ORS Chapter 278
Chapter 278 — Insurancefor Public Bodies
2009 EDITION
INSURANCEFOR PUBLIC BODIES
PUBLICFACILITIES, CONTRACTING & INSURANCE
GENERALPROVISIONS
278.005 Definitions
INSURANCEOF PUBLIC PROPERTY
278.011 Stateagencies to supply information on property; appraised value determined
278.022 Coverageof vessels
278.050 Restoringlost, damaged or destroyed property; exceptions; use of fund for otherpurposes; deductibles
278.052 Rightof action against person responsible for loss; investigations
278.075 Stateagencies to supply information on media property; scope of coverage
278.120 Claimsmanagement; defense; authority of Attorney General; payment of judgment orsettlement; rules
278.125 Purchaseof insurance; payment of premium; legislative approval of self-insurance plan
278.130 Employmentof staff assistance; payment for services by Attorney General
278.150 SpecialLiability Revolving Fund; accounting for moneys disbursed
INSURANCEFOR MOTOR VEHICLES OWNED BY GOVERNMENT
278.200 “Motorvehicle” defined for ORS 278.205 and 278.322
278.205 Certificatesof insurance; coverage; personal injury protection benefits; rules
278.210 Statehas rights and duties of insurer
278.215 Uninsuredmotorist coverage requirements
LIABILITYINSURANCE
278.315 Liabilityinsurance for county or private community care providers
278.320 Applicationof government tort law to claims against private community care providers;liability for damages in excess of coverage
278.322 Childcare facility liability insurance coverage
RISKMANAGEMENT
278.405 Departmentto manage risk management and insurance programs; rules
278.415 Departmentauthorization of agency insurance purchases; exceptions
INSURANCEFUND
278.425 InsuranceFund; uses
278.435 Fundto operate on actuarially sound basis; apportionment; assessment; advances;repayment
GENERALPROVISIONS
278.005Definitions.As used in this chapter, unless the context requires otherwise:
(1)“Actuarially sound” means funding and insurance sufficient to pay those lossesand their related costs which are known or are projected by the OregonDepartment of Administrative Services from analyses of claims, loss experienceand risk factors.
(2)“Components” of the Insurance Fund means accounts created by the departmentwithin the Insurance Fund to provide specific coverages and administer theduties of this chapter.
(3)“Data” means information previously converted to language or symbols in a formwhich can be directly read by the information processing equipment.
(4)“Department” means the Oregon Department of Administrative Services.
(5)“Engineering specifications” means those records which provide detaileddocumentation of the construction, wiring, arrangement and related engineeringdetails of the information processing equipment.
(6)“Media” means all active information processing material including all forms ofdata, program material and related engineering specifications employed in theagency’s information processing operation except property which the agencyelects not to cover.
(7)“Participating local public body” and “public body” mean any public body otherthan the state which has elected to participate in the Insurance Fund under ORS30.282.
(8)“Personal property” means tangible personal property owned, leased, controlledor possessed by a state agency and includes all chattels and moveables, such asmerchandise, furniture, goods, livestock, vehicles, aircraft, moveablemachinery, moveable tools, moveable equipment, general operating supplies andmedia. “Personal property” does not include cash, currency or negotiable papersand securities and similar property which may be excluded by policy of thedepartment.
(9)“Program material” means stored data used to direct the information processingequipment as to which input or memory to use, how to use it, and the type ofresults to obtain, including any diagrams or other records which can be used toreproduce such instructions.
(10)“Property” means real and personal property as defined in this section, and anyother property under the control of the state in which the state has aninsurable interest as determined by the department.
(11)“Real property” means the land and all buildings, structures, improvements,machinery, equipment or fixtures erected on, above or under the land the titleof which is vested in the State of Oregon, or is under the control of the statethrough a lease purchase agreement, installment purchase, mortgage or lien. “Realproperty” does not include any paving, roadways, tunnels, bridges, bike paths,sidewalks and other related improvements which may be excluded by policy of thedepartment.
