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Home My WebLink About2018-06-26; City Council; Resolution 2018-107RESOLUTION NO. 2018-107 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING RENEWAL OF THE CITY'S EXCESS INSURANCE FOR WORKERS' COMPENSATION. Exhibit 1 WHEREAS, the city has established a self-insured program for workers' compensation; and WHEREAS, the city's insurance broker has received a renewal quotation for excess workers' compensation insurance coverage; and WHEREAS, upon evaluation of this quotation for excess insurance, the city desires to renew its insurance. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the renewal of the city's excess workers' compensation insurance with Safety National Casualty Corporation, with the premium in the amount of $203,150, is hereby approved and shall be effective July 1, 2018 through June 30, 2019. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 26th day of June, 2018, by the following vote, to wit: AYES: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. NOES: None. ABSENT: None. City of Carlsbad TABLE OF CONTENTS HUB International Directory ............................................................................................. 3 Named Insured Listing and Location Schedule ............................................................... 4 Premium & Exposure Comparison .................................................................................. 5 Excess Workers' Compensation & Employers Liability -Option 1 ................................... 6 Excess Workers' Compensation & Employers Liability -Option 2 ................................... 7 Excess Workers' Compensation & Employers Liability -Option 3 ................................... 8 Rating, Terms & Conditions ............................................................................................ 9 Premium Summary & Authorization to Bind Coverage .................................................. 10 Appendix ....................................................................................................................... 11 • Other Coverages for Discussion • Location Schedule • Terrorism Disclosure • How We Get Paid • The HUB Advantage • Privacy Policy This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 2 ' June 26, 2018 Item #7 Page 5 of 24 HUB INTERNATIONAL DIRECTORY ACCOUNT EXECUTIVE: ACCOUNT MANAGER: PROPERTY & CASUAL TY CLAIMS: WORKERS COMPENSATION CLAIMS: RISK SERVICES: ADDITIONAL HUB CAPABILITIES: EMPLOYEE BENEFITS: PERSONAL LINES: City of Carlsbad Jeff Cruz Direct: 858-255-3261 jeff.cruz@hubinternational.com Vance Morris Direct: 858-373-6979 vance.morris@hubinternational.com Lisa Winnert Direct: 877-712-5246 lisa. winnert@hu binternational. com Jon McPheters Direct: 760-707-5665 jon.mcpheters@hubinternational.com Irene Damsky Direct: 858-373-6927 irene.damsky@hubinternational.com Maggie Osburn Direct: 858-373-6918 Maggie.Osburn@hubinternational.com Suzanne Canfield Direct: 760-707-5633 Suzanne.Canfield@hubinternational.com This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 3 June 26, 2018 Item #7 Page 6 of 24 City of Carlsbad NAMED INSURED AND LOCATION SCHEDULE First Named Insured has specific rights and duties under insurance policies that do not apply to other Named Insured. These duties will be specified in the policies. First Named Insured City of Carlsbad Additional Named Insureds None Please check to ensure all appropriate entities are named. Any entity (including Partnerships, corporations, joint ventures, individuals, etc.) not listed above is not included as a Named Insured. Entities with limited interests in policies, such as those who are to be included as an Additional Insured, Loss Payee, Lessor, or Mortgagee, are listed in the relevant coverage sections. LOCATION SCHEDULE Address City State Zip Description. of Operations See Attached Schedule This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 4 June 26, 2018 Item #7 Page 7 of 24 City of Carlsbad PREMIUM AND EXPOSURE COMPARISON Premium Options 2018-2019 Renewal Options Expiring Option 1 Option 2 Option 3 Item $1,250,000 SIR $1.25M SIR -Police & Fire $1,000,000 SIR 2017 -2018 All Employees $1M SIR -All Other Employees All Employees Total Payroll $ 59,629,511 $ 66,194,087 $ 66,194,087 $ 66,194,087 Premium $ 183,003 $ 203,150 $ 218,374 $ 228,568 Rate Per $100 of Payroll $ 0.3069 $ 0.3069 $ 0.3299 $ 0.3453 % Rate Change N/A 0% 7% 13% % Premium Increase N/A 11% 19% 25% Exposure Comparison Payroll by Class Code Class Code 2017 -2018 2018 -2019 %Change 7706 -Fire Fighters, Non-Volunteer $ 8,068,351 $ 10,608,059 31% 7720 -Police $ 13,283,786 $ 14,351,881 8% 8810 -Clerical $ 2,261,952 $ 3,818,343 69% 8820 -Attorneys -All Employees $ 27,077,623 $ 27,331,549 1% 9410 -Public Agency Employees - Clerical $ 3,556,763 $ 5,133,363 44% 9420 -Public Agency Employees -All Other $ 5,381,036 $ 4,950,892 (8%) Total: $ 59,629,511 $ 66,194,087 11% This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 5 June 26, 2018 Item #7 Page 8 of 24 City of Carlsbad EXCESS WORKERS' COMPENSATION & EMPLOYERS LIABILITY Option 1 Workers' Compensation covers employees' medical and disability benefits, as specified