Insurance Coverage for Multiple Acts of Sexual Abuse
What constitutes a separate "occurrence"?

TIG Insurance Company v. YMCA 172 S.W.3d 652 (Tex. App. 2005)

Background. When church leaders learn that a young child has been sexually molested by an employee or volunteer worker, other victims often emerge. Why? Because pedophiles are both predatory and promiscuous. The existence of multiple victims raises important questions regarding the amount of insurance coverage that is available, as a recent case illustrates.

Facts. In the summer of 1999 a counselor at a YMCA summer youth camp allegedly sexually and physically assaulted six children attending the camp. The parents of the children sued the YMCA for negligent hiring practices. Three of the lawsuits were collectively settled for $6 million, with YMCA's liability insurer contributing $1 million towards the settlement.

A question arose as to the liability of YMCA's insurer for the remaining three lawsuits. The YMCA's insurance policy contained a $2 million "General Aggregate Limit" and a $1 million "Each Occurrence Limit." However, the policy also included a "Sexual Abuse Occurrence Coverage" endorsement form. This form stated that it modified coverage provided under the general liability coverage form. It defined a "Sexual Abuse Occurrence" as:

A single act, or multiple, continuous, sporadic, or related acts of sexual molestation or abuse caused by one perpetrator, or by two or more perpetrators acting together. All acts of "Sexual Abuse Occurrence" by an actual or alleged perpetrator or perpetrators, including "Negligent Employment" of such perpetrator or perpetrators, shall be deemed and construed as one occurrence which takes place when the first act of sexual molestation or abuse occurs, regardless of the number of persons involved, or the number of incidents or locations involved, or the period of time during which the acts of sexual molestation or abuse took place.

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