Part Two
Insurance carriers that write General Liability insurance for sports and recreation organizations take two approaches to covering lawsuits alleging sexual abuse and molestation. Some carriers’ policy forms remain silent on the issue of coverage under the theory that it is covered if it is not excluded. This is usually true; however, some state case law may reach a contrary conclusion. However, most policy forms provide an affirmative grant of coverage for sexual abuse and molestation via a special endorsement.
For example, many carriers provide an endorsement that provides sex abuse and molestation coverage in the amount of $1,000,000 Each Occurrence and $1,000,000 Aggregate. Furthermore, the endorsement will usually include a laundry list of exclusions such as for the perpetrator himself, for remaining passive after an incident has come to the attention of management, etc.
Some policy forms may void sexual abuse and molestation coverage if the sports organization has not implemented a written procedure requiring a background check on all staff with access to youth.
In the event that a policyholder is a larger state, regional, or national organization with its own custom program, it needs to be verified whether the Sex Abuse and Molestation Aggregate applies to the entire program or separately to each individual named insured such as a league or club. Obviously, it is best if the Aggregate applies separately to each league or club.
Source: John Sadler
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