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PACE trustees adopt language strengthening coverage document

It wasn’t that long ago that lawyer Andy Lauersdorf represented a client suing the Special Districts Association of Oregon (SDAO).

After that case ended, SDAO reached out to Lauersdorf about the language in the property coverage document for PACE that is jointly administered by SDAO and OSBA through the Property and Casualty Coverage for Education (PACE) Trust. Like a coach who has studied the other team’s playbook, he thought he could help improve PACE’s game plan.

His presentation was one of several orders of business when PACE trustees met May 6 in Salem.

Lauersdorf suggested language changes in five areas governing coverage: emphasizing mitigation in the event of a loss, clarifying scope and conditions of appraisal, clarifying covered professional services, clarifying coverage in case of construction delays, and revising language in cases in which faulty workmanship or materials have been used in repairs or construction.

Trustees unanimously approved the first four changes, but asked for more work to be done in the area of the faulty materials or workmanship.

Lauersdorf also proposed adding a stated values clause on coverage documents, which may read: “The members and the Trust would agree upon the value of the buildings or specific pieces of property and that value would be the maximum paid out in the event of a loss. If a loss occurs, the agreed properties stated value would be the limit of the indemnity.”

That change was also approved unanimously. The changes take effect for the next policy renewal.

Mike Doherty, SDAO’s chief financial officer, said districts would be seeing rate increases ranging from 11 to 30 percent in their renewals, and that the average rate would be 17 percent. The size of the rate increase is primarily based on claims history, he said.

Significant increases in liability claims such as employment and sexual abuse against PACE and widespread insurance losses worldwide are driving rates upward.