmless shall not be applicableto matters relatingto delays caused by RRE or other thirdparties,or inaccuratedata supplied to GH by RRE or other thirdparties.
By contractwith GH, ExamWorks willindemnify and hold GH harmless from and against any claim,damage, fine,loss and expense, arisinginconnectionwith,or as a resultof,any error,omission, or negligentperformance of itsobligationsas reporting agent, which indemnity willincludeallreasonable costs of litigationand attorneys'fees incurred.Without in any way limitingthe indemnity set forthinthisAgreement, allwork performed by ExamWorks willbe done ina professionalmanner.
GH shallperform the necessary data gathering forRRE and ExamWorks; as such GH shallinclude inour monthly invoicingthe time incurredforsuch work atGH's contract hourly rateor willbe included inyour monthly flatfee or claims adjusting.
ExamWorks willperform the MMSEA Mandatory InsurerReportingfunctionforGH, and itsRREs, shallbe charged as an Allocated Expense, as defined inAttachment C, subjectto the following.RRE willdesignate ExamWorks, unlessotherwiserequested,as its exclusive vendor for all of RRE's "Qualified Referrals" (those claims determined to requireMedicare Set Aside (MSA) or a Claim Settlement Allocation(CSA) and RRE will utilize other ExamWorks services related to Medicare Secondary Payer (MSP) compliance identifiedintheirfee schedule.
GEORGE HILLS COMPANY, INC. Page B-1
EXHIBIT C
CALIFORNIA INSURANCE POOL AUTHORITY ("CIPA")
MINIMUM PERFORMANCE STANDARDS
FOR LIABILITY CLAIMS ADMINISTRATION POLICY
Member Agencies shalleitherincorporatethese minimum performance standards into signed agreements with their claims administrator or obtain a signed acknowledgement from theirclaims administratorthatthey willcomply with the Minimum Performance Standards established by CaliforniaInsurance Pool Authority (CIPA).
Copies ofthe agreements or signed acknowledgments shallbe provided to CIPA. Claims willbe audited forconformance with thisPolicy.
This Policyisdivided intothe followingsections:
1) Caseloads
2) Communication
3) Investigations
4) File Review & Documentation
5) Reporting
6) LitigationManagement
7) Claim Resolution & Settlement Authority
8) Payments & Reserves
9) Excess Insurance Reporting
10) Supervisory Review
11) Subrogation
12) Medicare Reporting
CASELOADS
A. Caseloads for claims examiners shall not exceed one hundred seventy five (175) claims, unless approved in writingby the Member Agency and/or CIPA.
B. Supervisory personnel shall not handle a caseload. Exceptions may be made fora small number of claims involvingspecial issues.
C. Administrator shallprovide CIPA and Member Agency with an accounting of caseloads each June 30 and December 31. The accounting for each examiner shallinclude(1)the name or pseudo name of allassigned clients; GEORGE HILLS COMPANY, INC. Page C-1
and (2) the number of claims for each client.Each examiner shallsign acknowledgement of theirclaims count and provide to CIPA and Member Agency.
COMMUNICATION
A. Ifclaimant isnot represented by an attorney,contact claimantwithintwenty- four (24) hours of receiptof a claim and maintain appropriatecontactwith them untilthe claim is closed, unless otherwise directed by the Member Agency. Ifclaimant not contacted,the reason shallbe documented infile.
B. Telephone callswillbe returned withintwenty-four(24) hours. Ifthe staff member called is not available within this timeframe, another designated staff member will return the call.
C. Allwrittencommunications received shallbe stamped with date of receipt.
D. Respond to emails within forty-eight(48) hours, unless an immediate response isrequired. Ifstaffmember does not have the informationbeing requested at the time they respond, the response should includea date by which they willprovide the requested information.
E. The claims administratorshallrespond to allother writtencommunications withinfive(5) business days of receiptor sooner ifan immediate response isrequired.
INVESTIGATIONS
A. When required on non-litigatedclaims, statements from or interviewswith claimant(s)and witnesses shallbe taken withinthree (3)business days of receiptof a claim.Statements willbe preserved by recordingor takinghand- writtensigned statements and interviewsshallbe documented.
B. Examiner shalltake steps to ensure proper preservationof evidence.
C. Further investigateclaims where the initialreview indicates that it is warranted. Further investigationmay include,but not be limitedto,on-site investigation,taking photographs, interviewingwitnesses, takingsigned or recorded statements, verifyingdamage or loss,taking measurements, or obtaining maps/diagrams, medical releases, police reports, vendor contracts,third-partycontracts,insurance documents, internaloperations investigations,paramedic reports, marine department reports,building permits, or other records as required. Initialinvestigationsshall be completed within forty-five(45) calendar days of receipt. The effortsto complete the initialinvestigationand any furtherinvestigationsshall be documented inthe file,includingany reason fordelay.