(12)“State agency” or “agency” means each state branch, institution, department,board, commission or activity of whatever nature.
(13)“Vessel” means a boat, ship, craft or structure made to float or travel uponthe water which may or may not be powered by a marine engine. [1961 c.448 §2;1975 c.609 §21; 1977 c.428 §2; 1981 c.109 §6; 1985 c.731 §7; 1989 c.40 §1; 1993c.500 §25]
278.010 [Repealed by 1953c.581 §11]
INSURANCEOF PUBLIC PROPERTY
278.011State agencies to supply information on property; appraised value determined. At timesdetermined by the Oregon Department of Administrative Services, each stateagency shall supply such information regarding its property, personal and real,and its personnel, budget and activities as the department shall require forrisk control, insurance and claims purposes. The appraised value of theproperty shall be established by the department on the basis of present dayreplacement costs excluding the value of land. [1953 c.581 §9; 1957 c.385 §1;1961 c.448 §3; 1965 c.140 §1; 1969 c.670 §5; 1981 c.109 §7; 1991 c.566 §1]
278.020 [Amended by1953 c.581 §11; 1961 c.448 §4; 1963 c.634 §4; 1967 c.262 §1; 1969 c.670 §1;1975 c.609 §10; 1981 c.109 §8; 1982 s.s.1 c.28 §1; 1985 c.731 §8; repealed by1991 c.566 §14]
278.022Coverage of vessels.In addition to any other coverage under this chapter, if a vessel which is thepersonal property of an agency or if property on any other vessel is damaged ordestroyed as a direct result of collision with another vessel, striking anyobject, whether submerged or not, sinking, grounding, stranding, or otherperils of the sea, the Oregon Department of Administrative Services shall paythe cost of restoring the vessel or property out of the Insurance Fund in anamount not to exceed the appraised value established pursuant to this chapter.If an agency’s vessel becomes disabled at sea for any reason, the departmentshall reimburse the agency from the Insurance Fund for the cost of towing thevessel to the nearest port where repairs can be accomplished. [1961 c.448 §11;1965 c.140 §2; 1969 c.670 §6; 1975 c.609 §22; 1982 s.s.1 c.28 §2; 1985 c.731 §9;1991 c.566 §2]
278.025 [1953 c.581 §5;1969 c.670 §7; 1975 c.609 §23; repealed by 1985 c.731 §32]
278.030 [Amended by1981 c.109 §9; 1982 s.s.1 c.28 §3; repealed by 1985 c.731 §32]
278.035 [1961 c.448 §§6,7;1969 c.670 §8; 1975 c.609 §24; repealed by 1985 c.731 §32]
278.040 [Amended by1961 c.448 §8; repealed by 1985 c.731 §32]
278.043 [1969 c.670 §3;1982 s.s.1 c.28 §4; repealed by 1985 c.731 §32]
278.047 [1969 c.670 §4;1982 s.s.1 c.28 §5; repealed by 1985 c.731 §32]
278.050Restoring lost, damaged or destroyed property; exceptions; use of fund for otherpurposes; deductibles. (1) Subject to subsections (2) and (3) of thissection, if any property designated in ORS 278.011 is lost, damaged ordestroyed by any peril, the Oregon Department of Administrative Services mayelect to cover by rule or policy, but excluding any loss from mysteriousdisappearance, lack of maintenance or inherent vice, the department shall paythe cost of restoring the property out of the Insurance Fund in an amount notto exceed the appraised value established pursuant to ORS 278.011.
