February 22, 2013 - Oregon State Bar

Action Memo To: O56 Board of Governors
October 30, 2012
Page 2
11. "LAW ENTITY" refers to a professional corporation, partnership,
limited liability partnership, limited liability company, or sole
proprietorship engaged in the private practice of law in Oregon.
2. Section V(4)(b) — EXCLUSIONS FROM COVERAGE
Exclusion 4 addresses coverage for punitive damages and sanctions. Subsection (b) bars
coverage for sanctions and penalties levied against covered attorneys and "others." The intent
of the use of "others" is to bar coverage for clients and parties who might seek indemnity from
the lawyer for sanctions or penalties imposed on them for their own conduct. The use of the
term "others" in this way is not entirely self-evident and could give rise to confusion about who
and what is excluded from coverage under Exclusion 4. We propose that the phrase be
removed from Subsection (b) as follows:
4. This Plan does not apply to:
a. The part of any CLAIM seeking punitive, exemplary or statutorily
enhanced damages; or
b. Any CLAIM for or arising out of the imposition of attorney
fees, costs, fines, penalties, or other sanctions ^~ *"~
o^gym imposed under any federal or state statute,
administrative rule, court rule, or case law intended to penalize bad
faith conduct and/or the assertion of frivolous or bad faith claims or
defenses. The PLF will defend the COVERED PAN against such a
CLAIM, but any liability for indemnity arising from such CLAIM will
be excluded.
3. Section VII — Notice of Claims
The PLF Claims Made Plan addresses the issue of when and how a claim is made and
coverage triggered in two separate places: SECTION VII-NOTICE OF CLAIMS and SECTION IV-
GRANT OF COVERAGE.
After discussing possible inconsistencies between the two sections with coverage
counsel and PLF claims staff, we proposed changing Section VII to reconcile the two sections.
Note that Section IV.1.b has been included for reference only, no changes are proposed. The
inconsistency was between Section IV (1) (c) which stated the date of a claim was when "the
PLF first became aware of facts...." and the requirement in Section VII that the PLF have written
notice of the claim from the Covered Party before the PLF sets a date for the claim. The new
Section VII cures the inconsistency.