D. Within forty-five(45) calendar days, identifyand document in the fileall liabilityissues, including but not limited to immunities, comparative negligence,jointtortfeasors,and jointand severalliability E. Within forty-five(45) calendar days, identifyand document in the fileall damages, includingpropertydamage, nature and extentof injuries,medical GEORGE HILLS COMPANY, INC. Page C-2
costs, lostwages, and non-economic damages. The effortsto complete shallbe documented inthe file,includingany reason fordelay.
F. Evaluate need to utilizeexperts and obtain approval from Member Agency, and CIPA ifindicated.
G. Within fifteen(15) calendar days of receipt of claim, report bodily injury cases to the Index Bureau and re-index as needed. If not reported, the reason shall be documented in file.
H. Within three (3) business days of receiptof a claim,arrange forappraisalof damaged property when indicated. Ifappraisal not obtained, the reason shall be documented in file.
I. Investigativeassignments to outside vendors will only be made with approval from Member Agency, and CIPA ifindicated
J. All notices,includingclaim insufficiency,lateclaims, rejections,etc.,shall be done in accordance with the relevant Governmental Code provisions.
FILE REVIEW & DOCUMENTATION
A. Claims willbe initiallyreviewed and entered in the computer system within twenty-four(24) hours of receipt.
B. Calendar allfilesat appropriate intervalsand no less frequentlythan every sixty(60) calendar days to allow fortimely completion of required activity.
Rejected claims shallbe diariedevery ninety (90) days or as directedby Member Agency.
C. All activity,including phone calls,correspondence and the rationalefor decisions shallbe clearlyand concisely documented inthe files.
D. Allcorrespondence shallbe contained inthe file.
E. Notes and activitiesentered in the computer system must be dated and identifywho completed the entry.
F. File notes shall not be copied from prior entries without reviewing for relevance and accuracy.
G. An activecase strategyshallbe documented inthe fileuntilclosure.
H. Maintain accurate and complete records of allpayments.
I. Provide Member Agency and CIPA with copies of filecorrespondence and documentation as requested.
J. All files shall be reviewed for closure and closed withinseven (7) calendar days from date allissues have been resolved.
REPORTING
A. Provide firststatus reportwithinthirty(30) calendar days of receiptof claim to Member Agency. Send reportto CIPA General Manager when claim meets designated criteria.
B. Subsequent status reportsshallbe provided no less than every ninety (90) calendar days. Status reportsshallfocus on changes in liabilityanalysis, damages, and reserves.
C. Provide Member Agency and CIPA, ifapplicable,with a status report outliningthe facts of the case, resultsof investigations,primary issues, GEORGE HILLS COMPANY, INC. Page C-3
requested action and any related documentation within fourteen (14) calendar days of receiptof lawsuit.
D. Provide clear and concise narrativereports when recommending rejection or settlement of a claim, when claim is going to trial,or when other significantevents occur.
E. CIPA shall be provided with closing documents and an accounting of the finalpaid amounts withinfifteen(15) calendar days from the day the final defense billispaid on claims involvingCIPA funds.
LITIGATION MANAGEMENT
A. Forward LitigationAcknowledgement Form to defense attorneys when case assigned (do not wait untillawsuit filed).The claims administratorshall follow-up no less than every five(5) business days for receiptof Litigation Acknowledgement Form, as expenses incurred priorto receiptdo not count toward a Member Agency's self-insuredretention(SIR).
B. Ifthe billedamount of attorney'sfees and costs exceed seventy five(75) percent of the totalbudget, then the claims administratorshall request an updated budget.
C. Defense attorneys shall copy CIPA on all correspondence related to reportable claims. The claims administrator shall immediately notifythe defense attorney ifCIPA isnot copied on any correspondence.
D. Assisttrialattorney inpreparationof litigationand negotiationof settlements at request of Member Agency and/or CIPA and provide trialattorneywith all necessary documentation.
E. Assisttrialattorney inanswering interrogatories.
F. Attend mediations, mandatory and voluntary settlement conferences, and arbitrationsas requested.
G. Assist Member Agency's designated representativeinsmall claims actions.
H. Monitor performance of vendors for appropriateness of work and cost effectiveness.Any deficienciesshould be reported to Member Agency and, ifapplicable,to CIPA.
