• Key point. Church insurance policies often exclude persons who engage in intentional or criminal acts, including sexual misconduct, from any coverage under the policy. Perpetrators of such acts must obtain and pay for their own attorney, and they are personally responsible for paying any portion of a judgment or settlement allocable to their acts. Churches generally are not subject to such exclusions, especially if they are sued on account of their negligence in selecting, retaining, or supervising the perpetrator.
A Louisiana court ruled that a church insurance policy did not provide any coverage for a pastor who was sued as a result of his sexual molestation of a minor girl. The parents of a minor girl sued their pastor and church as a result of the pastor's sexual molestation of the girl. The church had a liability insurance policy designating it as the named insured. In addition to the named insured, the policy also insured "any officer, director, fiduciary, elder, deacon, vestryman, councilman, clergyman or any member of the board of trustees, governors or board of education, but only while acting within the scope of his duties as such." The pastor claimed that he was covered under this language, and so the insurance company had a duty to provide him with a legal defense of the lawsuit and pay any portion of a judgment or settlement based on his acts. A state appeals court disagreed. It noted that the policy stated that the insurance company "will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to any person arising out of sexual misconduct or sexual molestation which occurs during the policy period." However, the policy lists several exclusions, the very first of which is the following: "This insurance does not apply … to any person who personally participated in any act of sexual misconduct or sexual molestation." The court concluded that this language "clearly and unambiguously excludes coverage for the alleged acts of the [pastor]."