by state laws, resulting from on-the-job injuries. Employer's Liability applies to employee injuries for which you are liable that are not covered under state workers' compensation laws, with certain exceptions defined by the policy. GENERAL INFORMATION Company AM Best Rating Effective Date Expiration Date Premium POLICY LIMITS Coverage Workers Compensation Employers Liability -Bodily Injury by Accident: Employers Liability -Policy Limit (Disease): Employers Liability-Each Employee (Disease): Self-Insured Retention TERMS & CONDITIONS Covered States: Other States: Audit Period: Total Payroll: Minimum Premium Requirement: CA Safety National Casualty Corporation A+, XIV (Admitted) 7/1/2018 7/1/2019 $203,150 Limit Statutory $2 ,000,000 $2 ,000,000 $2,000,000 $1 ,250,000 All Employees All Other States Except AK, ND, OH , WA, WY Annual $66,194,087 90%: $182,835 You must notify us immediately if you hire employees or begin operations in any state not listed in "Covered States" above. "Other States" coverage provides LIMITED, TEMPORARY coverage if you have or begin operations in one of the "Other States" defined above. However, you must notify us IMMEDIATELY of any work in one of the "Other States". Note: No coverage is offered for monopolistic states (ND, OH, WA, and. WY). Coverage for monopolistic states must be arranged with the appropriate state agencies. NOTE: Final premiums and surcharges are subject to payroll verification and change at audit State of Exposure: CA Classification All Employees Rate Per $100 $0.3069 Payroll $66,194,087 This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 6 June 26, 2018 Item #7 Page 9 of 24 City of Carlsbad EXCESS WORKERS' COMPENSATION & EMPLOYERS LIABILITY Option 2 Workers' Compensation covers employees' medical and disability benefits, as specified by state laws, resulting from on-the-job injuries. Employer's Liability applies to employee injuries for which you are liable that are not covered under state workers' compensation laws, with certain exceptions defined by the policy. GENERAL INFORMATION Company AM Best Rating Effective Date Expiration Date Premium POLICY LIMITS Coverage Workers Compensation Employers Liability -Bodily Injury by Accident: Employers Liability -Policy Limit (Disease): Employers Liability -Each Employee (Disease): Self-Insured Retention TERMS & CONDITIONS Covered States: Other States: Audit Period: Total Payroll: Minimum Premium Requirement: CA Safety National Casualty Corporation A+, XIV (Admitted) 7/1/2018 7/1/2019 $218,374 Limit Statutory $2,000,000 $2,000,000 $2,000,000 $1,250,000 Police & Fire $1,000,000 All Other Employees All Other States Except AK, ND, OH, WA, WY Annual $66,194,087 90%: $196,537 You must notify us immediately if you hire employees or begin operations in 1any state not listed in "Covered States" above. "Other States" coverage provides LIMITED, TEMPORARY coverage if you have or begin operations in one of the "Other States" defined above. However, you must notify us IMMEDIATELY of any work in one of the "Other States". Note: No coverage is offered for monopolistic states (ND, OH, WA, and WY). Coverage for monopolistic states must be arranged with the appropriate state agencies. NOTE: Final premiums and surcharges are subject to payroll verification and change at audit State of Exposure: CA Classification All Employees Rate Per $100 $0.3299 Payroll $66,194,087 This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 7 June 26, 2018 Item #7 Page 10 of 24 City of Carlsbad EXCESS WORKERS' COMPENSATION & EMPLOYERS LIABILITY Option 3 Workers' Compensation covers employees' medical and disability benefits, as specified by state laws, resulting from on-the-job injuries. Employer's Liability applies to employee injuries for which you are liable that are not covered under state workers' compensation laws, with certain exceptions defined by the policy. GENERAL INFORMATION Company AM Best Rating Effective Date Expiration Date Premium POLICY LIMITS Coverage Workers Compensation Employers Liability -Bodily Injury by Accident: Employers Liability -Policy Limit (Disease): Employers Liability -Each Employee (Disease): Self-Insured Retention TERMS & CONDITIONS Covered States: Other States: Audit Period: Total Payroll: Minimum Premium Requirement: CA Safety National Casualty Corporation A+, XIV (Admitted) 7/1/2018 7/1/2019 $228,568 Limit Statutory $2,000,000 $2,000,000 $2,000,000 $1,000,000 All Employees All Other States Except AK, ND, OH, WA, WY Annual $66,194,087 90%: $205,711 You must notify us immediately if you hire employees or begin operations in any state not listed in "Covered States" above. "Other States" coverage provides LIMITED, TEMPORARY coverage if you have or begin operations in one of the "Other States" defined above. However, you must notify us IMMEDIATELY of any work in one of the "Other States". Note: No coverage is offered for monopolistic states (ND, OH, WA, and WY). Coverage for monopolistic states must be arranged with the appropriate state agencies. NOTE: Final premiums and surcharges are subject to payroll verification and change at audit State of Exposure: CA Classification All Employees Rate Per $100 $0.3453 Payroll $66,194,087 This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 8 June 26, 2018 Item #7 Page 11 of 24 City of Carlsbad- RATING INFORMATION, TERMS & CONDITIONS -ALL OPTIONS TERMS & CONDITIONS • Safety National can no longer offer the $750,000 retention for All Other Employees • Minimum Premium for the 2018-2019 policy term is 90% SUBJECTIVITIES • None PAYMENT TERMS • Premium due in full after binding (Premium financing available if needed) This proposal is for illustration purposes only, All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 9 June 26, 2018 Item #7 Page 12 of 24 City of Carlsbad PREMIUM SUMMARY & AUTHORIZATION TO BIND COVERAGE Premiums shown here are estimated annual premiums. They are based on the information you provided to us. In the event further underwriting information is received which changes the exposures, premium may be subject to change. Final premiums can be affected by audits, periodic reporting forms, retro and dividend plans, changes in your operations (new buildings, vehicles, equipment) and other factors. ESTIMATED ANNUAL PREMIUMS Coverage Excess Workers' Compensation -Option 1 Excess Workers' Compensation -Option 2 Excess Workers' Compensation -Option 3 Please Select Preferred Option to Bind: Option 1 D Option 2 D Option 3 D Carrier Safety National Safety National Safety National Proposal Accepted by: ------------------ Renewal Premium $182,835 $196,537 $205,711 Date: ________ _ __ I approve of receiving policies and other documentation, when available, via electronic mail. Please Initial. ~ Please consider the ENVIRONMENT It is the policy of HUB International, on all new or renewal business, to collect premiums in a timely manner. Deposit premiums for new policies are due with the policy order. Deposits for renewal are also due with the policy order, however, upon prior agreement with your agent, the due date may be extended up to (5) days from the renewal date, depending on the carrier. No client with an overdue outstanding balance will be renewed without written confirmation from the HUB International Accounting Department. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 10 June 26, 2018 Item #7 Page 13 of 24 City of Carlsbad APPENDIX This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 11 June 26, 2018 Item #7 Page 14 of 24 City of Carlsbad LOCATION SCHEDULE Location Location Address City State City Hall 1200 Carlsbad Village Dr. Carlsbad CA Faraday Center 1635 Faraday Ave Carlsbad CA Safety Center 2560 Orion Way Carlsbad CA Fire Station #1 1275 Carlsbad Village Dr Carlsbad CA Fire Station #2 1906 Arenal Dr Carlsbad CA Fire Station #3 3701 Catalina Dr Carlsbad CA Fire Station #4 6885 Batiquitos Dr Carlsbad CA Fire Station #5 2540 Orion Way Carlsbad CA Fire Station #6 7201 Rancho Santa Fe Road Carlsbad CA Dove Library 1775 Dove Lane Carlsbad CA Georgina Cole Library 1250 Carlsbad Village Dr Carlsbad CA Learning Center 3368 Eureka Place Carlsbad CA Communications Office/Elmwood 2955 Elmwood St Carlsbad CA Alqa Norte Aquatics Center 6565 Alicante Rd Carlsbad CA Harding Center 3096 Harding St Carlsbad CA Swim Complex 3401 Monroe St Carlsbad CA Holiday House 3235 Eureka Place Carlsbad CA Kruqer House 3218 Eureka Place Carlsbad CA Staqecoach Park 3420 Camino de los Coches Carlsbad CA Calavara Hills Park 2997 Glasgow Dr Carlsbad CA Pine Avenue Community Center 3209 Pine Avenue Carlsbad CA Senior Center 799 Pine Ave Carlsbad CA Carrillo Ranch 6200 Flyinq LC Lane Carlsbad CA Parks Maintenance 1166 Carlsbad Villaqe Dr Carlsbad CA City Maintenance Yard 405 Oak Ave Carlsbad CA Fleet Maintenance 2480 Impala Dr Carlsbad CA Safety Traininq Center 5750 Orion St Carlsbad CA District 5950 El Camino Real Carlsbad CA This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 12 Zip 92008 92008 92008 92008 92009 92009 92009 92008 92009 92009 92008 92008 92008 92009 92008 92008 92008 92008 92009 92008 92008 92008 92008 92008 92008 92008 92008 92008 June 26, 2018 Item #7 Page 15 of 24 City of Carlsbad OTHER COVERAGES FOR CONSIDERATION These items represent some of the possible gaps or deficiencies in the coverage currently provided. We recommend careful review of this list. We will be pleased to provide a detailed analysis of items if interested. PROPERTY Commercial Property -The Commercial Property policy covers your buildings, contents or specified other property against perils defined by the form, subject to the terms of the policy. Coverage for off-premises property is limited. Equipment Breakdown (Boiler & Machinery) -Insures against sudden and accidental loss or damage to "covered objects" defined by the policy. Coverage for consequential business income and extra expense losses is optional. Inland Marine/Equipment Floater -Insures against physical damage to specified mobile equipment and tools. Inland Marine/Transportation (Cargo) -Covers merchandise and/or cargo shipped at your risk while in transit by land or air. Builders Risk/Installation Floater -Builders Risk insures against loss of or damage to a new building or structure under construction, or an existing structure undergoing additions, alterations, or repairs. The Installation Floater covers supplies and/or materials to