I. The claims administrator is responsible for monitoring compliance with the LiabilityProgram Defense Counsel Policy.The Member Agency and CIPA, ifapplicable, shall be copied on follow-up requests to defense attorneys when out of compliance. Allclaims administrators are responsible forbeing fullyknowledgeable of requirements in the LiabilityProgram Defense Counsel Policy.
CLAIM RESOLUTION AND SETTLEMENT AUTHORITY
A. Process any claim or potentialclaim for settlement in accordance with instructionsand policiesof Member Agency and in accordance with the California Government Code.
B. Obtain a fullyexecuted release on allsettlements and dismissals.
C. Allsettlement offersrequiringany payment or potentialpayment from CIPA must be approved inwritingin advance by CIPA. Neither the examiner nor GEORGE HILLS COMPANY, INC. Page C-4
legalcounsel shallmake any recommendations or commitments to injured employees or theirlegalcounsel for settlements that involveor potentially involve CIPA funds without CIPA's priorapproval.
D. Proof of settlement authorization from the Member Agency and CIPA, if applicable,shallbe maintained inthe file.
PAYMENTS & RESERVES
A. Review and process payments within authority level within twenty (20) calendar days of receipt.
B. Each claim shall be reserved at the most probable outcome and evaluated based on the merits of the claim. This includes but isnot limitedto damages, past and future medical expenses, loss of income, pain and suffering, plaintiff'sattorney fees, defense costs, comparative negligence, facts of loss, defense counsel evaluations, and jury verdicts. The file shall document the rational for the reserves.
C. At all times, reserves shall reflectthe current information in the fileand reserves shallbe reviewed foradequacy at each diary review and no less frequentlythan every ninety (90) calendar days and the fileshalldocument thisrequired review of reserves.
D. Review proposed reserve changes with CIPA General Manager priorto making changes on any claims with potentialexposure to CIPA.
EXCESS INSURANCE REPORTING
A. Claims administrator shall report to the reinsurance/excess insurance carrier(s),including CIPA, in accordance with reporting requirements established by CIPA and each insurance carrierabove CIPA.
B. Quarterly reporting shall be in a format prescribed by CIPA, as may be modified from time to time.
C. As defined by CIPA's Memorandum of Coverage, allclaims with reserves or potentialpayments, includingdefense costs that are 50% or more of a Member Agency's SIR, or involvingany ofthe following,shallbe considered "excess claims" and reported in writingto the General Manager of CIPA withintwo (2) business days afterreceiptby claims administrator. 1) Paralysis- Paraplegia,Quadriplegia
2) Loss of eye(s) or limb(s)
3) Spinal cord or brain injury
4) Sensory organ or nerve injury,or neurologicaldeficit 5) Serious burns
6) Substantial disabilityor disfigurement
7) Death
8) Amputation or loss of use of a major extremity
9) Rape, sexual abuse offense/molestationof any individual 10)Any disabilitywhere itappears reasonably likelythat there willbe disabilitythat lastsfor more than one year
GEORGE HILLS COMPANY, INC. Page C-5
11 )Class Action
12)Employment Practices Liabilityclaims regardless of claim reserves
SUPERVISORY REVIEW
Supervisors shall review claims no less frequently than every one hundred twenty (120) calendar days. The supervisor shalldocument the scope of the review and include any recommendations.
SUBROGATION
A. Subrogation possibilitieswillbe identifiedwithinfive(5)business days after a claim is opened, or within five (5) business days after information is available that subrogation may exist. The claim file shall document subrogation possibilitiesand allaction relatedto pursuing.
B. The party responsible forthe injuryshallbe notifiedof the Member Agency's or CIPA's rightto subrogation withinfourteen (14) calendar days afterthe identityof the responsible party isknown by claims administrator.
C. Contact with the responsible party and/or insurerto provide notificationof the amount of estimated recovery shall be made at leastevery sixty(60) calendar days or sooner ifcosts escalate.
D. Member Agency's approval is required to waive pursuitof subrogation or agree to a settlement of a third-partyrecovery. This approval shall be documented in the claim file.
E. CIPA's approval is required to waive pursuitof subrogation or agree to a third-partysettlement ifthere ispotentialforthe claim to exceed the Member Agency's SIR.
MEDICARE REPORTING
A. The claims administratorshallreportallclaims incompliance with Medicare, Medicaid, and SCHIP Extension Act (MMSEA) Section 111 Mandatory reporting.
B. Medicare eligibilityshallbe documented inthe fileno laterthan at the time the file is evaluated for settlement.
Amended and Approved by the Board of Directors on June 29, 2020.
Repeals April 10, 2018 Minimum Claims Performance Standards for Third Party LiabilityClaims Administration Policy.
