Workers Compensation and Employers Liability Coverage Agreement. Workers Compensation and Employers Liability Coverage Agreement

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1 No. WCEL-LCA-SDRMA Certain words appears in bold face type. There are defined in the Definitions section of this Workers Compensation and Employers Liability Coverage Agreement. COVERAGE AGREEMENT I. APPLICATION OF MEMORANDUM We, the Special District Risk Management Authority (hereinafter SDRMA ), in return for the payment of the contributions as they become due, agree to provide workers' compensation coverage and employer liability coverage, subject to all of the terms and conditions of this Memorandum and the Sixth Amended Joint Powers Agreement executed by us and the Agency (and amendments thereto or amended versions thereof), from the date of this Memorandum of Coverage until such coverage s are terminated as provided in said documents. This Memorandum applies to Loss sustained by the Covered Party because of liability imposed upon the Covered Party by: A. The Workers Compensation Act of each state named on the Declarations page issued by SDRMA; or B. The Workers Compensation Act of a state not named in the Declarations page issued by SDRMA, provided that the state(s) named in the Declarations page issued by SDRMA is the state(s) of the injured Employee s normal employment or residence; or C. Employers Liability ; on account of Bodily Injury or Occupational Disease sustained by an Employee of the Covered Party, while engaged in operations of the Covered Party, as a result of an Occurrence, taking place during the Coverage Period and while this Memorandum is in force. The indemnity afforded by this Memorandum under Coverage Agreement I C for Loss because of liability imposed for Employers Liability applies only as respects such operations in the states named in the Declarations page, including Employees who are employed and regularly engaged in such operations in the named states but who may be temporarily outside the named state(s) in connection with such operations within the named state. As respects liability imposed by Employers Liability, SDRMA shall have no obligation to indemnify the Covered Party for damages imposed in any lawsuit brought in, or any judgment rendered by, any court outside of the United States of America, its territories or possessions, or Canada, or to any action on such judgment wherever brought. II. RETENTION AND INDEMNITY A. Workers Compensation As respects Loss which the Covered Party sustains as a result of each Occurrence, SDRMA shall retain Loss in the amount of the program retention, as specified in the Coverage Limits identified in the Declarations page issued by SDRMA, if any. Notwithstanding the application of this Memorandum to Loss sustained by the Covered Party under Subsections A, B and C of Coverage Agreement I, the maximum amount of the Covered Party s Retention, if any, and the maximum limit of SDRMA s liability hereunder, shall not exceed the amounts specified in COVERAGE LIMITS of the Declarations page issued by SDRMA Workers Compensation Coverage Documents Page:1 of 9 Tel

2 A. Workers Compensation, 1. How This Coverage Applies: This workers compensation coverage applies to Bodily Injury by accident or Occupational Disease. Bodily Injury by accident or Occupational Disease includes resulting death. a. The Bodily Injury or Occupational Disease must arise out of an occurrence in the course of the injured Employee s employment by the Covered Party. b. The employment must be necessary or incidental to the Covered Party s work in California. c. Bodily Injury by accident or Occupational Disease must occur during the Coverage Period. d. Occupational Disease must be caused or aggravated by the conditions of the employment. The employee s last day of last exposure to the conditions causing or aggravating such Occupational Disease must occur during the Coverage Period. e. This Memorandum shall apply to loss on account of Bodily Injury by accident or Occupational Disease sustained by volunteer workers while acting within the scope of their duties for or on behalf of the Covered Party, provided that prior to the Occurrence, the Governing Board of the Covered Party has adopted a resolution as provided in Division 4, Part 1, Chapter 2, Article 2, of the California Labor Code, declaring such volunteer workers to be employees of the Covered Party for purposes of Workers Compensation Act. ; or provided that such volunteer workers are statutorily deemed by the Workers Compensation Act to be Employees for purposes of workers compensation. 