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CONTRACT 1960 Service Agreement CLOSED4 LIABILITY SELF - INSURANCE SERVICE AGREEMENT THIS AGREEMENT is entered into this 15th day of June, 1988 between the City of El Segundo, hereinafter referred to as the "City," and COLEN & LEE, INC., a California corporation, hereinafter referred to as the "Administrator." WHEREAS, the City has undertaken to self- insure its general and auto liability; and WHEREAS, the Administrator is engaged in the business of administering general and auto liability self - insurance programs; and WHEREAS, the City desires to retain the services of the Administrator to administer a general and auto liability self - insurance program, hereinafter referred to as the "Program," for the City; NOW, THEREFORE, the City hereby retains the services of the Administrator and the Administrator agrees to perform services for the City under the terms and conditions of this Agreement. 1. TERM: This Agreement shall become effective as of June 15, 1988 and shall continue in effect until terminated by the cancellation procedure provided herein. 2. SCOPE OF SERVICES: The Administrator agrees to supervise and administer the Program for the City and shall act as the City's representative in connection with the investigation, adjustment and 1 1960. administration of all general and auto liability claims asserted by third parties against the City. The administrator further agrees to provide the City, during the term of this Agreement, all services more particularly set forth herein. 3. CONFERENCES: The Administrator shall meet with City staff at the beginning of the Program to develop procedures consistent with City policy and to provide orientation and training to City employees involved in the administration of the Program. Thereafter, the Administrator shall meet with City staff every other month to discuss claims and general procedures. 4. CLAIMS ADMINISTRATION: The Administrator agrees to provide supervisory, administrative and adjustment services on liability claims asserted against the City. Such services shall include: A. Screening accident reports for potential claims and initiating contact with claimants. B. Establishing files and setting reserves on new cases. C. Maintaining contact with claimants or their attorneys. D. Deciding upon and initiating a proper course of investigation. E. Periodically reviewing cases for disposition and proper reserving. F. Determining fault. G. Seeking contribution or indemnity from responsible third parties. - 2 - 6 1 H. Evaluating damages and determining settlement value. I. Preparing written reports when recommending settlement in excess of the Administrator's authority or when recommending rejection or denial of a claim. J. Negotiating Settlements. K. Taking releases from claimants. L. Initiating payment of settlements and expenses. M. Sending denial letters to claimants or their attorneys when appropriate. N. Notifying the City's excess liability insurers of all claims which exceed or may exceed the City's self- insurance retention, maintaining liaison between the City and its excess liability insurers on matters affecting the adjustment of such claims and arranging for reimbursement to the City of losses in excess of its self- insurance retention. 0. Closing files when appropriate to do so. 5. INVESTIGATION: The Administrator agrees to provide investi- gative services as follows: A. The Administrator shall conduct office investigation, through the mail and over the phone, which shall include: obtaining written questionnaires or telephone recorded statements from City employees, claimants and witnesses; obtaining police and other official reports; obtaining medical reports from claimants, their doctors or their attorneys; obtaining wage loss information from claimants, their 3 4' 1960 employers or their attorneys; and all other investigation that can be handled effectively from the office. B. The Administrator shall engage, on behalf of the City, the services of independent, outside investigators to conduct all field investigation that is needed to properly handle general and auto liability claims. The selection of outside investigators shall be made from a list approved by the City. C. The Administrator shall, without compromising the quality of investigation, make every attempt to conduct as much investigation from the office as possible before engaging the services of outside investigators and, in the event that outside investigation is necessary, shall closely control outside investigators to minimize expense. D. Outside investigation fees shall be considered an allocated expense. 6. LITIGATION MANAGEMENT: The Administrator agrees to provide the following services with regard to litigated claims: A. The City Attorney shall supervise and directly manage all litigation for the City in conjunction with the City Manager and with the assistance of the Administrator. B. The Administrator shall audit and approve all legal expenses. 4 0. The Administrator shall continue all claims administration and investigation functions. 7. STATISTICAL REPORTS: The Administrator agrees to provide, during the term of this Agreement, the City with a monthly statistical report showing the status of each claim reported to the Administrator, the details of each claim, the remaining reserves for each claim and the details of all claims payments made to date and during the month. This report shall be delivered to the City within twenty (20) days of the close of each calendar month. 