(2)Any amounts received by an agency from the Insurance Fund may be applied forpurposes other than the restoration of the property destroyed provided such useis approved by the department, the Legislative Administration Committee or theState Court Administrator, as appropriate, and further, in the event the amountreceived from the Insurance Fund exceeds $50,000, approval must also bereceived from the Legislative Assembly if in session, or the Emergency Board ifduring the interim. If the restoration of any property designated in ORS278.011 that is lost, damaged, or destroyed by any covered peril is notrequired, the cost of razing the property may be paid out of the InsuranceFund. Any amounts approved on claims for use in rebuilding or replacing real orpersonal property may be transferred to other agencies if approved by thedepartment, the Legislative Administrator or the State Court Administrator, asappropriate. However, in the event that the amount exceeds $50,000, approvalmust also be secured from the Legislative Assembly if in session, or theEmergency Board if during the interim.
(3)The department may establish deductibles for certain perils or classes ofproperty covered by the Insurance Fund. Payments from the fund to cover loss,damage or destruction shall be reduced by the deductible amount adopted by thedepartment.
(4)The department shall draw warrants on the State Treasurer payable from theInsurance Fund for all claims required in carrying out the provisions of thischapter. [Amended by 1953 c.581 §11; 1957 c.385 §2; 1961 c.448 §9; 1965 c.140 §3;1969 c.670 §9; 1981 c.109 §10; 1985 c.731 §10; 1991 c.566 §3; 1993 c.500 §26]
278.052Right of action against person responsible for loss; investigations. (1) If apayment is made out of the Insurance Fund to or for a state agency for any losscovered by the Insurance Fund, the Oregon Department of Administrative Servicesis subrogated, to the extent of the payment, to the rights of the state agencyagainst any person or other entity legally responsible in damages for the loss.The department may commence an appropriate action in any court, in the name ofthe state, to enforce the rights. Any amounts recovered as a result of theproceeding shall be paid into the State Treasury and credited to the InsuranceFund.
(2)The department may conduct an investigation of a loss to determine whetherlegal action should be commenced. The department may administer oaths andexamine witnesses in connection with its investigation. The State Fire Marshaland the Department of State Police and all state agencies covered under thischapter shall cooperate with the Oregon Department of Administrative Servicesin the investigation. [1961 c.448 §12; 1985 c.731 §11; 1991 c.566 §4]
278.054 [1953 c.581 §6;repealed by 1975 c.605 §33]
278.056 [1953 c.581 §7;repealed by 1975 c.605 §33]
278.060 [Amended by1961 c.448 §13; 1981 c.109 §11; repealed by 1985 c.731 §32]
278.070 [Amended by1961 c.448 §14; repealed by 1985 c.731 §32]
278.075State agencies to supply information on media property; scope of coverage. (1) At timesdetermined by the Oregon Department of Administrative Services, each stateagency owning, leasing, controlling or possessing media shall supply suchinformation as the department may require regarding the agency’s media. Theappraised value of the media shall be established on the basis of present-dayreplacement costs or restoration to operational condition.
(2)If any media designated in subsection (1) of this section is damaged ordestroyed by any covered peril, the department shall pay all extraordinaryexpenses related to replacement or re-creation of new or backup media out ofthe Insurance Fund in an amount not to exceed the appraised value established pursuantto this chapter. Such costs may include reproduction of media, temporaryservice and equipment rental costs, reinstallation, shipping and other relatedcosts.
(3)Media coverage by the Insurance Fund does not include any loss of moneysbecause of the lack of any revenue producing function connected with theoperation, nor does it cover any other costs of business interruption outsidethe direct expenses as outlined in subsection (2) of this section. [1981 c.109 §23;1985 c.731 §12; 1991 c.566 §5]
278.080 [Amended by1953 c.581 §11; repealed by 1959 c.12 §1]
278.085 [1953 c.581 §1;1957 c.385 §3; 1961 c.448 §15; 1969 c.670 §10; repealed by 1985 c.731 §32]
278.090 [Amended by1955 c.288 §1; 1959 c.662 §18; repealed by 1975 c.609 §25]
278.100 [1975 c.609 §2;1977 c.428 §3; 1981 c.109 §12; 1981 c.490 §1; 1981 c.913 §1; repealed by 1985c.731 §32]
278.105 [1975 c.609 §3;repealed by 1985 c.731 §32]
278.110 [1975 c.609 §4;1981 c.109 §13; repealed by 1985 c.731 §32]
278.115 [1975 c.609 §5;1981 c.109 §14; 1985 c.731 §13; repealed by 1991 c.566 §14]
278.120Claims management; defense; authority of Attorney General; payment of judgmentor settlement; rules.(1) Without in any way limiting who may receive actual notice of a claim underORS 30.275 (6), the Oregon Department of Administrative Services has exclusiveauthority to manage claims against the state, and against the officers,employees and agents of the state, that arise under the provisions of ORS30.260 to 30.300. The department may delegate, by rule or by policy, claimmanagement functions for claims arising under the provisions of ORS 30.260 to30.300, including investigation, negotiation and settlement, to the AttorneyGeneral. The department may delegate, by rule or by policy, claim managementfor certain kinds of claims against an agency to the agency’s elected orappointed head. Upon receipt by the department of a claim for damages againstthe State of Oregon or a state officer, employee or agent within the scope ofORS 30.260 to 30.300, if the claim is covered by insurance, the departmentshall tender defense of the claim to the insurer, and if such tender isaccepted, ORS chapter 180 and the remaining provisions of this section shallnot be applicable. If the claim is not covered by insurance or if the tender isrejected, the department shall cause an investigation to be conducted todetermine whether the claim is meritorious and comes within the provisions ofORS 30.260 to 30.300. The Attorney General may conduct the investigation ifrequested by the department. If the department determines that the state or astate officer, agent or employee is or may be liable to the claimant under ORS30.260 to 30.300, the department may negotiate, compromise and settle with theclaimant. However, the department shall not compromise or settle a claim fordeclaratory, injunctive or other protective relief against a state departmentor agency that is headed by an elected official, its officers, employees oragents, or that elected official, without the express prior consent of theelected official. The Attorney General shall defend all lawsuits after thedepartment has determined that a reasonable settlement cannot be achieved. Thedepartment shall pay from the Special Liability Revolving Fund authorized inORS 278.150 or the Insurance Fund the amount of any judgment, and, if thedepartment determines such action to be appropriate, the amount of anysettlement unless the defense of the claim has been rejected pursuant to ORS30.285 (5) or the Attorney General determines, in consultation with thedepartment, that the act or omission of a state officer, employee or agent outof which the claim arose was committed maliciously or with an intent to causeunlawful damage or injury or with gross recklessness.
(2)The department, through the Insurance Fund, shall pay reasonable defenseexpenditures for and indemnify liabilities of an officer, employee or agent ofa court of this state who is a state officer, employee or agent that arise outof a mandamus proceeding brought against that person in the person’s officialcapacity.
(3)The authority granted to the department under subsection (1) of this section issubject to the authority of the Attorney General provided for under thissection and under ORS 180.220.
(4)As used in this section, “state officer, employee or agent” includes thedistrict attorney and deputy district attorneys, special prosecutors and lawclerks of the office of district attorney who act in a prosecutorial capacity,but does not include any other employee of the office of district attorney orany employee of the justice or circuit court whose salary is paid wholly or inpart by a county and who shall be considered an officer, agent or employee ofthe county. [1975 c.609 §6; 1979 c.669 §1; 1981 c.109 §16; 1981 c.350 §3; 1985c.731 §14; 1987 c.763 §2; 1993 c.515 §2]
278.125Purchase of insurance; payment of premium; legislative approval ofself-insurance plan.(1) The Oregon Department of Administrative Services is authorized to negotiatefor and purchase such insurance as it deems necessary or desirable toaccomplish the purposes of this chapter and ORS 30.260 to 30.300 and 278.322,or such other insurance or reinsurance as may be desirable to insure the state,participating local public bodies or their officers, employees or agentsagainst liability.