2. SDRMA Will Pay: SDRMA will pay promptly when due the benefits required of the Covered Party by the Workers' Compensation Act of the State of California or of another state not named in the Declarations page issued by SDRMA provided that California is the state of the injured Employee s normal employment or residence. 3. SDRMA Will Defend: SDRMA has the right and duty to defend at its expense any claim, proceeding or suit against the Covered Party for benefits payable under this coverage. SDRMA has the right to investigate and settle these claims, proceedings or suits. SDRMA has no duty to defend a claim, proceeding or suit that is not covered under this coverage. 4. SDRMA Will Also Pay: SDRMA will also pay these costs, in addition to other amounts payable under this coverage, as part of any claim, proceeding or suit SDRMA defends: a. Reasonable expenses incurred at our request, but not for loss of earnings; b. Premiums for bonds to release attachments and for appeal bonds in bond amounts up to the amount payable under this coverage; c. Litigation costs taxed against the Covered Party ; d. Interest on a judgment as required by law until SDRMA offers the amount due under this coverage; and e. Expenses SDRMA incurs, including defense costs. 5. Other Insurance: SDRMA will not pay more than its share of benefits and costs covered by both this coverage and other insurance or self-insurance. Subject to any limits of liability that may apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is exhausted, the shares of all remaining insurance will be equal until the loss is paid. 6. Payments The Covered Party Must Make: The Covered Party is responsible for any payments in excess of the benefits regularly provided by the Workers' Compensation Act, including those required because of: a. The Covered Party s serious and willful misconduct; b. The Covered Party s knowingly employing an Employee in violation of law; Workers Compensation Coverage Documents Page:2 of 9 Tel

3 A. Workers Compensation, c. The Covered Party s failure to comply with a health or safety law or regulation; d. The Covered Party s discharge, coercion, or other discrimination against any Employee in violation of the Workers' Compensation Act or any other law. e. Of claims relating to or in any way arising out of California Labor Code Section 132(a); f. The Covered Party s liability under Section 4557 of Division IV of Labor Code of the State of California, by reason of injury to an employee less than sixteen years of age and illegally employed at the time of injury. If SDRMA makes any payments other than or in excess of the benefits regularly provided by the Workers Compensation Act on the Covered Party s behalf, the Covered Party will promptly reimburse SDRMA. 7. Recovery From Others: SDRMA has the right on behalf of the Covered Party, and the rights of persons entitled to the benefits of this coverage, to recover SDRMA s payment from anyone liable for an injury covered by this coverage. In seeking such recovery, SDRMA shall be acting as the designated representative of that Covered Party. All rights of recovery shall remain with the Covered Party such that there is no automatic assignment or transfer of the original claim. At SDRMA s request, the Covered Party shall assign its rights of recovery to SDRMA. All sums recovered under this provision, whether the Covered Party has assigned its rights to SDRMA or not, shall be applied to reimburse SDRMA for payments made pursuant to this agreement. The Covered Party will do everything necessary to protect those rights for SDRMA and will help SDRMA enforce them. 8. Statutory Provisions: These statements apply where they are required by law: a. As between SDRMA and an injured worker, SDRMA has notice of the injury when the Covered Party has notice. b. The Covered Party s default or the Covered Party s bankruptcy or insolvency after an injury occurs will not relieve SDRMA of SDRMA s duties under this coverage. c. SDRMA is directly and primarily liable to any person entitled to the benefits payable by this coverage. These persons may enforce SDRMA s duties; so may an agency authorized by law. Enforcement may be against SDRMA or against the Covered Party and SDRMA. d. Jurisdiction over the Covered Party is jurisdiction over SDRMA for purposes of the Workers' Compensation Act. SDRMA is bound by decisions against the Covered Party under that law subject to the provisions of this Memorandum that are not in conflict with that law. Nothing in these paragraphs relieves the Covered Party of the Covered Party s duties under this Memorandum. 9. Exclusions: This Coverage shall not apply to: a. The Covered Party s obligation to pay salary in lieu of temporary disability benefits as required by Labor Code Section 4850 or the Covered Party s obligation to pay wages or salary as required by Education Code Sections and 45192, except to the extent that the Covered Party would be obligated to pay temporary disability benefits if Labor Code Section 4850 or Education Code Sections and did not apply; b. The Covered Party s obligations pursuant to Labor Code Section 4856; c. Punitive or Exemplary Damages, fines, penalties assessed against or imposed upon Covered Party : 1. On account of Bodily injury or Occupational Disease sustained by any Employee ; or Workers Compensation Coverage Documents Page:3 of 9 Tel

