Each year I review 12,000 published and unpublished rulings by state appellate and federal courts pertaining to religious organizations to analyze the reasons that churches end up in court. This research guided my keynote address at the 2012 Christian Legal Society conference on the top five reasons that churches went to court in 2011. I have summarized that keynote address below, which includes an explanation of potential disputes and what churches might do in advance to mitigate their risk:
5. Insurance Coverage Disputes
It is common for churches and their insurers to end up in court, often in a declaratory judgment action to determine if coverage is available under a church's policy for a particular claim. Common types of coverage disputes are summarized below:
- The Intentional Misconduct Exclusion. Commercial general liability (CGL) insurance policies generally exclude intentional or criminal acts from coverage. Some policies specifically exclude coverage for sexual offenses. Insurers often assert such exclusions in cases of sexual molestation of minors by church employees and volunteers, since such acts are both intentional and criminal. But churches typically respond to such coverage denials by asserting that the exclusion does not apply since they were not guilty of intentional or criminal acts. Rather, they are being sued on the basis of negligence. The courts have come to different conclusions in such disputes. This illustrates the importance of church leaders being familiar with the terms of their church's CGL policy, and providing for sexual misconduct coverage as a separate policy or endorsement if necessary.