EXHIBIT 10.5
CATASTROPHE AGREEMENT
This Catastrophe Agreement ("Agreement") dated as of March 1, 1999, is
entered into by and between United States Fire Insurance, a New York domiciled
insurance company, with an office at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, on behalf of itself and its affiliated companies ("Client") and Xxxxxxx
Xxxxxx Claim Services, Inc., a Texas corporation, with an office at 350 Xxxxxxxx
Xxxxx Avenue, Rye, New York 10580 ("Contractor").
That, for and in consideration of the mutual promises and covenants
hereinafter contained, the parties hereto agree as follows:
I. DUTIES AND OBLIGATIONS OF CONTRACTOR
A. Contractor will provide loss adjusting services for Client's real and
personal property losses identified by a catastrophe number and which
are specifically defined in Exhibit A attached hereto and made a part
hereof, occurring from April 1, 1999, to and including March 31, 2000,
within the continental United States.
B. Contractor shall adjust each reported loss, as specifically defined in
Exhibit A to conclusion with adjusters that are qualified, experienced
and appropriately licensed.
C. Contractor shall provide supervision for all adjusted losses unless
Client agrees to provide said supervision directly as described in
Exhibit A.
D. Contractor shall designate an Account Manager to serve as liaison with
Client at no additional charge to Client.
E. Contractor shall procure and maintain for its benefit comprehensive
general liability coverage and umbrella and/or excess liability
coverage with minimum total limits of five million dollars
($5,000,000) combined single limit for property damage and bodily
injury. Contractor shall name Client and all parent and affiliated
companies of Client as additional insureds, as respects this
particular contract on its comprehensive general liability and
umbrella and/or excess liability coverage. Contractor shall also
procure and maintain for its benefit automobile liability coverage in
an amount of not less than one million dollars ($1,000,000) combined
single limit.
F. Contractor shall procure and maintain a fidelity bond covering
Contractor, its officers and employees with a limit of not less than
two million dollars ($2,000,000).
G. Contractor shall procure and maintain for itself and its employees all
insurance coverage required by federal, state or local law, including
workers' compensation insurance and a minimum of $100,000 in
employer's liability coverage. All insurance coverages maintained by
Contractor shall be written by insurers acceptable to the Client.
Contractor shall furnish to Client Certificates of Insurance
evidencing all of the above required coverages and naming Client and
all parent and affiliated companies of Client as additional insureds
as required. Said certificate(s) will contain a provision whereby
thirty (30) days notice must be received by Xxxxxx Xxxxxxx, Claims
Department, United States Fire Insurance Company, 000 Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 prior to cancellation or a material
change in coverage by either Contractor or insurer.
II. DUTIES AND OBLIGATIONS OF CLIENT
A. Client agrees that all losses subject to this Agreement will be
reported to Contractor, unless otherwise agreed with Client. Client
will provide all information relevant to Client's losses to Contractor
in order for Contractor to fulfill its duties and obligations as set
out in this Agreement.
B. Client agrees to compensate Contractor for Service Fees as outlined in
Exhibit A (plus any applicable sales taxes or other applicable taxes)
due and payable to Xxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxx, Xxxxx 00000,
within thirty (30) days of receipt of an adequately documented
invoice.
C. Client agrees to request dedicated adjusters, if required, within
seventy-two (72) hours of the specific catastrophe date.
D. Client agrees that Contractor will have the right to renegotiate the
Service Fees in the event of statutory, regulatory or judicial changes
that require additional activities not contemplated at the inception
of this Agreement.
III. MUTUAL DUTIES AND OBLIGATIONS
A. Indemnification -- Contractor agrees to indemnify and hold harmless
the Client, its directors, officers, employees and from any and all
claims arising out of the performance by Contractor of the services
pursuant to this Agreement. This indemnity and hold harmless shall
apply to any and all claims against Client from any cause whatsoever,
even those arising from the negligence of the Client, active or
passive, excepting only those claims which arise from the sole
negligence of the Client. This indemnity and hold harmless obligation
specifically includes the obligation to pay for any and all defense
costs and attorneys fees.
B. Employment Agreement
1. The parties agree not to solicit, offer employment or employ, any
employee of the other party for one (1) year from date of the last
activity performed under this Agreement without the written
approval of the other party.