be used in construction. Coverage ceases at events defined by the policy. Electronic Data Processing -Insures computer equipment and media for broader perils than the property policy, and covers the cost of data restoration and program replacement. Coverage for extra expense, business interruption and equipment in transit is optional. Accounts Receivable -Indemnifies you for the cost to recreate records of accounts receivable if destroyed, lost or damaged by covered causes of loss as defined in the policy. Valuable Papers -Indemnifies you for the cost of replacing or reproducing business records that are lost, destroyed or damaged by a covered cause of loss. Earthquake -California Earthquake coverage is available upon request. Flood -Coverage for damage to property caused by flood. CASUALTY Commercial General Liability -Applies to bodily injury or property damage arising from your negligence in business operations, subject to exclusions. The liability policy does not serve as a warranty for your work. Commercial Auto Liability -Insurance that protects the insured against financial loss because of legal liability for automobile-related injuries to others or damage to their property by an auto. Hired and Non Owned Auto Liability should also be considered as this includes not owned, leased, hired, rented, or borrowed vehicles being used in the name of the insured's business. Garagekeepers Liability -Covers the liability exposures that arise from garage operations and the use of specified vehicles. Also covers physical damage to specified vehicles. Business Travel Accident -Supplemental Coverage for employees while on business travel. Product Recall -Insurance coverage for the cost of getting a defective product back under the control of the manufacturer or merchandiser that would be responsible for possible bodily injury (Bl) or property damage (PD) from its continued use or existence. Environmental Liability -covers costs related to pollution. This can include the costs of brownfield restoration and cleanup, liability for injuries and deaths caused by pollution . This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 13 June 26, 2018 Item #7 Page 16 of 24 City of Carlsbad OTHER COVERAGES FOR CONSIDERATION (CONTINUED) Liquor Liability -Covers your liability for injury arising out of the selling, servicing or furnishing of any alcoholic beverage. Foreign Voluntary Workers Compensation (FVWC) Coverage -Provides coverage for lnsured's employees working outside of the United States or where Insured maintains a physical location in another country. Coverage typically covers three categories of workers: U.S. hires or "expats", Third country nationals (TCNs), and Local nationals. EXECUTIVE LIABILITY Directors and Officers Liability (D&O) protects directors and officers of public, private, and not-for-profit corporations against loss (damages and defense costs) arising out of their status or conduct as directors or officers. Common claims allege breach of duty, security law violations, and unfair competition. Employment Practices Liability (EPL) protects companies and individuals against loss (damages and defense costs) arising out of employment practice disputes. Common claims allege discrimination, sexual harassment, wrongful termination, and wrongful discipline. Fiduciary Liability -Liability for those accused of wrongdoing in their capacity as a fiduciary, related to ERISA plans Crime -Protects organizations from loss of money, securities, or inventory resulting from crime. Common Crime insurance claims allege employee dishonesty, embezz!ement, forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, and other criminal acts. Kidnap, Ransom & Extortion -Reimbursement paid to the company for expense incurred in paying a Kidnapping Ransom or an Extortion Threat. Cyber & Privacy Liability -Failure to prevent the transmission of a computer virus, failure to provide authorized users with access to your website or your computer communications network and failure to prevent unauthorized access to or use of electronic data containing private or confidential information to others. Professional Liability -Covers your legal liability for claims arising out of your rendering or failure to render professional services specified in the policy. Representations & Warranties -Coverage provided either to the buyers or the sellers during an M&A transaction for alleged breaches of the negotiated reps & warranties of the purchase & sale agreement. Regulatory Billing Procedures -Legal expense coverage provided to entities that bill state & federal government programs for reimbursement. . Excess Side A Differences In Conditions (DIC) -Additional coverage provided to individual Directors & Officers when no other form of indemnification is available to them. The policy also provides drop down coverage in the event of a wrongful denial of an underlying D&O carrier. OTHER Political Risk Coverage -Includes different types of policies risk such as: Political violence such as revolution, insurrection, civil unrest, terrorism or war Governmental expropriation of confiscation of assets Governmental frustration or repudiation of contracts Wrongful calling of letters of credit or similar on-demand guarantees Business Interruption Inconvertibility of foreign currency or the inability to repatriate funds Trade Credit -Protection of accounts receivable from loss due to credit risks such as protracted default, insolvency and bankruptcy damage. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 14 June 26, 2018 Item #7 Page 17 of 24 City of Carlsbad OTHER COVERAGES FOR CONSIDERATION (CONTINUED) Trade Disruption -Coverage to address shortcomings in traditional insurance for firms that depend on global supply chains. Reputational Risk -Coverage to address the risk that negative publicity regarding an institution's business practices will lead to a loss of revenue or increased litigation. EXCESS LIMITS Excess/Umbrella Liability -Covers catastrophic liability losses that exhaust the specified underlying liability policy limits. Umbrella Insurance differs from Excess in that it may drop-down to fill gaps that exist in underlying liability policies. Excess Limits -Excess Limits are available in the market place for all coverages upon request from the client. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 15 June 26, 2018 Item #7 Page 18 of 24 City of Carlsbad DISCLOSURE PURSUANT TO TERRORISM RISK INSURANCE ACT Terrorism Coverage and Premium In accordance with the federal Terrorism Risk Insurance Act (as amended "TRIA"), we are required to make coverage available under your policy for "certified acts of terrorism." The actual coverage provided by your policy(ies) will be limited by the terms, conditions, exclusions, limits, and other provisions of your policy(ies), as well as any applicable rules of law. The portion of your premium attributable to this terrorism coverage is shown in the premium section(s) of this quote proposal." Definition of Certified Act of Terrorism A "certified act of terrorism" means an act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism under TRIA. The criteria contained in TRIA for a "certified act of terrorism" include the following: 1. The act results in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to TRIA; and 2. The act results in damage within the United States, or outside the United States in the case of certain air carriers or vessels or the premises of an United States mission; and 3. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals acting as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Disclosure of Federal Share of Terrorism Losses The United States Department of the Treasury will reimburse insurers for 85% of that portion of insured losses attributable to certified acts of terrorism that exceeds the applicable insurer deductible. However, if aggregate industry insured losses under TRIA exceed $100 Billion in a Program Year (January 1 through December 31), the Treasury shall not make any payment for any portion of the amount of such losses that exceeds $100 billion. The United States government has not charged any premium for their participation in covering terrorism losses. Cap on Insurer Liability for Terrorism Losses If aggregate industry insured losses attributable to "certified acts of terrorism" under TRIA exceed $100 Billion in a Program Year (January 1 through December 31), and we have met, or will meet, our insurer deductible under TRIA, we shall not be liable for the payment of any portion of the amount of such losses that exceed $100 billion. In such case, your coverage for terrorism losses may be reduced on a pro-rata basis in accordance with procedures established by the Treasury, based on its estimates of aggregate industry losses and our estimate that we will exceed our insurer deductible. In accordance with the Treasury's procedures, amounts paid for losses may be subjectto further adjustments based on differences between actual losses and estimates. 4358075_1 This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 16 June 26, 2018 Item #7 Page 19 of 24 City of Carlsbad HOW WE GET PAID HUB International takes pride in the services our brokerages provide to you, our client, for insurance brokerage and other related services. For our efforts we are compensated in a variety of ways, primarily in the form of commissions and contingency amounts paid by insurance companies and, in some cases, fees paid by clients or third parties. The means by which we are compensated are described below. Commission Income: Commission, normally calculated as a percentage of the premium paid to the insurer for a specific policy, is paid to us by the insurer for the distribution and servicing of your insurance policy. Our commission is included in the premium paid by you. The individuals at HUB International who place and service your insurance may be paid compensation that varies directly with the commissions we receive. Contingency Income: We also receive income through contingency arrangements with most insurers. They are called 'contingent" because to qualify for payment we normally need to meet certain criteria, usually measured on an annual basis. Contingency arrangements vary, but payment is normally the result of growing the business by attracting new customers, helping the insurance company gather