(2)The premium for such insurance shall be paid from the Insurance Fund as eitheran administrative expense or charged to the benefiting state agency, agenciesor participating local public bodies.
(3)The department shall not implement any plan of self-insurance insuring any partof the liability of the state or its officers, employees or agents under ORS30.260 to 30.300 until after the plan has been submitted to and approved by theJoint Ways and Means Committee of the Legislative Assembly, if the legislatureis in session, or the Emergency Board. [1975 c.609 §7; 1981 c.109 §17; 1985c.731 §15]
278.130Employment of staff assistance; payment for services by Attorney General. The OregonDepartment of Administrative Services may employ such professional services andother personnel deemed necessary, other than defense counsel, to carry out theadministration of this chapter and ORS 30.260 to 30.290 and 278.322. TheAttorney General may employ defense counsel and shall charge the department forthe cost of the services of the defense counsel and the Attorney Generalrequired under these statutes, and such costs and the costs incurred by thedepartment in the administration of these statutes shall be paid out of theInsurance Fund. [1975 c.609 §8; 1981 c.109 §18; 1985 c.731 §16; 1993 c.500 §27]
278.135 [1975 c.609 §9;repealed by 1985 c.731 §32]
278.140 [1979 c.669 §3;repealed by 1981 c.109 §24]
278.145 [1981 c.109 §21;repealed by 1985 c.731 §32]
278.150Special Liability Revolving Fund; accounting for moneys disbursed. (1) The OregonDepartment of Administrative Services may draw a warrant on the State Treasuryfor the sum of $75,000 payable out of the Insurance Fund. The amount drawnshall be credited to a Special Liability Revolving Fund which shall be carriedwith the State Treasury, separate and distinct from the General Fund, and shallbe used by the department when it is necessary or desirable to make immediatepayments on liability claims. Interest earned by the fund shall be credited tothe fund.
(2)The department shall file at least once each month a verified voucher coveringcurrent disbursements from the Special Liability Revolving Fund. The vouchershall be accompanied by an itemized statement showing the names of the persons,firms or corporations to whom and the purposes for which the disbursements weremade.
(3)Upon receipt of the voucher, the department shall draw a warrant on the StateTreasury in favor of the department payable out of the Insurance Fund. Theamount drawn shall be deposited in the Special Liability Revolving Fund andshall be for a sum sufficient only to replenish the Special Liability RevolvingFund. [1981 c.109 §20; 1985 c.731 §17; 1989 c.966 §12; 1993 c.500 §28]
Note: 278.150 wasadded to and made a part of ORS chapter 278 by legislative action but was notadded to any smaller series therein. See Preface to Oregon Revised Statutes forfurther explanation.
INSURANCEFOR MOTOR VEHICLES OWNED BY GOVERNMENT
278.200“Motor vehicle” defined for ORS 278.205 and 278.322. As used in ORS278.205 and 278.322, “motor vehicles” includes commercial buses, as defined inORS 801.200. [1979 c.842 §5; 1983 c.338 §905; 1985 c.16 §454; 1987 c.158 §37]
278.205Certificates of insurance; coverage; personal injury protection benefits;rules.(1) The Oregon Department of Administrative Services may issue a certificate ofmotor vehicle liability insurance and make assessments therefor.
(2)When issued on vehicles owned by local public bodies, such insurance shall alsoinclude uninsured motorist coverage and may include personal injury protectionbenefits and shall provide at least the minimum coverages and amounts set forthin ORS 742.500 to 742.542. However, at the request of a local public body, thedepartment may provide uninsured motorist coverage or personal injuryprotection benefits for the motor vehicles owned by the local public body inamounts greater than those required under ORS 742.500 to 742.542.
(3)When issued on state-owned vehicles furnished for public use including, but notlimited to, use authorized under ORS 276.598, such insurance shall includeuninsured motorist coverage and personal injury protection benefits and shallprovide at least the minimum coverages and amounts set forth in ORS 742.500 to742.542.