8. ALLOCATED EXPENSES: The City agrees to pay for check printing, Index Bureau membership, outside adjusters, outside investigators, defense attorneys, legal costs, police and other official reports, remote photocopy, professional photographers, map makers, film makers, medical experts, engineering experts, accident reconstruction experts, process service, messenger service, court reporters, vocational rehabilitation experts, structured settlement consultants and translators. 9. CONSIDERATION: The City agrees to pay a service fee to the Administrator based on the monthly sum of One Thousand Five Hundred Dollars ($1,500.00) as compensation for ongoing services rendered under this Agreement. Once a year thereafter, the Administrator may increase or decrease the service fee by giving written notice of the change to the City at least ninety (90) days prior to the anniversary date of this '9 Agreement. 10. INDEMNIFICATION: The Administrator shall indemnify, hold harmless, and defend the City from all claims, legal actions, losses, expenses, injuries or damages arising out of the Administrator's actual or alleged negligence or intentional wrongdoing incident to the performance of this agreement. 11. INSURANCE: The Administrator agrees to maintain in force at all times the following insurance: A. Workers' Compensation Insurance covering employees of the Administrator, as required by law. B. Professional Liability Insurance in the amount of One Million Dollars ($1,000,000.00), naming the City as an additional insured. C. A Commercial Blanket Bond in the amount of Five Hundred Thousand Dollars ($500,000.00). D. General liability insurance, in the amount of One Million Dollars (1,000,000.00). E. The City shall be notified, in writing, thirty (30) days prior to any cancellation or reduction in the above coverage. 12. CANCELLATION: This Agreement may be terminated by either party giving to the other, in writing, notice of its intention to cancel this Agreement at least sixty (60) days prior to the date of termination. 6 tunilr 13. RECORDS: The Administrator agrees to establish and maintain, for a period of not less than five (5) years, claim files, logs, transaction documents and all other records associated with the Program. These records shall be the property of the City and shall be available, on five (5) days notice, for review or transfer to another custodian. These records shall not be disposed of or destroyed without the prior, express authorization of the City. 14. NOTICES: All notices, demands, requests, or approvals which are required under this Agreement, or which either the City or the Administrator may desire to serve upon the other, shall be in writing and shall be conclusively deemed served when delivered personally, or forty -eight (48) hours after the deposit thereof in the United States Mail, postage prepaid, registered or certified, addressed as herein provided. A. All notices, demands, requests or approvals from the Administrator to the City shall be addressed to the City of El Segundo, 350 Main Street, El Segundo, California 90245. B. All notices, demands, requests, or approvals from the City to the Administrator shall be given to Colen & Lee, Inc., 1930 South Brea Canyon Road, Suite 100, Diamond Bar, California 91765. 15. CONTRACT ADMINISTRATOR,: All communications to the City shall be given to the Director of Finance. UV 16. WARRANTY: The Administrator warrants and guarantees that all services performed hereunder for the City shall be performed in a manner commensurate with the highest professional standards. 17. ENTIRE CONTRACT: This instrument contains the entire Agreement between the parties relating to the rights herein granted and obligations herein assumed. Any oral representations or modifications concerning this instrument shall be of no force or effect. Subsequent modifications may be made in writing. 18. GOVERNING LAW: The validity of this Agreement and of any of its terms and provisions shall be interpreted and construed pursuant to the laws of the State of California. 19. ATTORNEY FEES: If any action at law or equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the City shall be entitled to reasonable attorney fees in addition to any other relief to which it may be entitled if it prevails. 20. ASSIGNMENT: The Administrator shall not assign, sublet or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations of this Agreement without the prior, written consent of the City. 8 21. CONFLICT OF INTEREST: The Administrator agrees not to accept any employment during the term of this Agreement from any other person, firm or corporation if that employment is likely to result in a conflict between the interests of the City and interests of any third parties. 22. PARTIAL INVALIDITY: If any provision of this Agreement is held by a competent court to be invalid, void or unenforceable, the remaining provisions shall nevertheless continue in full force and effect. EXECUTED at El Segundo, California on the date and year first above written. EL CITY OF/SEGUNDO Mayor APPROVED AS TO FORM: ty Attorney COLEN & LEE, INC.