GEORGE HILLS COMPANY, INC. Page C-6
EXHIBIT D
SCHEDULE OF BILLING RATES
COMPENSATION, FEES AND EXPENSES
The followingcompensation, fees and expenses, shallbe paid inconsiderationforthe services provided by Consultant:
George Hills
Pricing Annual Claim Admin Fee One Time StartupFee MMSEA Fee Annual Non Claim Admin Fee Total Cost 2026-2027 $ 135,000.00 $ 10,000.00$ 800.00 $ 6,500.00 $ 152,300.00 2027-2028 $ 139,050.00 $ - $ 500.00 $ 6,695.00 $ 146,245.00 2028-2029 $ 143,220.00 $ - $ 500.00 $ 6,895.00 $ 150,615.00 2029-2030 $ 147,520.00 $ - $ 500.00 $ 7,100.00 $ 155,120.00 2030-2031 $ 151,945.00 $ - $ 500.00 $ 7,300.00 $ 159,745.00 Total Value $ 764,025.00
The compensation to be paid pursuant to this Agreement are comprised of three distinctcategories:
A: "Administrative Services"
B: "Fees forClaim Adjusting Services"
C: "Allocated Costs/Expenses"
The Fees and Costs/Expenses pursuant to subsections "A","B",and "C" willbe billed together monthly in a standard invoiceformat utilizedby Consultant. Additionally,if the City elects any optional services identifiedsubsections "F" or "G" below, all additionalamounts willbe itemized and billedtogether monthly where applicable.
A. Administration Services
1) One Time (firstyear only)On-Boarding Fee: Ten thousand dollars($10,000) Consultant willcharge a one-time startupfee which includes,but isnot limitedto, the planning and coordination of the onboarding process and documentation, detailing specific claims handling instructions,communication protocols, personalize design of claims management information system ("CMIS"), coordinatingtrustaccounts and banking setups, W-9, etc.,and claims triageand assignments. This fee isbilledinthe firstmonth of service. 2) Annual AdministrationFee: Six thousand fivehundred dollars($6,500) which is billedannually at the beginning of the Agreement term and thereafterupon the anniversary of the Agreement.
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3) MMSEA: There isa one-time setup fee of eighthundred dollars($800) and a five hundred dollar($500) annual reportingfee, charged to support Consultant's contractwith Consultant's service providerfor reportingto CMS. This fee isbilled annually at the beginning of the Agreement term.
4) System Access Fee: Access to the claims management informationsystem, "CMIS", which includes the setup and management of up to five(5) "read only" user accounts. "Read/write"access to the system can be obtained foran additional fee.
5) iMetricsReport Fee: There willbe no charge forour iMetricsbusiness intelligence reportswith executive in-person debriefs.
6) George HillsClientPortal:Consultant operates a clientinterfacewhich isintended to provide the City with informationregarding claims relatedand loss information.
Citywillbe provided with access forfive(5) users at no additionalcost. 7) Custom Reports: Additional charges for custom reportingshall be defined as, specializedreportingrequiringa third-partyprogrammer forthree hours or more and is clientspecific.Custom Report do not apply to standard searches, data exports,loss runs,or reportsgenerated forPublic Records Act requests,which are provided by Consultant at no cost.
8) Conversion Fee: Consultant shallperform allservices associated with electronic data conversion, transition,reconciliation of financials, all reports created and vetted,and Citysign-offon CMIS set up ("Conversion")at no cost to the City.The Conversion Fee, valued at twenty thousand dollars($20,000),iswaived infullfor the five-yearterm ofthisAgreement. The Cityshallnot be responsibleforany costs or fees associated with data conversion, system setup, or reportingvettingduring the term of thisAgreement.
The Conversion Fee does not include shipping, storing,scanning, copying, or otherwise handling open or closed paper claims files.Please see "Paper Files" Section 12 below.
9) Catastrophic Fees: Consultant recognizes that there are events that are unanticipatedand/or catastrophic.When such events occur, itrequiresadditional hours forthe handling of such claims which could not be estimated or included in the Annual Fixed Fee calculation contained herein. As such, to preserve the quality and efficiencyof service,when such an event isdeemed to be catastrophicby any entityprovidingexcess coverage, the CaliforniaDepartment of Insurance, the Insurance Services Office,or any local,state,or federalgovernment declares a Stateof Emergency inrelationtothe subjectmatter upon which the claim isbased, and upon agreement of the City and Consultant, should any one event occur resultinginfiveor more claimantsalleginglossout of the same designated event, or two or more claimants with theirown attorneys,Consultant willbillthe Cityon a time and expenses basis atthe currenthourlyrateforallservices.Consultant shall providea writtenbudget estimateforthe City'spriorapproval.These claimswillbe identifiedfor separate billingprocedures and willnot be counted in the claims frequency which serves as the underlying basis for the Fixed Fee calculation applicableforthe next year inthe Agreement period.