and assess underwriting information, achieving certain Joss or claims results and/or working to renew the policies of existing insureds. There is generally no meaningful method to determine the exact impact that any particular insurance policy has on contingency arrangements; however, brokers tend to receive higher contingency payments when they grow their business and retain clients through better service. In other words, the amount of earned contingency income depends on the overall size and/or profitability of a group of accounts, as opposed to the placement or profitability of any particular insurance policy. For this reason, the individuals involved in placing or servicing insurance are rarely compensated directly for the contingent income that we receive. Supplemental Commissions: Some insurance companies have recently replaced contingent commissions with supplemental commissions. These commissions, in fixed amounts, are established annually in advance based on historical performance measured by criteria comparable to those by which contingent commissions are calculated. We refer to these commissions as guaranteed supplemental commissions, or "GSCs". Fees Paid by Clients: On occasion, with more complex business insurance programs and where additional resources, products or services are appropriate, a fee may be negotiated for placement of insurance coverage or additional services. Fees charged for the placement of insurance will generally be outlined in a proposal and approved, usually in writing, prior to the insurer binding coverage. On occasion, we may receive both commissions and client-paid fees for placing insurance, which generally will be disclosed in writing to you in advance. In certain circumstances clients pay us mutually agreed-upon fees for additional services, such as third party administration of employee benefits or workers' compensation programs. Wholesale Operations: We own wholesale insurance brokerages in both the U.S and Canada. These are intermediaries through which other brokers, typically retail brokers that have a relationship and deal directly with their clients, place coverage. Our own retail brokers may place client policies through HUB-owned wholesale brokers. In such cases, both the HUB retail broker and the HUB wholesale broker will earn commissions, and the client's premium payment is generally not impacted. Ordinarily, wholesale brokers, whether owned by HUB International or not, are included in the transaction because they offer products not available through normal brokerage retail channels that are particularly suitable to a client's needs. Other Compensation and Benefits: We may receive revenue or further benefits from our insurance brokerage activities in other ways, including, but not limited to, from insurance company promotional events, payments from insurers for promotional marketing and/or employee training and development, fees or a percentage of the interest paid to us for the administration of premium finance contracts, interest paid to us by financial institutions earned on fiduciary or trust accounts in which we hold your premium payments pending remittance to the insurance company, and fees paid to us for policy and/or claims administration and/or loss control services that we provide. Customer Centric Carriers: We have access to the products and services of hundreds of insurers; however, we believe our ability to provide the best combination of products, service, value, and ongoing access to capacity is enhanced by focusing on a manageable number of carrier relationships. These strategic relationships include many of the most respected national and regional insurance companies in the insurance industry (the "Strategic Carriers"). Although we will continue to access our other insurance company relationships where appropriate, we expect that many of our clients' insurance needs may be met through the Strategic Carriers. The Strategic Carriers may pay us enhanced compensation, which we intend to use in part to invest in initiatives to improve our ability to serve our customers and to optimize their insurance buying experience. A portion of any enhanced compensation from our Strategic Carriers may be used to incentivize our employees to prioritize, investigate, and access the products and services of our Strategic Carriers for the purpose of consolidating the number of insurance markets with which we deal, while at the same time addressing the needs of our clients. In limited circumstances, our employees may serve on boards or committees of these or other insurers with whom policies are placed. More information regarding our Strategic Carrier relationships is available upon request from your HUB International account executive or by visiting our website at www.hubintemational.com. Our goal is to be your insurance brokerage of choice. We know you have many brokerages to choose from, so to earn your confidence, we hold ourselves to the highest standard of service, a standard reflected in our written Client Commitment -we call it "The HUB Advantage." We hope you will review the principles embodied in The HUB Advantage, a copy of which is attached for your convenience. You should also feel free to visit our website at www.hubintemational.com for more information regarding HUB International and how we do business. Please also feel free to ask any questions about our compensation generally, or as to your specific insurance proposal or placement, by contacting your account executive directly, or by calling our client hotline at 1-866-857-4073. We want you to choose a HUB International broker to be your insurance advisor-and we intend to make your decision an educated one. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 17 June 26, 2018 Item #7 Page 20 of 24 City of Carlsbad ABOUT HUB HUB International is a leading brokerage providing a broad array of property, casualty, risk management, life and health, employee benefits, investment and wealth management products and services across North America . . We serve our client's best interest through dynamic people, products and services. It's simple. We represent you, the buyer. Our business model differs from our competitors in many ways. Each geographic hub is intended to be a stand alone servicing entity, providing the services and expertise to various target industries that are prominent in each geographic region. We employ information technology to help clients manage risk, meet employee benefit goals, manage claims and save money. We have clearly outlined our proposed coverage's and services for your review and consideration. We trust you will find this proposal to be accurate and detailed in nature, and we look forward to working with you . THE PURPOSE OF THIS PROPOSAL A commercial insurance program is often complicated. We prepared this insurance proposal to briefly and simply summarize your program. Any proposal sacrifices some detail for the sake of expediency. Since we could not restate your policies verbatim, we outlined the major features and provisions to provide you with a guide to your insurance program. INFORMATION YOU PROVIDE We have relied solely on the information you provided us to prepare this proposal. If any of the information you provided is inaccurate, the terms and conditions, premium , or event the availability of the insurance summarized here may be subject to change. The quality of your insurance program depends on the accuracy of the information you provide us. There will be times when we require additional information to clarify our understanding of your business. If at any time you have chan·ges in your business operations, please notify us as soon as possible. This will help us prevent gaps in coverage, which in turn could lead to uninsured losses. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 18 June 26, 2018 Item #7 Page 21 of 24 The HUB Advantage Our Client Commitment City of Carlsbad HUB International is dedicated to maintaining and upholding the highest standards of ethical conduct and integrity in all of our dealing with you, our client. We want to be your trusted risk advisor, and as such, we need to earn your confidence. So we are making a promise. We call it The HUB Advantage. Our mission is to make the advantage yours -and this is our commitment. >-We strive to secure the most favorable terms from insurers, taking into account all of the circumstances -the risk you need to insure, the cost of insurance, the financial condition of the insurer, the insurer's reputation for service, and any other factors that are specific to your situation. >-We are open and honest as to how we are paid for placing your insurance. Our answers to your questions will be forthright and understandable. When we intend to seek a fixed fee for our efforts, we will disclose it to you in writing and obtain your approval prior to coverage being bound. >-You make the ultimate decision as to both the terms of insurance and the company providing your coverage. Our objective is to provide you with choices that meet your insurance needs, and to educate you so your decision is fully informed and best suited to your circumstances. >-We take our responsibility to our customers very seriously. If at any time you feel that we are not fulfilling your expectations -that we are not meeting our Client Commitment -please contact your account executive or call our toll free client hotline at 1-866-857-4073, and your concerns will be addressed as soon as possible. The HUB Advantage. The privilege is ours, but the advantage is yours. Th is proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 19 June 26, 2018 Item #7 Page 22 of 24 PRIVACY POLICY FACTS WHAT DOES HUB INTERNATIONAL LIMITED ("HUB") DO WITH YOUR PERSONAL INFORMATION? Why? Financial companies choose how they share your personal information. Federal law gives consumers and clients the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. What? The types of personal information we collect and share depend on the product or service you have with us. This information can include: . your name, address and social security number . . your payment history and claims information . . information from other reporting c!gencies and state and federal government agencies, such as state motor vehicle departments. . information from other sources, such as your employer, information clearinghouses, medical or health care providers and/or other third parties. How? All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Hub may share; and whether you can limit this sharing. Reasons we may share your personal information: May Hub share? Can you limit this sharing? For our everyday business purposes -Yes No such as to maintain or service your insurance account(s), report to credit bureaus, to process or service requested or authorized transactions, to secure quotations for insurance, to obtain insurance coverage or to report or process claims. We may also disclose your health, medical conditions or treatment information as necessary to process or service requested or authorized transactions or as otherwise permitted or required by law. For our marketing purposes -Yes No to offer our products and services to you. For joint marketing with other financial companies Yes No For our affiliates' everyday business purposes -information about your transactions and Yes No experiences, to process or service requested or authorized transactions, such as to secure quotations for insurance, obtain insurance covera~e or to report or process claims. For our affiliates' evervdav business practices -information about vour creditworthiness. Yes Yes For our affiliates to market to you Yes Yes For nonaffiliates to market to you Yes Yes To Limit Our Sharing You can contact us at any time to limit our sharing. To do so, call (877) 825-2681 . You may also write to our Chief Legal Officer at the address shown at the bottom of this notice. When you are no longer our customer, we may continue to share your information as described in this notice. Questions? Call (877) 825-2681 or go to www.hubinternational.com. Who we are Who is providing this This notice is provided by Hub and its subsidiaries and operating divisions listed below: notice? • California Coastal Insurance • Hub International Insurance Services Inc. • I Hub International Investment Services Inc . • Hub International Transportation Insurance Services Inc . • lntercare Insurance Solutions, Inc . This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 20 June 26, 2018 Item #7 Page 23 of 24 What we do How does Hub protect my To protect your personal information from unauthorized access and use, we use security measures that comply personal information? with federal law. These measures include computer safeguards and secured files and buildings. We restrict access to such information to those employees or service providers who need to know such information in order to provide the requested services or products. How does Hub collect my We collect your personal information, for example: personal information? When you submit an application or other completed forms that we receive from you . • • Through your transactions with us . • From consumer or other reporting agencies and state and federal government agencies, such as state motor vehicle departments. . From other sources, such as your employer, information clearinghouses, medical or health care providers and/or other third parties. We also collect your personal information from others, such as credit bureaus, affiliates or other companies. Why can't I limit all sharing? Federal law gives you the right to limit only: • Sharing for affiliates' everyday business purposes -information about your creditworthiness . • Affiliates from using your information to market to you . . Sharing for nonaffiliates to market to you . State laws and individual companies may give you additional rights to limit sharing. What if there is more than This notice describes our privacy practices for both current and former customers. If there is more than one one insured on a policy? person insured under a policy, this policy will be sent only to the named insured on that policy, but applies to all insureds. Definitions Affiliates Companies related by common ownership or control. They can be financial and nonfinancial companies. . Affiliates include the family of insurance brokerage and other financial services companies owned by Hub. Nonaffiliates Companies not related by common ownership or control. They can be financial and nonfinancial companies. Joint Marketing A formal agreement between nonaffiliated financial companies that together market financial products or services to you. • Our joint marketing partners include categories of companies such as insurance companies or banks. Other important information This notice should not be construed as any notice required to be sent by the Health Insurance Portability and Accountability Act. If you have additional questions you can write to us at: Chief Legal Officer Hub International Limited 300 North LaSalle Street, 17th Floor Chicago, IL 60654 Please include your name, address, telephone number and email address whenever you contact us, including by email. This helps us handle your request correctly. This proposal is for illustration purposes only. All coverages are subject to term, conditions, limitations and exclusions of the actual policy. In the event of discrepancy between this proposal and the policy, the policy will supersede this proposal. 21 June 26, 2018 Item #7 Page 24 of 24