Does Your General Liability Policy Cover Sex Abuse / Molestation?

Huge settlements and payouts on sex abuse / molestation cases have decimated insurance carriers that write sports General Liability for national sports governing bodies, leagues, and teams. As a result, most General Liability carriers are reluctant to offer coverage for sex abuse / molestation unless the sports organization has a system in place to run background checks on all staff with access to youth.

The major sources of lawsuits in the sports context are for failure to screen, failure to respond to an allegation, and failure to implement other policies and procedures to make abuse / molestation less likely to occur. A comprehensive risk management plan must address all of these areas.

General Liability insurance carriers take one of the following basic approaches to coverage for abuse / molestation:

1. They have a specific exclusion that eliminates coverage.
2. The policy is “silent” on the issue. In most states, courts rule that coverage is provided if the policy is “silent” on the issue.
3. There is an affirmative grant of coverage with a specific limit allocated such as $1,000,000 Each Occurrence and $1,000,000 Aggregate for multiple occurrences during the policy year. In my opinion, this is the prefferred approach.

A comprehensive risk management program including high quality background checks is essential; however, it’s also of critical importance to have adequate liability coverage for abuse / molestation in case something slips between the cracks.

The National Alliance For Youth Sports has an excellent Team/League endorsed insurance program through Sadler Sports Insurance that includes coverage for sex abuse / molestation lawsuits. This program has pre published rates on a per team basis for both Accident and General Liability. In addition, clients of Sadler Sports Insurance have exclusive access to training videos on how to implement an abuse / molestation risk management plan and awareness training for all administrators and staff. Visit www.sadlersports.com/nysca for more information.

Source: John Sadler, President of Sadler Sports & Recreation Insurance

Sports Insurance