Insurance Companies’ Responsibility for Sexual Misconduct Trials

Recent case shows a church’s insurance policy may not cover costs from these trials.

Church Law and Tax 1993-07-01 Recent Developments


Key point: Church insurance companies may be under no obligation to provide a legal defense or pay any portion of a legal judgment or settlement in cases involving sexual misconduct by church staff members in the course of church activities. These limitations may apply not only to the sex offender, but also to the church itself.

A federal appeals court ruled that a church insurance company was under no legal obligation to provide a legal defense to a church or its board of directors in a lawsuit alleging that a church volunteer had sexually molested a young girl. A volunteer church bus driver sexually assaulted and molested two young girls he was transporting to a church activity. He pled guilty to various sex offenses, and was sentenced to 20 years in a state penitentiary. The girls’ parents filed lawsuits against the offender, the church, and the church board. The parents alleged that the church and its board were negligent in failing to investigate the background and record of the driver before using him, and also in failing to dismiss him when they became aware of his aberrant behavior. As a result of this negligence, the girls “suffered injuries of mind and body.” The church’s insurance company refused to provide the driver, the church, or the church board with a legal defense to the lawsuit, and denied any obligation to pay any judgment rendered in the case. The insurer based its position on the following language in the church’s insurance policy: “This policy does not apply … to personal injury arising out of the willful violation of a penal statute or ordinance committed by or with knowledge or consent of any insured.” The policy defined the term insured to include any duly appointed volunteer. The church and church board conceded that the insurance policy did not protect the driver, but they insisted that they were being sued solely on the basis of their negligence and accordingly the insurance policy should cover them. The appeals court rejected the position of the church and church board. It observed:

[T]here is conclusive proof [of a willful violations of penal statutes] by guilty pleas and criminal convictions on both such charges …. We cannot agree with the [argument of the church and church board] that the cases can be viewed as involving only the negligence allegations and the negligent entrustment theory. It is, instead, an essential element of [negligence] that [the driver] molested the girls and caused them injuries of mind and body. A cause of action for negligence depends not only upon the defendant’s breach of duty to exercise care to avoid injury to the plaintiff, but also upon damage or injury suffered by the plaintiff as a consequence of the violation of the duty. The sexual violations and resulting injuries cannot therefore be disregarded. And giving consideration to them, the exclusion in the policy is thus applicable providing that the policy does not apply “to personal injury arising out of the willful violation of a penal statute or ordinance committed by or with knowledge or consent of any insured.”

This case should be useful in motivating church leaders to take aggressive steps to deal with the risk of sexual misconduct by church workers (including volunteers). Many church insurance policies contain exclusions identical to the one in this case. It is possible that church insurance companies will use such an exclusion as a basis for refusing to provide a church (or church board) with a legal defense of a lawsuit arising out of the sexual misconduct of a church worker. This means that churches face a potentially enormous uninsured legal risk in such cases. This is significant, since the legal costs alone in such cases can be astronomical. And of course, so can jury verdicts. It is precisely because of this risk that we at Church Law & Tax Report have developed the Child Abuse Prevention Kit, consisting of a 96-page book (with several forms), an audio tape, and a video tape. This kit can be purchased for $49.95 from Church Law & Tax Report by calling 1-704-841-8066. If you already are a subscriber to our new Informational Support Program (ISP), you will receive the book and audio tape free of charge, and you can purchase the video for only $19.95. All American Insurance Company v. Burns, 971 F.2d 438 (10th Cir. 1992).

See Also: Liability Insurance

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay