Diocese Sells Land To Fund Settlement With Sex Abuse Claimants

A Roman Catholic diocese in Cincinnati has sold some of its land for $25 million to finance an $85 million settlement that will end the nation’s only sexual abuse class action. The Covington Diocese will put up about $40 million total and its insurers will pay $44 million.
In light of this earlier post, you might wonder why liability insurance covers sexual abuse by a clergyman. When the insurance was written, I doubt anyone thought insurance covered liability for sexual abuse, or even that sexual abuse was something that would be redressed through tort law. After several high profile criminal prosecutions of alleged sexual abusers, insurers began adding express exclusions to liability policies for sexual abuse and molestation. It was too late, however, for policies that had already been written, and most jurisdictions regard sexual abuse as “bodily injury” within the meaning of the typical liability policies issued during the 1960s and 1970s, as long as the harm was accidental from the standpoint of the insured.
As a matter of law, every or almost every jurisdiction that has considered the matter declares that all harm that stems from sexual abuse is intentional from the standpoint of the abuser. However, the abuse can often be said the be unintentional or accidental from the standpoint of the abuser’s employer, which can also often be held vicariously liable for the abuser’s acts, if they were committed within the course and scope of employment. The “course and scope” of employment is not interpreted literally, because no one hires a worker to molest people, any more than a company hires people to ram their delivery trucks into parked cars. So the bottom line is that the abuser’s own liability is seldom if ever covered by insurance, while the vicarious liability of the employer often or usually is (if the policy is old enough not to contain a sexual abuse exclusion).

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