4 A. Workers Compensation, 2. On account of the conduct of the Covered Party or any of its agents (i) in the investigation, trial or settlement of any claim for benefits under the applicable Worker s Compensation Act or for damages at law, or (ii) in failing to pay or delaying the payment of any such benefits or damages; or 3. On account of violation of any statute or regulation; or 4. On account of Bodily Injury or Occupational Disease intentionally caused or aggravated by the Covered Party ; or 5. On account of Bodily Injury arising out of termination of employment; or 6. On account of Bodily Injury arising out of the coercion, demotion, reassignment, discipline, defamation, harassment or humiliation of, or discrimination against any Employee. B. Employers Liability 1. How This Coverage Applies: This employers liability insurance applies to Bodily Injury by accident or Bodily Injury by Occupational Disease. a. The Bodily Injury and/or Occupational Disease must arise out of and occur in the course of the injured employee s employment by the Covered Party. b. The employment must be necessary or incidental to the Covered Party s work in the State of California. c. Bodily Injury by accident or Occupational Disease must occur during the coverage period. d. Bodily Injury by Occupational Disease must be caused or aggravated by the conditions of the Employees employment with the Covered Party. The employee s last day of last exposure to the conditions causing or aggravating such Bodily Injury by Occupational Disease must occur during the policy period. e. If the Covered Party is sued, the original suit and any related legal actions for damages for Bodily Injury by accident or by Occupational Disease must be brought in the United States of America, its territories or possessions, or Canada. 2. SDRMA Will Pay: SDRMA will pay all sums the Covered Party legally must pay as damages because of Bodily Injury by accident or Occupational Disease to the Covered Party s Employees, provided that the Bodily Injury by accident or Occupational Disease is covered by this employers liability coverage. The damages SDRMA will pay, where recovery is permitted by law, include damages: a. For which the Covered Party is liable to a third party by reason of a claim or suit against the Covered Party by that third party to recover the damages claimed against such third party as a result of injury to the Covered Party s Employee ; and b. For care and loss of services; and c. For consequential Bodily Injury or Occupational Disease to a spouse, child, parent, brother, or sister of the injured Employee, provided that these damages are the direct consequence of Bodily Injury or Occupational Disease that arises out of and in the course of the injured Employee's employment by the Covered Party ; and d. Because of Bodily Injury or Occupational Disease to the Covered Party s Employee that arises out of and occurs in the course of employment claimed against the Covered Party in a capacity other than as employer. 3. Exclusions: This Coverage shall not apply to: a. Liability assumed under a contract; Workers Compensation Coverage Documents Page:4 of 9 Tel

5 B. Employers Liability, b. Bodily Injury or Occupational Disease to an Employee while employed in violation of law with the Covered party s actual knowledge or the actual knowledge of any of the Covered Party s executive officers; c. Any obligation imposed by a workers' compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law; d. Bodily Injury or Occupational Disease intentionally caused or aggravated by the Covered Party ; e. Bodily injury or Occupational Disease occurring outside the United States of America, and or its territories or possessions, and Canada. This exclusion does not apply to Bodily Injury or Occupational Disease to a citizen or resident of the United States of America or Canada who is temporarily outside these countries; f. Bodily Injury or Occupational Disease arising out of the coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any Employee, or arising out of any personnel practices, policies, acts or omissions. g. Punitive or Exemplary Damages, fines or penalties imposed upon the Covered Party ; h. Liability of the Covered Party on account of the discharge, coercion or other discrimination against any Employee in violation of the Workers Compensation Law, including but not limited to claims relating to or in any way arising out of Labor Code Section 132a. 4. SDRMA Will Defend: SDRMA has the right and duty to defend at its expense any claim, proceeding or suit against the Covered Party for damages payable by this coverage. SDRMA has the right to investigate and settle these claims, proceedings, and suits. SDRMA has no duty to defend or continue defending after SDRMA has paid its applicable limit of liability under this coverage. 