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10)Fixed Fee Annual Recalculation: Consultant reviews and analyzes the claims frequency semi-annually.Within thirty(30) days of the end of each six (6) month period from July 1, 2026, the date the work under the Agreement is initiated, Consultant willprovide notice to the City of the actual number of claims received for the preceding 6 months. Ifthe claims frequency during a twelve (12) month period exceeds, or drops below, the base number of one hundred seventy five (175), by greater than thirtypercent (30%), but in no event more than fiftypercent (50%), Consultant willprovide a new Annual Fixed Fee calculationbased on the change infrequency. The new Annual Fixed Fee willbegin on July 1st of the next year inthe Agreement term. Ifthe frequency changes inan amount ofthirtypercent (30%) or less,there willbe no change in the Annual Fixed Fee calculation.The claim frequency changes by greater than fiftypercent (50%), the parties will discuss contractmodification.Indetermining the actual number of claims received by the City,any catastrophic claims as described above shall be excluded and shallnot count toward the base number forpurpose of the frequency calculations. 11 )General File:A general administrativefileshallbe established and maintained to track effortrelated to services necessary to fulfillour contractualobligationsand not otherwise associated with a claim.
12)Paper Files:Consultant is prepared to take the lead to arrange for allservices relating to conversion storage, copying, scanning, shipping, and disposal.
Consultant willprovide City a quote forany services relatedto storage, retrieval, copying, scanning, shipping,and disposal of paper files.
B. Fees for Claim Adjusting Services
1) Annual Fixed Fee of $135,000. Inexchange forthe services provided under the Agreement by Consultant, City shall pay to Consultant the followingAnnual Fixed Fee(s).
Fixed Annual Fee*
Year One (4/1/26 - 3/31/2027) $135,000
Year Two (4/1/2027 - 3/31/2028) $139,050
Year Three (4/1/2028 - 3/31/2029 $143,220
Year Four (4/1/2029 - 3/31/2030 $147,520
Year Five (4/1/2030 - 3/31/2031 $151,945
2) Time and Expense: In the event of catastrophic loss as referenced herein,the Consultant Claims team willcharge time for each task performed on a claim.
The time billedwillbe charged to each specificclaim using a minimum of one tenth (1/10)of an hour increments foreach task.Time billedwillbe rounded to the nearest one tenth (1/10) of an hour. Each billingentry willbe accompanied GEORGE HILLS COMPANY, INC. Page D-3
with furtherdescriptionsof the task performed and shallbe stated on each monthly invoice.The currenthourlyratesare:
LitigationManager: $225/hour*
Claims Supervisor: $135/hour*
Sr. Claims Adjuster: $118/hour*
Claims Adjuster: $105/hour*
Claims Processing: $92/hour*
C. Allocated Costs/Expenses
With City'spriorwrittenconsent, Consultant willcharge to the Cityboth allocatedand non-allocated costs and expenses incurred pursuant to the Agreement as stated herein and defined further in Exhibit E, "Allocated Expenses." 1) Mileage Reimbursement: Mileage traveledwillbe paid atthe IRS rateineffectat the time the mileage istraveled.This section applies to mileage which can be allocatedto a specificclaim and also mileage which isnot allocatedto any claim, such as attendance at claim review, board and/or committee meetings requested or required by the City.
2) Adjuster Travel Expenses: Consultant willseparately charge for any travel expenses in connection with attendance at mediations,settlementconferences, trials,etc.This willbe subject to City priorwrittenapproval and actualexpenses willbe submitted with receiptson a monthly basis. This section applies to travel expenses which can be allocatedto a specificclaim and also travelexpenses which are not allocatedto any claim,such as attendance at claim review,board and/or committee meetings.
E. Electronic Funds Transfer or Direct Deposit
Consultant has determined that the most efficientand secure defaultform of payment forgoods and/or servicesprovidedunder the Agreement withCityshallbe Electronic Funds Transfer (EFT) or directdeposit,unless an alternativemethod of payment is deemed appropriateby both Consultant and Cityand agreed to inwriting.
Consultant willsubmit a directdeposit authorizationrequest via to City with banking and vendor information,and any other information that the City determines is reasonably necessary to process the payment and comply withallaccounting,record keeping, and tax reportingrequirements.