2. Contractor, in performance of this Agreement, is acting as an
independent contractor. Personnel supplied by Contractor hereunder
are not Client's personnel or agents, and Contractor assumes full
responsibility for their acts. Contractor shall be solely
responsible for the payment of compensation of Contractor's
employees assigned to perform services hereunder, and such
employees shall be informed that they are not entitled to the
provision of any Client employee benefits. Client shall not be
responsible for payment of workers' compensation, disability
benefits, unemployment insurance and for withholding income taxes
and social security for any Contractor employee, but such
responsibility shall be that of Contractor.
C. Compliance
The parties agree that because the nature and magnitude of any given
catastrophe is an unknown factor, Contractor is nor bound to provide any
set number of personnel to Client but the number both desired by Client
and provided by Contractor will be determined upon the occurrence of the
event and thereafter.
D. Cancellation. Either party may cancel this Agreement upon the
happening of any of the following events.
1. Bankruptcy, insolvency or reorganization for the benefit of
creditors of either party.
2. Default in the payment of any indebtedness under this Agreement.
3. Failure of either party to remedy a breach of contract and provide
evidence thereof within thirty (30) days after receipt of written
notice from the other party.
This right of cancellation belonging to either party may be exercised
without prejudice to any other remedy to which it may be entitled at law
or under this Agreement.
E. Arbitration. Any dispute or difference arising with reference to the
interpretation or effect of this Agreement, or any part thereof,
shall be referred to a Board of Arbitration (the "Board") of two (2)
arbitrators and an umpire.
The members of the Board shall be active or retired disinterested
officers of insurance or reinsurance companies.
One arbitrator shall be chosen by the party initiating the arbitration
and designated in the letter requesting arbitration. The other party
shall respond, within thirty (30) days, advising of its arbitrator. The
umpire shall thereafter be chosen by the two (2) arbitrators. In the
event either party fails to designate its arbitrator as indicated above,
the other party is hereby authorized and empowered to name the second
arbitrator, and the party which failed to designate its arbitrator shall
be deemed to have waived its rights to designate an arbitrator and shall
not be aggrieved thereby. The two (2) arbitrators shall then have thirty
(30) days within which to choose an umpire. If they are unable to do so
within thirty (30) days following their appointment, the umpire shall be
chosen by the manager of the American Arbitration Association and such
umpire shall be a person who is an active or retired or disinterested
officer of an insurance or reinsurance company. In the event of the
death, disability or incapacity of an arbitrator or the umpire, a
replacement shall be named pursuant to the process which resulted in the
selection of the arbitrator or umpire to be replaced.
Each party shall submit its case to the Board within one (I) month from
the date of the appointment of the umpire, but this period of time may
be extended by unanimous written consent of the Board.
The Board shall make its decision with regard to the custom and usage of
the insurance and reinsurance business. The Board is released from all
judicial formalities and may abstain from the strict rules of law. The
written decision of a majority of the Board shall be rendered within
sixty (60) days following the termination of the Board's hearings,
unless the parties consent to an extension. Such majority decision of
the Board shall be final and binding upon the parties both as to law and
fact, and may not be appealed to any court of any jurisdiction. Judgment
may be entered upon the final decision of the Board in any court of
proper jurisdiction.
Each party shall bear the fees and expenses of the arbitrator selected
by or on its behalf, and the parties shall bear the fees and expenses of
the umpire as determined by the party, as above provided, the expenses
of the arbitrators, the umpire and the arbitration shall be equally
divided between the two parties. The arbitrators may allocate any and
all of the costs and fees against the losing party upon a determination
that the position of the losing party was, in whole or in part,
groundless, specious or otherwise without merit or asserted primarily
for the purposes of obfuscation or delay.
F. Governing Law. This Agreement shall be governed by the laws of the
State of Texas.
G. Amendment. This Agreement may be modified or amended only in writing
arid signed by both parties to this Agreement.
H. Severability. Should any provision of this Agreement be declared or
determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal part, term or provision
shall be deemed not a part of this Agreement.