5. SDRMA Will Also Pay: SDRMA will also pay these costs in addition to other amounts payable under this coverage as part of any claim or suit SDRMA defends: a. Reasonable expenses incurred at SDRMA s request, but not loss of earnings; b. Premiums for bonds to release attachments and for appeal bonds in bond amounts up to the limit of our liability under this coverage; c. Litigation costs taxed against the Covered Party ; d. Interest on a judgment as required by law until SDRMA offers the amount due under this coverage; and e. Expenses SDRMA incurs, including defense costs. 6. Other Insurance: This coverage is excess over any insurance, selfinsurance or other self-insurance pool. 7. Limits of Liability: SDRMA s liability to pay for damages is limited. SDRMA s limits of liability are shown in the Declarations page. They apply as explained below. a. The limit shown for Employers Liability Coverage is the most SDRMA will pay for all damages covered by this insurance because of Bodily Injury by accident to any one or more employees due to any one accident. b. The limit shown for Employers Liability Coverage is the most SDRMA will pay for all damages covered by this insurance and arising out of Bodily Injury by Occupational Disease, regardless of Workers Compensation Coverage Documents Page:5 of 9 Tel

6 B. Employers Liability, number of Employees who sustain Bodily Injury by Occupational Disease. c. SDRMA will not pay any claims for damages after SDRMA has paid the applicable limit of SDRMA s liability under this insurance. 8. Recovery from Others: SDRMA has the right on behalf of the Covered Party to recover SDRMA s payment from anyone liable for an injury covered by this coverage. In seeking such recovery, SDRMA shall be acting as the designated representative of that Covered Party. All rights of recovery shall remain with the Covered Party such that there is no automatic assignment or transfer of the original claim. At SDRMA s request, the Covered Party shall assign its rights of recovery to SDRMA. All sums recovered under this provision, whether the Covered Party has assigned its rights to SDRMA or not, shall be applied to reimburse SDRMA for payments made pursuant to this agreement. The Covered Party will do everything necessary to protect those rights for SDRMA and will help SDRMA enforce them. 9. Action Against SDRMA: There will be no right of action against SDRMA under this coverage unless: a. The Covered Party has complied with all the terms of this Memorandum, and b. The amount the Covered Party owes has been determined with SDRMA s consent or by actual trial and final judgment. This coverage does not give anyone the right to add SDRMA as a defendant in an action against the Covered Party to determine the Covered Party s liability. III. DEFINITIONS 1. Bodily Injury : The term Bodily Injury shall include death resulting therefrom, but shall not include Occupational Disease. 2. Communicable Disease : Shall mean a disease caused by an infectious organism, which is transmissible from one source to another, directly or indirectly. 3. Coverage Period : Shall be the period referred to in the Declarations page. 4. Covered Party : Shall mean the Member(s) identified as the Covered Party on the Declarations page issued by SDRMA. 5. Employee : The word Employee shall mean, as respects liability imposed upon the Covered Party by the Workers Compensation Act of any state, any person performing work which renders the Covered Party liable under any Workers Compensation Act, provided such person s normal employment or residence is located in a state named in the Declarations page issued by SDRMA. 6. Employers Liability : The phrase Employers Liability shall mean the liability of a Covered Party as specified in Section B. Employers Liability of Section II. 7. Loss : The word Loss shall mean only such amounts as are actually paid or payable by SDRMA on behalf of the Covered Party in payment of benefits under the applicable Workers Compensation Act, or in payment of amounts imposed upon the Covered Party by Employers Liability, in settlement of claims for such benefits or damage, or satisfaction of awards or judgments for such benefits or damages, including court costs, interest upon awards or judgments and allocated investigation, adjustment and defense costs, but the term Loss, shall not include as expenses, salaries paid to an Employee of the Covered Party, nor fees and retainers paid to any service organization Workers Compensation Coverage Documents Page:6 of 9 Tel

