• 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].”
The pastor argued that it is inconsistent for the policy to say that it provides coverage for sexual molestation, but then deny it for the person who actually commits the act. In other words, such insurance is “illusory” in the sense that if it does not provide coverage for the perpetrator it is the same as providing no insurance at all. Not so, concluded the court:
Although the [pastor] is an insured under the policy, he is not the named insured. The named insured is the [church]. The policy is primarily for the protection of the church as the named insured, and only incidentally for the protection of the [pastor]… . It is clear that the sexual molestation insurance is to protect the church from, among other things any liability exposure it may have for the acts of such persons as the [pastor] for whose acts the church may ultimately be held responsible. The policy is obviously not intended to protect the perpetrator of such acts from responsibility and liability for his intentional acts of this kind … .
The court noted that “where child molestation is involved the public policy favors holding the molester responsible.” It explained this statement as follows:
This is a case about personal responsibility. [The pastor] is personally responsible for his acts of molestation and he is personally liable for them. The general theory of insurance is that certain losses are diffused among all members of society and this makes sense especially in case of losses due to floods, hurricanes, earthquakes, and other natural disasters. But the cost of damage caused by sexual molestation is not a burden that society as a whole should bear. It is an intentional act and it is a burden to be laid squarely upon the shoulders of the molester.
As a result, the court concluded that the church’s insurance policy did not provide coverage for the pastor. The court noted that the church was also sued as a result of its alleged negligent retention of the pastor. Specifically, the victim and her parents alleged that in spite of the church’s knowledge of prior sexual allegations against the pastor, the church placed him in a position that enabled him to commit the acts of molestation against the girl. The court concluded that the church’s insurance policy provided coverage for the church since it was being accused of negligent behavior.
Application. Most church insurance policies provide no coverage to persons who molest children. This means that they must obtain and compensate their own attorney and pay any portion of a judgment or settlement that is based on their acts. The costs of defending against such a lawsuit can be substantial, and this should serve as a practical deterrent to this kind of behavior. This is in addition to the deterrent of possible prosecution and imprisonment. However, as the court pointed out, church insurance policies often provide coverage to a church that is sued as a result of its negligence in selecting or retaining an employee or volunteer who later commits one or more acts of sexual molestation. The exclusion of the perpetrator from any coverage under the policy does not extend to the church itself. Stein v. Martin, 709 So.2d 1041 (La. App. 1998). [Seduction of Counselees and Church Members, Negligence as a Basis for Liability]
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