At any time during the durationof the Agreement, Consultant may submit a written request foran exemption to thisrequirement.Such requestmust be based on specific GEORGE HILLS COMPANY, INC. Page D-4
legal,business or operationalneeds and Consultant willexplainwhy the payment method designated by the Cityisnot feasibleand an alternativeisnecessary.
F. FirstParty Subrogation Services and Fees
Consultant is a claim administration firm experienced in the handling of firstparty subrogation claims and isready and capable of performing such serviceson behalfof City upon assignment. The fee forthese services istwenty fivepercent (25%) of the gross recovery.
G. Optional Services
Consultant employs "in-house" attorneys which have vast experience in claims and litigationhandling,problem resolution,issue identificationand investigation,and advice and consultation,for alltypes of claims and issues which may arisefor a publicentity.
Should the special circumstance arise whereby City requests additionalservices by a Consultant attorney, includingthose identifiedin the listbelow, the services willbe provided on a time and expenses basis and at the rateoftwo hundred twenty fivedollars ($225) per hour, billedusing one tenth (1/10) of an hour increments for each task performed on a claim or issue.The fees charged forthese serviceswillbe inadditionto any other compensation defined inthis
LitigationManagement
Monitoring Counsel
Outside General and Special Counsel
Trial/Mediation/Board Meeting Attendance
Legal Trainingand Seminars
Consultant can also provide Professional and Financial Services related to risk management and loss prevention in alignment with the scope of servicesforthe same rate referenced above.
Upon writtenrequest from the ProjectAdministrator as defined herein,Consultant shall provide a letterproposal forOptional Services requested by the City(hereinafterreferred to as the "LetterProposal").The LetterProposal shallincludethe following:
1. A detailed descriptionof the Services to be provided.
2. The positionof each person to be assigned to perform the Services,and the name of the individualsto be assigned, ifavailable.
3. The estimated number of hours and cost to complete the Services.
4. The time needed to finishthe specificproject.
No Services shall be provided untilthe Project Administrator has provided written acceptance of the Letter Proposal. Once authorized to proceed, Consultant shall diligentlyperform the duties in the approved Letter Proposal.
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EXHIBIT E
ALLOCATED EXPENSES
Typically,allocated expenses are those expenses that are generated by a claim (by outside vendors other than George Hills)that cannot be foreseen nor included in this Agreement. These expenses are generally allocated back to the specificclaim filefor which the cost was incurred and then charged back to the entitywhose claim incurred that cost. In most situationsthese are pass-through costs (with processing fees) for services and/or fees not directlygenerated by the TPA, but rather by a third-party consultant where the TPA has acted as an agent on behalf of the entityto necessarily outsource services to a third-partyconsultant and/or miscellaneous fees applicableto the specificclaim applied by an outside entity,such as a court or copy services. Below, George Hillshas provided a list,which is not an exhaustive list,of typicalallocated expenses.
Paid to GH
• CMS reportingcosts and fees (ExamWorks)
Paid to Others as Authorized by Client
• Fees of outside counsel for claims in suit,coverage opinions, and litigation,and forrepresentationand hearings or pretrialconferences;
• Fees of court reporters;
• Allcourt costs, court fees, and court expenses;
• Fees for service of process;
• Costs of undercover operatives and detectives(ifinitiallypaid by GH); • Costs for employing experts for the preparation of maps, professional photographs, accounting, chemical or physical analysis,or diagrams; • Costs for employing experts for the advice, opinions, or testimony concerning claims under investigationor in litigationfor which a declaratory judgment is sought;
• Costs for independent medical examination or evaluation for rehabilitation; • Costs of legaltranscriptsof testimony taken at coroner's inquests, or criminal or civilproceeding;
• Costs forcopies of any publicrecords or medical records; • Costs of depositions and court reporting;
• Costs and expenses of subrogation, (ifnot George Hills); • Costs of engineers, handwriting experts, or any other type of expert used in the preparation of litigationor used in a one-time basis to resolve disputes; • Witness fees and travelexpenses;
GEORGE HILLS COMPANY, INC. Page E-1
• Costs of photographers and photocopy services (ifnot George Hills-our costs for thisisincluded inour rate);
• Costs of appraisal fees and expenses not included in flatfee or performed by others;
• Costs of indexing claimants;
• Services performed outside Southern California;
• Costs associated with Medicare Set-Aside analysis and submission or Medicare Conditional Lien negotiation;
• Investigationof possiblefraud includingSIU servicesand relatedexpenses; and/or • Any other similarcost,fee,or expense that isnot otherwise included inthe TPA's service fees that is reasonably chargeable to the investigation,negotiation, settlement, or defense of a claim or loss or to the protectionor perfectionof the subrogation rightsof the entity,includingtravelrelated expenses.