7 III. DEFINITIONS, 8. Occupational Disease : The phrase Occupational Disease means a disease or infection which is due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation, process or employment and shall include cumulative injuries and/or death resulting therefrom. Bodily Injury by Occupational Disease does not include Occupational Disease that results directly from a Bodily Injury by accident. 9. Occurrence : the term Occurrence shall mean an accident resulting in Bodily Injury or Occupational Disease to an Employee. a. All Bodily Injury sustained by one or more Employees as a result of a single accident, shall be deemed to arise from a single Occurrence. b. Occupational Disease sustained by one Employee shall be deemed to arise from a separate Occurrence which shall be deemed to take place on the last day of the last exposure, in the employment of the Covered Party, to conditions causing or aggravating the disease. c. All Occupational Disease sustained by one or more Employees as a result of an outbreak of the same Communicable Disease shall be deemed to arise from a single Occurrence. 10. Payroll : Shall mean payroll computed in accordance with the rules set forth in the California Workers Compensation Insurance Manual published by the Workers Compensation Rating Bureau. 11. Workers Compensation Act : The phrase Workers Compensation Act shall mean the workers or workmen s compensation law and occupational disease law of each state or territory described in parts A. and B. under Section I. APPLICATION OF MEMORANDUM. It includes any amendments to that law which are in effect during the policy period. Worker s Compensation Act also includes the United States Longshore and Harbor Workers Compensation Act (33 USC Sections ), but does not include any other any federal workers or workman s compensation law, including, but not limited to, the Non-appropriated Fund Instrumentalities Act (5 USC Sections ), the Outer Continental Shelf Lands Act (43 USC Sections a.), the Defense Base Act (42 USC Sections ), the Federal Coal Mine Safety and Health Act (30 USC Sections ); nor does Worker s Compensation Act include any federal occupational disease law or the provisions of any other law that provides non-occupational disability benefits. IV. OTHER STATES INSURANCE V. THE COVERED PARTY S DUTIES IF INJURY OCCURS How this Coverage Applies: This coverage applies only to the Workers Compensation Act of the State of California or another state if such state is where the injured Employee is normally employed or resides. Tell SDRMA at once if an injury occurs that may be covered by this Memorandum. The Covered Party s other duties are to: a. Provide for immediate medical and other services required by the Workers' Compensation Act. b. Give SDRMA or its claims management firm the names and addresses of the injured persons and of witnesses and other information SDRMA may need. c. Promptly give SDRMA or its claims management firm all notices, demands, and legal papers related to the injury, claim, proceeding or suit. d. Cooperate with SDRMA or its claims management firm and assist SDRMA or its claims management firm as SDRMA or its claims management firm may request in the investigation, settlement, or defense of any claim, proceeding or suit. e. Do nothing after an injury occurs that would interfere with SDRMA s right to recover from others Workers Compensation Coverage Documents Page:7 of 9 Tel

8 f. Do not voluntarily make payments, assume obligations or incur expenses except at the Covered Party s own cost. VI. CONTRIBUTION 1. Contribution(s) Due: The contribution(s) due for the coverages set forth in this Memorandum of Coverage shall be determined pursuant to the terms and conditions set forth in the Sixth Amended Joint Powers Agreement and any amendments thereto. The rules, classifications, and rates published by the Workers' Compensation Insurance Rating Bureau for the applicable year shall be used in computing contributions. 