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Insurance

A California court ruled that a "sexual misconduct" exclusion in a school's liability insurance policy applied not only to a teacher who molested several students, but also to negligent supervision and negligent retention claims.

Key point 10-16.7. A liability insurance policy provides a church with a legal defense to lawsuits claiming that the church is responsible for an injury, and it will pay any adverse settlement or judgment up to the limit specified in the policy. Liability insurance policies exclude a number of claims. For example, some policies exclude injuries based on criminal or intentional acts and claims for punitive damages. A church has an obligation to promptly notify its insurer of any potential claim, and to cooperate with the insurer in its investigation of claims.
Negligence as a Basis for Liability

* A California court ruled that a "sexual misconduct" exclusion in a school's liability insurance policy applied not only to a teacher who molested several students, but also to negligent supervision and negligent retention claims brought against the school by victims of the teacher's acts. A ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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Posted:
  • May 1, 2003

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