Does Liability Insurance Cover Sexual Assault and Abuse Settlements?
Most insurance policies do not provide insurance against the intentional, wrongful acts of the insured. Thus, in a claim against the perpetrator of a sexual assault or abuse, his homeowner's, automobile or business insurance policy will not cover the claim. This means that a court judgment against the sexual assault or abuse perpetrator would have to be paid by him individually and not by any insurance that he had. The situation is different for negligence liability claims against the employer of the perpetrator or the landlord, rock promoter, or hotel that provides inadequate security. Although these insurance policies usually do not cover the intentional criminal acts of the insured, the policies have frequently been found to cover these types of sexual assaults. The courts have reasoned that the intent of the sexual abuse perpetrator is not to be attributed to his corporate employer or the security provider whose negligence permits the sexual assault. The leading sexual assault case in Massachusetts arises from the infamous Fells Acre Day School where there were multiple alleged sexual assaults on the school's students by the family of the founder. In the school corporation's dispute about insurance coverage with its insurer, the Massachusetts Supreme Judicial Court wrote: "... if the alleged acts of abuse were in any way performed on behalf of the corporation, the abuse would be attributable to the corporation. For example, if it were shown that the individual defendants were engaged in the sale of child pornography and that the corporation was financially implicated in such activity, the intentions of the wrongdoers properly could be imputed to Fells Acres. Similarly, if it could be shown that abuse at the school was so routine as to constitute a general practice or policy, the abuse could be imputed to Fells Acres, even if the abuse was not committed for the benefit of the corporation.....The fact alone that the corporation's officers and shareholders committed intentional torts would not be sufficient to warrant imputing their expectations or intentions to Fells Acres." There will be few, if any circumstances, when an employee's sexual assault or abuse is performed on behalf of his corporate employer. Thus, the corporate employer's ordinary business liability insurance policy should provide coverage, at least for the negligence claims arising from the sexual assault and abuse. There are many other fact permutations which can and have arisen in which insurance coverage issues become the primary focus in cases of sexual assault and abuse. Often, the negligence lawsuit against the perpetrator's employer results in another lawsuit with the employer's insurance company to determine whether there is insurance coverage. An experienced personal injury attorney is essential for guiding a victim of sexual assault and abuse through this lawsuit maze.