2. Classifications: The Board of Directors of the SDRMA shall classify the Covered Party s payroll pursuant to the rules published by the Workers Compensation Insurance Rating Bureau and procedures and policies established from time to time. 3. Remuneration: Contribution for each work classification is determined by multiplying a rate times a contribution basis. Remuneration is the most common contribution basis. This contribution basis includes payroll and all other remuneration paid or payable during the coverage period for the services of: a. All the Covered Party s officers and Employees engaged in work covered by this Memorandum; and b. All other persons engaged in work that could make SDRMA liable under Part I (Workers' Compensation) of this Memorandum. If the Covered Party does not have payroll records for these persons, the contract price for their services and materials may be used as the contribution basis. This paragraph will not apply if the Covered Party gives us proof that the employers of these persons lawfully secured their workers' compensation obligations. c. With respect to directors who sit on the Board of the Member who are paid either on the Member s Payroll or through accounts payable as independent contractors, the Member s contribution shall be in accordance with the rules and policies established by SDRMA, subject to a minimum per Director per year. d. The contribution base for volunteers is the number of hours worked times the federal minimum wage for each hour worked. This contribution base applies to volunteers who receive direct or indirect compensation from the Agency and applies to volunteers who are covered for workers' compensation benefits by resolution of the Agency Board of Directors. 4. Records: The Covered Party will keep records of information needed to compute a contribution. The Covered Party will provide us with copies of these records when SDRMA asks for them. 5. Audit: The Covered Party will let us examine and audit all the Covered Party s records that relate to these coverage s and this Memorandum. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and programs for storing and retrieving data. SDRMA may conduct the audits during regular business hours during the period of coverage and within three years after the coverage period ends. Information developed by audit will be used to determine final contribution. VII. CONDITIONS 1. Inspection: SDRMA has the right, but is not obligated, to inspect the Covered Party s workplaces at any time. SDRMA inspections are not safety inspections. They relate only to the insurability of the workplaces and the contributions to be charged. SDRMA may give the Covered Party reports on the conditions which SDRMA finds. SDRMA may also recommend changes. While they help reduce losses, SDRMA does not undertake to perform the duty of any person to provide for the health or safety of the Covered Party s Employees or the public. SDRMA does not warrant that the Covered Workers Compensation Coverage Documents Page:8 of 9 Tel

9 VII. CONDITIONS, Party s workplaces are safe or healthful or that they comply with laws, regulations, codes, or standards. 2. Transfer of The Covered Party s Rights and Duties: The Covered Party s rights or duties under this policy may not be transferred without our written consent. 3. Cancellation: a. The Covered Party may cancel this coverage pursuant to the terms of the Sixth Amended Joint Powers Agreement (and any amendments thereto) and the Bylaws including the involuntary termination provisions. b. SDRMA may cancel this Memorandum pursuant to the terms of the Joint Powers Agreement (and any amendments thereto) and the Bylaws. VIII. CALIFORNIA AMENDATORY PROVISION Rate Changes: This Memorandum is issued by SDRMA and accepted by the Covered Party with the agreement that the Covered Party will accept any increase in contribution or in the rates of contribution which may be promulgated by SDRMA s Board of Directors and made effective immediately at any time during the Coverage Period as authorized by the Sixth Amended Joint Powers Agreement (or amendments thereto or amended versions thereof) and/or the Bylaws. Statutory Provision: The Covered Party s Employee has a first lien upon any amount, which becomes owing to the Covered Party by us on account of this memorandum, and in the case of the Covered Party s legal incapacity or inability to receive the money and pay it to the claimant SDRMA will pay it directly to the claimant. IN WITNESS WHEREOF, this Memorandum of Coverage has been executed by the Special District Risk Management Authority (SDRMA) on the date shown below. NOTICE: If proper, timely notice of intent to withdraw is not given, as required by the Sixth Amended and Restated Joint Powers Agreement and/or the Bylaws, or successor documents thereto, your District/Agency shall be responsible for the full program year's contributions and any assessments applicable thereto, for the program year for which notice was not timely given, as well as any other assessments to which a member District/Agency is or may legally be obligated. SPECIAL DISTRICT RISK MANAGEMENT AUTHORITY (SDRMA) Signed by: July 1, 2017 Chief Executive Officer Date Workers Compensation Coverage Documents Page:9 of 9 Tel