Physical abuse and sexual molestation liability
Abuse and Molestation Insurance as an endorsement to the Commercial
General Liability policy in a form and with coverage that are satisfactory to
the State covering damages arising out of actual or threatened physical abuse,
mental injury, sexual molestation, negligent: hiring, employment, supervision,
investigation, reporting to proper authorities, and retention of any person for
whom the Contractor is responsible including but not limited to Contractor and
Contractor’s employees and volunteers. Policy endorsement’s definition of an insured shall include the
Contractor, and the Contractor’s employees and volunteers. Coverage shall be written on an occurrence
basis in an amount of not less than $________________ per occurrence. Any annual aggregate limit shall not be less
than $______________________. These
limits shall be exclusive to this required coverage. Incidents related to or arising out of physical
abuse, mental injury, or sexual molestation, whether committed by one or more
individuals, and irrespective of the number of incidents or injuries or the
time period or area over which the incidents or injuries occur, shall be
treated as a separate occurrence for each victim. Coverage shall include the cost of defense
and the cost of defense shall be provided outside the coverage limit.
When do they apply?
- Use when contracting for services that will involve a contractor having
any kind of custodial care over a client of the state (client meaning someone
in the care, custody, control of the state).
- Examples of services contracted
with where this coverage should be considered includes, but is not limited
to: Day care services, assisted living
facilities, long term care and/or skilled nursing facilities, training centers,
group homes (that are contracted with), etc.
- Contracting for a services is different than a state agency certifying
or licensing a facility. This coverage
applies when a state agency is contracting
- Physical abuse, and sexual molestation
insurance is insurance coverage that protects against losses related to
lawsuits arising from claims of physical and/or sexual abuse. This abuse can
include molestation, physical blows, inappropriate touching, mental injury and
more. A company, non-profit, or other organization may be sued for physical
and/or sexual abuse allegedly enacted by an employee, volunteer, or other
associated personnel. Certain businesses
at a higher risk of fielding such lawsuits often purchase such a policy.
- Coverage should be requested to include damages due to negligent hiring,
employment, supervision, investigation, reporting to proper authorities
(failure to report), and retention of any person for whom the Contractor is
legally responsible which may include but is not limited to: the Contractor, Contractor’s
employees, volunteers, board members and staff.
- This insurance also covers cost of defending against claims of physical
abuse and sexual molestation, which can be very expensive. Even claims without merit can result in high
defense cost. This policy can help
policyholders shoulder the cost of such claims and lawsuits.
- Coverage is provided as an endorsement to the Commercial General
Liability policy. It is important to
require separate and dedicated dollar limits for this coverage.
- Defense cost should be provided outside the coverage limit so it does
not erode coverage available for claim settlements.
- Due to a potentially long lapse of time between the alleged incident and
when the incident is reported, it is important for coverage to be on an
occurrence bases, rather than on a claims made basis. This means if the alleged incident occurred
when a policy was in place, then coverage will be available regardless of when
the incident is reported (though legal statutes of limitations may apply).
- Contractors susceptible to claims of this nature should consider
implementing and following sound policies and procedures regarding:
hiring/screening/back ground checks; preventative measures for avoiding
potential misconduct; supervision/monitoring of employees; investigation and
reporting procedures of any alleged incident.
- $1,000,000 of coverage per occurrence with an aggregate limit of no less
than $3,000,000 is a common and available level of coverage. Additional coverage can be added up to, for
example, $3,000,000 or $5,000,000 per occurrence, by adding an umbrella policy
providing the same coverage as the underlying abuse and molestation insurance.
- Assess the risks of the particular contract to determine appropriate insurance
limits and risk control measures.
- Ask questions such as, but not limited to:
- Does the contractor have and follow sound policies and procedures
regarding: hiring/screening/back ground checks; preventative measures for
avoiding potential misconduct; supervision/monitoring of employees;
investigation and reporting procedures of any alleged incident?.
- Will such (or similar) requirements be included in the contract?
- How long has the contractor been in business? How much experience do they have?
- Do they currently carry such insurance?
- Do they have a history of such claims being made against them?