Professional Liability Fund

Understanding Your
PLF Coverage

Presented by:
Carol J. Bernick, CEO
Teresa A. Statler, 2017 Board Chair

Professional Liability Fund

THE PLF IS UNIQUE

• Formed in 1978 (ORS 9.080)—OSB empowered to create fund

• Shared risk pool concept – individual lawyers, not firms

• All Oregon lawyers engaged in private practice with principal office in

Oregon

• Mandatory, no underwriting, no deductible, auto ERC (“tail” coverage)

• Began offering optional, underwritten excess coverage in 1991

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 Professional Liability Fund

COMPARISON TO COMMERCIAL
INSURANCE

• No deductible

• Expense allowance

• No underwriting

• Loss Prevention services

Professional Liability Fund

THE PLF IS UNIQUE

• The PLF has a board of 9 members – 7 attorneys and two public

members. They are appointed by the OSB Board of Governors.

• Managed separately from the OSB

• PLF is fully reserved—assessment set based on actuarial

projections of ultimate claim liability for the year

• Unique model in US but common in other English-speaking

jurisdictions

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 Professional Liability Fund

THE PLF MISSION

• The PLF mission is to provide high quality coverage to
attorneys and zealously protect the interests of covered
attorneys.

• The duty of the PLF is to the covered attorney

• The public is benefited because of the certainty

attorneys will have malpractice coverage.

Professional Liability Fund

BENEFITS

• Stable, long-term source of coverage

• Commitment of profession to protect public

• Oregon lawyers control terms of coverage and management of PLF

• High level of service, assistance and expertise

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 Professional Liability Fund

CONFIDENTIALITY
• All claims information is confidential.

• All communication with the OAAP and Practice Management

Advisors is Confidential.

• Confidentiality extends to the Oregon State Bar, including

Regulatory Services (discipline), the Board of Governors and all
other OSB-related entities.

• The confidentiality is protected by statute, OSB and PLF Policies.

Professional Liability Fund

ASSESSMENT
$3,500 (unchanged since 2011)

• New Admittees
• Year 1: 40% reduction
• Year 2: 20% reduction
• Year 3: 20% reduction

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 Professional Liability Fund

OPTIONS FOR PAYING ASSESSMENT

• Check
• Credit card
• E-check
• One-time
• Scheduled
• ACH NOT available

Professional Liability Fund

TIMING FOR PAYMENTS

• In-Full by January 10

• Installment (January 10, April 10, July 10 and October 10)

• $10 service charge
• 7% interest/lost revenue ($102)

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 Professional Liability Fund

UNDERSTANDING PLF COSTS

• 25% of assessment goes to operations. Covers 75% of actual

operating costs

• 25% of PLF operation budget devoted to Loss Prevention

• 75% covers claims (reserves and actual)

Professional Liability Fund

FREQUENCY OF CLOSED CLAIMS BY AREA OF LAW

January 1, 2006 – December 31, 2015

AREA OF LAW PERCENT COUNT

Personal Injury 15% 1,262
Domestic Relations/Family Law 17% 1,371
Bankruptcy & Debtor-Creditor 13% 1,111
Real Estate 10% 814
Estate Planning & Estate Tax 10% 849
Business Transactions/Commercial Law 7% 599
Criminal 7% 567
Workers’ Compensation/Admiralty 2% 194
Securities 1% 44
Tax 1% 60
Other 17% 1,415
100% 8,286

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 COST OF CLOSED CLAIMS BY AREA OF LAW
January 1, 2006 – December 31, 2015

PERCENT  PERCENT
INDEMNITY  INDEMNITY  EXPENSES  EXPENSES 
AREA OF LAW PAID PAID PAID PAID TOTAL PAID
Personal Injury 20% $13,739,057 12% $8,479,399 $22,218,456
Business Transactions/ 12% $8,593,521 16% $10,264,261 $18,857,782
Commercial Law
Real Estate 14% $9,822,761 14% $9,095,578 $18,918,339
Estate Planning  and Estate Tax 12% $8,350,215 10% $6,643,961 $14,994,176
Bankruptcy & Debtor‐Creditor 9% $6,370,212 11% $7,116,973 $13,487,185
Domestic Relations/Family Law 10% $6,651,412 9% $5,951,729 $12,603,141
Workers’ Comp/Admiralty 3% $2,045,931 2% $1,041,488 $3,087,419

Securities 2% $1,248,508 4% $2,351,620 $3,600,128

Criminal 2% $1,239,172 3% $2,016,962 $3,256,134
Tax 1% $476,369 1% $676,689 $1,153,058
Other 15% $10,879,492 18% $11,892,540 $22,772,032
100% $69,416,650 100% $65,531,200 $134,947,850

Professional Liability Fund

COST OF CLAIMS BY FIRM SIZE (2015)

TOTAL CLAIMS OPENED: 808

• Solo: 3668 CPs; 517 claims ($6.52 million)

• 2-5: 1278 CPs; 144 claims ($1.64 million)

• +15: 1612 CPs; 72 claims ($1.71 million)

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 Payment Allocation of Closed Claims 
January 1, 2006 to December 31, 2015 

18%
25%

Payment to Claimant and Expense
18%
Payment to Claimant and No
Expense 14%
14%
Expense Only 43%

No Expense or Payment to Claimant
25%

43%

Professional Liability Fund

HOW MUCH COVERAGE

DO YOU HAVE?

• $300,000 FOR INDEMNITY plus a $50,000 CLAIMS EXPENSE.

• Limits are per claims/annual aggregate of claims

• PLF Excess Coverage with limits up to $10 million available

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 Professional Liability Fund

Coverage – What, Who, and Where

Basic Coverage Grant
• “Rendering services in your capacity as an attorney in private practice”

• Common law concept:

Can claimant state a claim of lawyer professional liability?

Or, cause of action recognized courts?

• Defense of claims

Professional Liability Fund

Coverage – What, Who, and Where

• Vicarious Liability is covered

• Special Capacity Roles (trustee, PR, conservator, guardian, etc.)

are covered

• Mediation and arbitration are covered

• Geographical Scope: Claims made in any state or Canada

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 Professional Liability Fund

DOES AN EXCLUSION APPLY?

General Categories:

• Intentional or fraudulent acts

• Business activities, 10% rule, conflict letters
• Claims for fees
• Family members and businesses
• Non-legal torts, PI, property damage
• Voluntarily accepting liability on a matter
• Securities covered, not investment advice
• Confidential data

Professional Liability Fund

UNIQUE PART OF THE

LEGAL COMMUNITY
 Coverage and Claim questions answered anytime

 Practice Management Advisors (PMA) / Oregon Attorney

Assistance Program (OAAP)

 Practice aids / publications (InBrief, InSight) / CLE’s

 Overwhelming positive feedback on claims handling

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 Professional Liability Fund

LOSS PREVENTION SERVICES

PRACTICE MANAGEMENT

 Online practice aids (400): 30,000 downloads

 246 office visits (93% to firms of 10 or fewer)

 CLEs: 90

 Handbooks: 4

 OAAP Access: 744 people – 28 groups

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