Travel Related
Costs of travelrelatedto claims includingmileage driven, such as for attendance at inspections,mediations, and trial,shallbe allocated to the specificclaim and reimbursed to GH based on the actual cost incurred.Mileage shallbe reimbursed at the current IRS rated at the time the mileage istraveled.
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EXHIBIT F
INSURANCE REQUIREMENTS - PROFESSIONAL SERVICES
1. Provisionof Insurance. Without limitingConsultant'sindemnificationof City,and priorto commencement ofWork, Consultantshallobtain,provideand maintainat itsown expense duringthe term ofthisAgreement, policiesof insuranceof the type and amounts describedbelow and ina form satisfactorytoCity.Consultant agrees to provideinsurancein accordance with requirementssetforthhere. If Consultantuses existingcoverage to comply and thatcoverage does not meet these requirements,Consultant agrees to amend, supplement or endorse the existingcoverage.
2. Acceptable Insurers.All insurance policiesshall be issued by an insurance company currentlyauthorizedby the Insurance Commissioner to transact business of insurance in the State of California,with an assigned policyholders' Rating of A- (or higher)and FinancialSize Category Class VII (or larger)in accordance with the latesteditionof Best's Key Rating Guide, unless otherwise approved by the City'sRisk 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 accidentforbodilyinjuryby accidentand each employee forbodilyinjuryby disease in accordance with the laws of the State of California,Section 3700 of the Labor Code.
Consultant shallsubmit to City,along with the certificateof insurance,a Waiver ofSubrogation endorsement infavorofCity,itsCityCouncil,boards and commissions, officers,agents, volunteers and employees.
B. General LiabilityInsurance. Consultant shall maintain commercial general liabilityinsurance, and if necessary umbrella liabilityinsurance,with coverage at leastas broad as providedby Insurance ServicesOfficeform CG 00 01, in an amount not less than two milliondollars($2,000,000) per occurrence, fourmilliondollars($4,000,000)general aggregate. The policy shall cover liabilityarisingfrom premises, operations, personal and advertisinginjury,and liabilityassumed under an insuredcontract(including the tortliabilityof another assumed ina business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 coveringbodilyinjuryand propertydamage forallactivitiesof Consultant arisingout of or in connection with Work to be performed under this Agreement, includingcoverageforany owned, hired,non-owned or rented GEORGE HILLS COMPANY, INC. Page F-1
vehicles, in an amount not less than one million dollars ($1,000,000) combined single limiteach accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall maintain professional liabilityinsurance that covers the Services to be performed in connection with thisAgreement, in the minimum amount of two million dollars ($2,000,000) per claim and four million dollars ($4,000,000) in the aggregate. Any policyinceptiondate, continuitydate, or retroactive date must be before the Effective Date of thisAgreement and Consultant agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement.
E. Cyber LiabilityInsurance. Consultant shall maintain cyber liabilityinsurance inan amount not lessthan two milliondollars($2,000,000) per occurrence and fourmilliondollars($4,000,000)annual aggregate covering (1)allacts, errors, omissions, negligence, infringement of intellectualproperty; (2) network securityand privacyrisks,includingbut not limitedto unauthorized access, failureof security,breach of privacy perils,wrongful disclosure, collection,or negligence inthe handling of confidentialinformation,privacy perils,includingcoverage for relatedregulatorydefense and penalties;(3) data breach expenses payable whether incurred by City or Consultant, includingbut not limitedto consumer notification,whether or not required by law, computer forensic investigations,public relations and crisis management firm fees, credit fileor identitymonitoring or remediation services in the performance of services for City or on behalf of City hereunder. Ifa sub-limitappliesto any elements of coverage, the certificate of insurance evidencing the coverage above must specify the coverage section and the amount of the sub-limit.
4. Other Insurance Requirements. The policiesare to contain, or be endorsed to contain,the followingprovisions:
A. Waiver of Subrogation. Insurance coverage for Commercial General Liability,Automobile, and Workers' Compensation maintained or procured pursuant to thisAgreement shallbe endorsed to waive subrogation against City,itsCity Council, boards and commissions, officers,agents, volunteers and employees or shall specificallyallow Consultant or others providing insurance evidence in compliance with these requirements to waive their rightof recovery priorto a loss.Consultant hereby waives itsown rightof recovery against City,and shallrequiresimilarwrittenexpress waivers from each of its subconsultants.
B. Additional Insured Status. All liabilitypoliciesincluding general liability, excess liability,pollutionliability,and automobile liability,ifrequired,but not includingprofessionalliability,shallprovide or be endorsed to provide that GEORGE HILLS COMPANY, INC. Page F-2
City,itsCityCouncil,boards and commissions,officers,agents,volunteers and employees shallbe includedas insuredsunder such policies.