I. Entire Agreement. This Agreement, together with the exhibits attached
hereto, constitutes the entire Agreement between the parties with
respect to the subject matter hereof and any other written or oral
prior agreements, contracts, proposals, representations, statements,
negotiations, understandings, or assurances are superseded hereby.
IN WITNESS WHEREOF, Client and Contractor have caused this Agreement to be
executed by persons authorized to act in their respective names.
UNITED STATES FIRE INSURANCE COMPANY
XXXXXXX XXXXXX CLAIM SERVICES, INC.
By: /s/ XXXX XXXX By: /s/ XXX XXXXXX
---------------------------------------- ----------------------------------------
Its Vice President Its Vice President
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ X. XXXXXXX
---------------------------------------- ----------------------------------------
Its Secretary Witness
EXHIBIT A
XXXXXXX XXXXXX CLAIM SERVICES, INC.
XXXXXXX XXXXXX
FULL ADJUSTMENT CATASTROPHE PROGRAM SCHEDULE
PREPARED FOR XXXX & XXXXXXX INSURANCE COMPANY FOR THE PERIOD COVERING JANUARY 1,
1999 TO DECEMBER 31, 2000.
FEES
WINDSTORM/
FULL COST OF REPAIR HAILSTORM HURRICANE
------------------- ---------- ---------
Erroneous Assignment Denials................................ $ 40.00 $ 40.00
T&E T&E
$.00 -- $500.00............................................. $115.00 $125.00
$500.01 -- $1,000.00........................................ $130.00 $145.00
$1,000.01 -- $1,500.00...................................... $145.00 $165.00
$1,500.01 -- $2,500.00...................................... $175.00 $205.00
$2,500.01 -- $3,500.00...................................... $230.00 $245.00
$3,500.01 -- $5,000.00...................................... $275.00 $300.00
$5,000.01 -- $7,500.00...................................... $365.00 $380.00
$7,500.01 -- $10,000.00..................................... $460.00 $485.00
$10,000.01 -- $15,000.00.................................... $525.00 $595.00
$15,000.01 -- $25,000.00.................................... $675.00 $695.00
$25,000.01 -- $50,000.00.................................... $850.00 $970.00
$50,000.01 and above........................................ T&E T&E
Time element, earthquake, specialty lines (including environmental) losses,
and complicated adjustments, including losses handled by a public adjuster, will
be adjusted at Contractor's prevailing time and expense rates in effect at time
of file activity.
A Member of the Xxxxxxxxxx Xxxxxxx International Network -- Linking You to a
World of Resources
website: xxx.xxxxxxxxxxxxxx.xxx email: xxxxxxxxxxxxx@xx.xxxxxx0.xxx
XXXXXXX XXXXXX CLAIM SERVICES, INC.
FULL ADJUSTMENT CATASTROPHE INCLUDES
- 24 Hour Contact with the Insured
- 48 to 72 Hour Inspection of Property
- Reserve Recommendation to Client in 5 Business Days
- Full Cost of Repair or Replacement of Damage
- Cause of Loss Confirmation
- Estimated Replacement Cost and Actual Cash Value of Risk
- Agreed Claim, involving applicable Depreciation, Coinsurance, Limiting
Clauses, and Deductible
- Diagram if Applicable
- Suggested Salvage Potential
- Suggested Subrogation Potential
- Four (4) Color Photographs
- Loss in excess of $50,000 -- Contact Client Immediately
- Limit Photos to Covered Loss
- First Report in 10 Days
- Every Report thereafter in 30 Days
- Reporting on Xxxxxxx Xxxxxx Form 200-0032
- Property Proof of Loss on losses at or above $50,000
FLAT FEES INCLUDE:
- Driving time and mileage expenses over the first 50 miles driven and
included will be billed at current rates in accordance to additional
miles driven
- Photographs -- $2.00 each for additional over included
- Long distance telephone expenses and fax at $1.00 per sheet
- Bride, toll road and parking expenses
- State and Federal Taxes
- Express mail or delivery
- Public records and outside expert fees
- Any other extraordinary out of pocket expense will be billed on an
actual cost basis
A Member of the Xxxxxxxxxx Xxxxxxx International Network -- Linking You to a
World of Resources
website: xxx.xxxxxxxxxxxxx.xxx email: xxxxxxxxxxxxx@xx.xxxxxx0.xxx
