What does sexual misconduct liability insurance cover? Also know as sexual misconduct and molestation liability, this policy offers protection for businesses against allegations of sexual misconduct and molestation by employees or officers.
Sexual Misconduct Liability Insurance
Certain commercial general liability insurance policies will offer coverage for specific types of sexual misconduct. However, these policies also exclude many acts that are considered sexual misconduct.
Should your general liability not cover a specific type of sexual misconduct and a claim is filed against your company, you could be looking at serious legal issues, reputational damage and hefty costs. The best way to assure coverage against these types of claims is with sexual misconduct liability insurance coverage.
What Is Sexual Misconduct Liability Insurance?
Sexual misconduct and molestation liability insurance is a specialty form of coverage. It is specifically designed for business owners and was developed to provide protection against the financial losses and damaged reputation that can be associated with sexual misconduct or molestation allegations.
As a business owner, it might be hard to imagine an employee committing an act of improper sexual conduct; however, you know that there is always a possibility that sexual abuse in the workplace can occur. In order to safeguard your business in the event that an employee does commit a heinous act, it's wise to invest in sexual misconduct liability insurance coverage.
What Does Sexual Misconduct Insurance Cover?
Though coverage will differ from policy to policy and from insurer to insurer, the following features are usually covered by a sexual misconduct and molestation policy:
- Legal fees associated with alleged or real claims sexual misconduct claims filed that are filed by an employee (see employment practices liability insurance ).
- Compensation that may be awarded to a claimant who files sexual misconduct.
- Fees associated with controlling and repairing a company's reputation after a sexual misconduct claim has been filed - whether alleged or real.
- Negligent hiring.
- Failure to report employees who commit acts that are considered sexual misconduct or molestation.
The cost of sexual misconduct claims can be astronomical. Acts of sexual abuse and molestation, harassment, and improper sexual conduct are not legally tolerated in the workplace. Should an employee commit any of these acts against another employee or a client, a company could be held liable and have to pay hefty legal fees and compensation to the person who filed the claim. Moreover, the damage that these types of lawsuits can cause to the reputation of a company can be severe and costly to repair. Sexual misconduct liability insurance offers the coverage that is necessary for any legal fees, compensation, and reputation management that occurs as a result of a sexual misconduct claim./
Who is Covered by Sexual Misconduct & Molestation Insurance?
Again, those who are covered by this type of policy will differ from insurance company to insurance company; however, generally, a sexual misconduct liability insurance policy will provide coverage for the following individuals:
- Executive officers
Who Should Have Sexual Misconduct Liability Insurance Coverage?
Any company that hires employees or that works with the public should have this coverage. Employees can commit acts of sexual misconduct or molestation against other employees, or they can commit them against anyone whom they work with, including clients and other individuals that they serve. Examples of business or organizations that should not overlook having this type of insurance coverage include:
- Bus transportation
- Daycare facilities
- Transportation companies
A current example is the Los Angeles County Office of Education (LACOE) - which now requires certain contractors for the The Greater Avenues for Independence (GAIN) Program - to carry Sexual Misconduct Libility in the amount of $2,000,000 per cliam for acts of abuse, molestation, harassment, mistreatment or maltreatment of a sexual nature.
How Does Sexual Misconduct Insurance Work?
Allegations of sexual misconduct need to be taken seriously and handled seriously, and sexual misconduct liability insurance can ensure that these types of allegations are handled properly. This coverage works by paying for any legal expenses that may be associated with defending a claim that has been brought against an employee, a contractor, or the employer by another employee, clients, or other individuals that are associated with the organization. Abuse and molestation insurance cost, stand alone abuse molestation insurance, abuse and molestation insurance application & monoline abuse and molestation insurance.
Sexual Misconduct Liability Court Cases
SEXUAL HARASSMENT ALLEGATIONS HELD NOT TO BE COVERED "OCCURRENCE"
When a primary general liability insurer and an umbrella liability insurer declined to defend a sexual harassment lawsuit brought against their insured, the insured provided its own defense and received a verdict in its favor. The insurers sought a summary judgment relieving them of any obligation to pay the insured's attorneys' fees and court costs.
The court limited its attention to whether or not the alleged acts of the insured's employee were within policy coverage for "occurrences".
The insured stressed that the definition of "occurrence" in the primary policy included damages "neither expected nor intended from the standpoint of the insured." It also pointed to the following definition in the umbrella policy: "'Occurrence' means an accident, including continuous or repeated exposure to conditions, which results in personal injury, property damage or advertising liability neither expected nor intended from the standpoint of the insured."
The court cited numerous cases in point in which it was held that "identical or substantially similar definitions of 'occurrence' have been consistently interpreted as excluding coverage for intentional acts." It concluded that the claims for sexual harassment in this case "allege intentional acts that are not 'occurrences' for the purpose of policy coverage and there is no policy provision that creates a duty to defend under the facts...."
The motions of the insurers to relieve them from payment of the insured's attorneys' fees and costs were granted.
(OLD REPUBLIC INS. CO., Plaintiff v. COMPREHENSIVE HEALTH CARE ASSOCIATES, INC. ET AL., Defendants, Third-Party Plaintiffs v. UNIGARD SECURITY INS. CO., Third-Party Defendant. U.S. District Court, Northern District of TX, Wichita Falls Division. Civ. A. No. 7- 90-46-K. March 25, 1992. 786 F.SuPP. 629. CCH 1992 Fire and Casualty Cases, Paragraph 3789.)
POLICY'S SEXUAL MOLESTATION EXCLUSION UPHELD
The insureds' minor son sexually molested a neighbor's children while he was babysitting them. The neighbors brought a civil action against the insureds and their son alleging negligent supervision, negligent entrustment, loss of consortium, and assault and battery. The insurer denied the claim on three grounds:
- That the actions of the minor son did not constitute an "occurrence" as defined in the policy
- That the policy excluded coverage for acts "expected or intended by one of more insureds", and
- That the policy excluded coverage for bodily injury "arising out of sexual molestation."
The insureds and the neighbors jointly filed a declaratory judgment to determine the extent to which the insurer was obligated to provide coverage. The court found that the alleged negligent supervision and negligent entrustment were "occurrences," that the intentional act and sexual molestation exclusions were ambiguous and did not preclude coverage, and that the policy covered the claims. The insurer appealed.
The Appellate Court stated that the language of the policy must be construed, as would a reasonable person based upon a more than casual reading of the policy as a whole, giving the language its natural and ordinary meaning when the terms were clear and unambiguous. Noting that an insurer is free to limit its liability by using exclusions that are written in clear and unambiguous language, the Court determined that the wording used in the sexual molestation exclusion was clear and applied to the entire policy.
The insureds and neighbors argued that other courts had reached different conclusions in interpreting similar exclusions and applied the phrase "arising out of" more broadly to include acts due to an insured's negligence. In response, the Court stated that there would have been no injuries or damages under the negligence claims absent the sexual molestation charges. Therefore, the alleged bodily injuries did “arise out of” the excluded act of sexual molestation and coverage was therefore precluded. The Court did not consider whether the intentional act exclusion applied as the sexual molestation exclusion already precluded all coverage.
Jennifer Philbrick and another v. Liberty Mutual Fire Insurance Company, SpCtNH, No. 2007-042. Filed October 31, 2007. Reversed.
Sexual Misconduct Liability Insurance - The Bottom Line
We hope this article on sexual misconduct liability insurance was informative. Cases of sexual misconduct occur all the time. Employees are sexually harassed, clients are touched inappropriately, and various other types of misconduct occur on a regular basis. Should an organization face claims related to such misconduct, the effects of those claims can be devastating. Having the proper insurance coverage can help to safeguard a company and the entities that it associates with in the event that sexual misconduct claims are filed. Abuse and molestation insurance cost, stand alone abuse molestation insurance, monoline abuse and molestation insurance, abuse and molestation insurance application, abuse insurance and insurance coverage for sexual abuse or molestation.