C. Primary and Non Contributory.Allliabilitycoverage shallapply on a primary basisand shallnot requirecontributionfrom any insurance or self-insurance maintained by City.
D. Notice of Cancellation.Allpoliciesshallprovide Citywiththirty(30)calendar days' noticeof cancellation(except for nonpayment forwhich ten (10) calendar days' noticeis required)or nonrenewal of coverage for each required coverage.
5. Additional Agreements Between the Parties.The parties hereby agree to the following:
A. Evidence of Insurance. Consultant shallprovide certificatesof insurance to Cityas evidence of the insurance coverage requiredherein,along witha waiver of subrogationendorsement forworkers'compensation and other endorsements as specifiedhereinforeach coverage. Insurancecertificates and endorsement must be approved by City's Risk Manager priorto commencement of performance. Current certificationof insuranceshallbe kept on filewith Cityat alltimes duringthe term of thisAgreement. The certificatesand endorsements foreach insurance policyshallbe signed by a person authorizedby thatinsurerto bind coverage on itsbehalf.At least fifteen(15) days priorto the expirationof any such policy,evidence of insuranceshowing thatsuch insurancecoverage has been renewed or extended shall be filedwith the City. Ifsuch coverage is cancelled or reduced, Consultant shall,withinten (10)days afterreceiptofwrittennotice of such cancellationor reduction of coverage, filewith the Cityevidence of insuranceshowing thatthe requiredinsurancehas been reinstatedor has been provided through another insurance company or companies. City reserves the rightto requirecomplete, certifiedcopies of allrequired insurance policies,at any time.
B. City'sRight to Revise Requirements. City reserves the rightat any time during the term of the Agreement to change the amounts and types of insurancerequiredby givingConsultantsixty(60)calendardays' advance writtennotice of such change. If such change resultsin substantial additional cost to Consultant, City and Consultant may renegotiate Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all agreements withsubcontractorsorotherswithwhom Consultantentersinto contractswith on behalf of Citywillbe submitted to Cityforreview. Failure ofCityto requestcopiesofsuch agreements willnot impose any liabilityon City,or its employees. Consultant shall require and verifythat all subcontractors maintain insurance meeting allthe requirements stated GEORGE HILLS COMPANY, INC. Page F-3
herein,and Consultant shallensure that City is an additionalinsured on insurance requiredfrom subcontractors.For CGL coverage, subcontractors shallprovide coverage with a format at leastas broad as CG 20 38 04 13.
D. Enforcement of Agreement Provisions. Consultant acknowledges and agrees that any actual or alleged failureon the part of City to inform Consultant of non-compliance with any requirement imposes no additional obligationson Citynor does itwaive any rightshereunder.
E. Requirements not Limiting.Requirements of specificcoverage featuresor limits contained in this Section are not intended as a limitationon coverage, limitsor other requirements,or a waiver of any coverage normallyprovided by any insurance. Specificreferenceto a given coverage featureisfor purposes of clarificationonly as itpertainsto a given issue and is not intended by any partyor insured to be allinclusive,or to the exclusionof other coverage, or a waiver of any type. Ifthe Consultant maintains higher limitsthan the minimums shown above, the City requires and shall be entitledto coverage for higher limitsmaintained by the Consultant. Any availableinsurance proceeds in excess of the specifiedminimum limitsof insurance and coverage shall be availableto the City unless expressly prohibitedby the insurance policy.
F. Self-insuredRetentions. Any self-insuredretentionsmust be declared to the City. Self-insurancewill not be considered to comply with these requirements unless approved by City.
G. City Remedies for Non-Compliance. IfConsultant or any subconsultant fails to provideand maintaininsurance as requiredherein,then Cityshallhave the rightbutnotthe obligation,topurchase such insurance,toterminatethis Agreement, or to suspend Consultant'srightto proceed untilproper evidence of insurance isprovided. Any amounts paid by Cityshall,atCity's soleoption,be deducted from amounts payable toConsultantor reimbursed by Consultant upon demand.
H. Timely Notice of Claims. Consultant shallgive City prompt and timelynotice of claims made or suits institutedthat arise out of or result from Consultant's performance under this Agreement, and that involve or may involve coverage under any of the required liabilitypolicies.City assumes no obligationor liabilityby such notice,but has the right(butnot the duty)to monitorthe handlingofany such claimor claimsifthey are likelyto involve City.
Consultant's Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additionalkinds of insurance,which initsown judgment may be necessary foritsproperprotectionand prosecutionofthe Work.
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