Los Angeles Municipal Code Art. 2 Procedure for Posting and Acceptance of All Bonds, Contracts of

INDEMNITY AND INSURANCE POLICIES

(Chapter and Article amended in entirety by Ord. No. 176,740, Eff. 7-25-05.)

Section 11.47 Supervision and Control. 11.48 Instruments to be Submitted. 11.49 Approval. 11.50 Oath and Affidavit. 11.51 Notification of Default, Loss or Damage. 11.52 Recommendations to Council. 11.53 Duty of Controller. 11.54 Cancellation. 11.55 Cash Deposit in Lieu of Bond. 11.56 Non-compliance with Article.

The Risk Manager, as defined below, shall supervise and control the procedure, posting and approval of all contracts of indemnity and insurance policies. The Risk Manager shall also supervise and control the procedure, posting and acceptance of all bonds in the form approved by the City Attorney. The Risk Manager shall also maintain such bonds, contracts and policies in such manner as to keep them enforceable against the obligors thereon. For purposes of this Article, Risk Manager shall mean the person in the following departments responsible for risk management activities: The Office of the City Administrative Officer, the Department of Water and Power, the Department of Airports, and the Harbor Department.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 176,740, Eff. 7-25-05.

At the sole discretion of the Risk Manager, insurance documentation other than the actual policy of insurance may be submitted to the City.

The requirements of this Article shall not apply to bonds accompanying bids or proposals to enter into any contract with the City of Los Angeles or any department, board, officer or employee thereof for the furnishing of supplies, materials or equipment of any kind or nature whatsoever or to any bond posted solely to guarantee that the bidder will enter into the proposed contract if the same be awarded to the bidder.

Notwithstanding the foregoing exemption, however, bonds of the form and kind known as annual bid bonds shall be subject to all of the provisions of this Article.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 84,959; Ord. No. 151,255. Eff. 8-27-78; Title and Section, Ord. No. 176,740, Eff. 7-25-05.

All contracts of indemnity and insurance policies shall be approved by the Risk Manager. The City Attorney shall approve the form of all bonds. If the contract of indemnity or insurance policy is approved by the Risk Manager, such approval and date of approval shall be endorsed on the document and any copies thereof. If the bond is accepted by the Risk Manager, such acceptance and date of approval shall be endorsed

on the document and any copies thereof.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Title and Section, Ord. No. 176,740, Eff. 7-25-05.

(a) It is the policy of the City of Los Angeles to require adequate corporate bonds, except where a law or ordinance requires the acceptance of personal surety. If any such bond or contract of indemnity has been executed by personal sureties, its acceptance being so required, the Risk Manager must administer an oath to such personal sureties who shall answer questions relating to and make a satisfactory showing of their ability to respond financially in the amount of such bond. Each such personal surety shall disclose the amount of which the personal surety has become obligated on all other surety bonds, and all other claims against the person surety, legal or otherwise.

(b) Upon acceptance by the City all personal bonds shall be acknowledged and recorded by the department which accepted the same with the County Recorder of Los Angeles County.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 84,959; Subsecs. (e) and (f), Ord. No. 131,771, Subsec. (a) Ord. No. 139,315, Eff. 11-29-69; Subsecs. (e) and (f) repealed, Ord. No. 151,330, Eff. 9-25-78; Ord. No. 176,740, Eff. 7-25-05.

Each board, officer or employee of any department of this City required or authorized by law to accept, receive or file any bond, contract or policy, shall keep an adequate record showing the date of filing of each such instrument, the disposition thereof, the performance thereunder, and the occurrence of any loss, damage or default covered thereby. They and each of them shall immediately notify the Risk Manager, by a written report, upon the discovery of any of the following:

(a) Any default in performance on the part of any principal on any bond or contract of indemnity;

(b) Any loss or damage sustained by the City covered by any policy of insurance or contract of indemnity;

(c) Any loss or damage sustained by any person insured or indemnified under the terms of any such bond, contract, or policy.

SECTION HISTORY

Based on Ord. No. 84,480.

Amended by: Ord. No. 84,959; Ord. No. 176,740, Eff. 7-25-05.

