Legal Developments

Insurance – Part 3

Church Law and Tax 1989-11-01 Recent Developments Insurance Richard R. Hammar, J.D., LL.M., CPA •

Richard R. Hammar, Attorney, CPA
Bio

Church Law and Tax 1989-11-01 Recent Developments

Insurance

Richard R. Hammar, J.D., LL.M., CPA

• A federal district court in Minnesota resolved a dispute between a church-operated school and its liability insurance company regarding payment of a claim. The school had purchased a policy insuring against wrongful acts of its employees. While the insurance was in force, a female employee notified the school principal that she intended to resign. The principal informed her that her husband (who also was an employee of the school) would be fired if she quit. Soon after this conversation, the wife resigned and the husband was fired. The husband filed a “marital discrimination” claim against the school under a Minnesota human rights law, and the school eventually settled the claim with the husband for $15,000. The insurance company refused to reimburse the school for the amount of the settlement on the grounds that (1) the settlement did not constitute an insurable loss under the policy, (2) the school should not able to insure itself against unlawful actions by its employees, and (3) employers should not be permitted to “shift” their labor costs onto their insurers. The court rejected all of these claims. It concluded that the school’s settlement of the discrimination claim was a “loss” under the insurance policy since it was a liability resulting from an employee’s wrongful act. It further noted that insurance company had “failed to show that unlawful acts relating to termination of employment are uninsurable.” Convent of the Visitation School v. Continental Casualty Co., 707 F. Supp. 412 (D. Minn. 1989).

© Copyright 1989, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided 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. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m50 m65 c0689

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.

Related Resources

Visit Store

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
caret-downclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaytwitter-square