The CNN story could not have been any more devastating. Here’s just the opening:
“Some of the victims can’t speak. They rely on walkers and wheelchairs to leave their beds. They have been robbed of their memories. They come to nursing homes to be cared for.
“Instead … the unthinkable is happening at facilities throughout the country: Vulnerable seniors are being raped and sexually abused by the very people paid to care for them.
“It’s impossible to know just how many victims are out there. But through an exclusive analysis of state and federal data and interviews with experts, regulators and the families of victims, CNN has found that this little-discussed issue is more widespread than anyone would imagine.”
Perhaps more disturbing is that the problem is expected to only grow as the nation’s population ages; the number of Americans over age 65 is projected to more than double by 2050.
As shocking as CNN’s report is, it also underscores one of the biggest problems we see whenever we examine the policies of assisted-living and nursing home facilities: the lack of insurance coverage for abuse or molestation of someone in their care.
Sexual abuse and molestation coverage emerged after a string of sex abuse scandals rocked the Catholic Church in the 1980s and ’90s.
Insurers suffered big losses as a result of those crimes and, recoiling, changed their policies to exclude sexual misconduct. Later, however, they began to offer coverage specifically designed to address instances of sexual misconduct.
Sexual abuse and molestation coverage can be purchased as a separate policy, or it can be combined with a General and Professional Liability policy.
Primary limits of $1 million on each claim are available and, in some cases, a $2 million aggregate can be had. Excess limits also can be purchased.
The language of these policies, however, varies widely. Among other practices, insurers might set limits that are much too low. Or they will limit the scope of their policies by excluding coverage for the acts of known perpetrators. They also include sexual misconduct-specific definitions so that they can deny coverage unless the action falls within the narrowest of definitions. And they have been known to exclude coverage if the allegation involves minors.
In other words, there’s a very good chance the fine print in these policies will trip you up.
How big is this issue? Just ask the nation’s second-largest public school district.
The Los Angeles Unified School District in early April had to go to court to sue seven insurance companies for at least $40 million for refusing to provide coverage of claims that a third-grade teacher molested students for years.
(This case involves a school, rather than a nursing home or assisted-living center, but the same insurance principals apply).
“The insurers wrongfully abandoned the school district, forcing it to defend itself and utilize its own much-needed resources to fund its own defense of covered or at least potentially covered claims against it,” the district said in its lawsuit.
The insurers apparently declined the claims even though at least one policy specifically said it covered “all claims arising from continuous, related or repeated occurrences of either sexual abuse or sexual molestation,” according to Courthouse News Service.
The bottom line here? Make sure you (or your insurance broker) has identified – and closed – your coverage gaps and that you’re buying the right policy for your business.
Jeff Parent is an Insurance Advisor and Registered Professional Liability Underwriter at CCIG. Reach him at JeffP@thinkccig.com or at 720-330-7918.
Note: If you have any questions on this topic, don’t hesitate to either comment below or reach out to Jeff directly.Back to Resources