Whenever it shall come to the attention of the Risk Manager that any ordinance of this City requiring or authorizing the posting or furnishing of bonds or contracts of indemnity or insurance, or providing for the terms or conditions thereof, does not adequately protect any person for whose benefit the bond, contract of indemnity, or insurance policy is furnished, the Risk Manager shall recommend to the City Council such changes or amendments as in the Risk Manager’s discretion may be proper.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 176,740, Eff. 7-25-05.

It shall be the duty of the Controller of the City of Los Angeles, and the Controller is hereby required, to report to the Risk Manager, upon the Risk Manager’s request therefor, the financial standing and responsibility of any surety or insurance company that may have offered a bond, contract of indemnity or insurance policy to the City of Los Angeles, and the report shall include the amount of the bond or insurance policy that may be accepted by the City of Los Angeles from each of said companies.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 176,740, Eff. 7-25-05.

No bonds, contracts of indemnity, or insurance policies shall be subject to cancellation or reduction in coverage, except by impairment of a stated aggregate limit, until the Risk Manager has received 30 days prior written notice. The Risk Manager may authorize a shorter period of notice. This section shall not affect an insurer’s right to give a shorter period of notice to the named insured for non- payment of premium or an insurer’s obligation to respond to the named insured’s request for cancellation as required by law.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 148,928, Eff. 11-22-76; Ord. No. 151,255, Eff. 8-27-78; Ord. No. 176,740, Eff. 7-25-05.

In any case wherein the City of Los Angeles or any board, officer or employee thereof, by charter or ordinance, is granted or has the power or duty to fix the amount of, or to approve, any bond required to be given by any person to the City of Los Angeles or any board, officer or employee thereof, the said City of Los Angeles or any board, officer or employee may accept as such bond, and in lieu of any other bond an agreement of indemnity accompanied by a physical deposit of cash in substantially the following form and manner:

(a) Any person heretofore or hereafter required by any provision of the Charter of the City of Los Angeles, or any ordinance of the

City of Los Angeles, or by any other law, to post with or furnish to the City of Los Angeles, or to any deputy or officer thereof, any bond or contract of indemnity, may deposit and at all times maintain on deposit with the Treasurer of the City of Los Angeles an amount of cash equivalent to the amount of the bond required as above stated;

(b) Such person so required to furnish a bond or contract of indemnity shall, contemporaneously with the making of said deposit,

execute and deliver to the City an agreement in writing, subject to the approval of the Risk Manager, confirming said deposit and conditioned as required in the case of the bond;

(c) The City Treasurer shall have custody of the cash deposited hereunder.

(d) The board, officer or employee requiring said bond or contract of indemnity may determine the fact of default by the person

posting or furnishing said cash deposit and the amount of loss or damage sustained by the City, and the amount of the loss or damage sustained by any other person indemnified by the agreement of indemnity provided for herein, and order a reimbursement thereof from the deposit. The board, officer or employee shall transmit their findings and order to the Treasurer who may reimburse the City and any other person ordered to be reimbursed by said board, officer or employee for the loss and damage found by said board, officer or employee to have been sustained.

(e) The agreement of indemnity herein provided for may set forth such additional terms and conditions as may be necessary or

convenient to carry out the purposes and intent of this section;

(f) None of the provisions of this section shall apply in any case wherein cash deposits or cash bonds are otherwise specifically

authorized or provided for by any other ordinance of the City of Los Angeles now in effect or hereafter adopted.

(g) The provisions of this article shall not be deemed to nor shall they apply to policies, certificates, or other instruments of title

insurance or title guaranty.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 176,740, Eff. 7-25-05.

Any person who violates any of the provisions or fails to comply with any of the mandatory requirements of this article is guilty of a misdemeanor and upon conviction thereof shall be punishable by a fine of not to exceed One Thousand Dollars ($1,000) or by imprisonment in the County Jail for a period of not to exceed one hundred eighty (180) days, or by both such fine and imprisonment.

SECTION HISTORY

Based on Ord. No. 84,480. Amended by: Ord. No. 160,064, Eff. 7-28-85; Ord. No. 176,740, Eff. 7-25-05.