The headlines in last week’s paper read: “Counselors indicted for alleged abuse.” The counselors were indicted and fired over allegations that they physically abused a disabled man in their care. Not only is this a potential felony for the counselors, but it also brings a huge threat to the reputation and financial sustainability of the facility. As such, I am revisiting this same topic that I first wrote about, last year, in Rescue Magazine [July/Aug, 2013]
In that article, I provided some recommendations in regards to making sure you have Abuse & Molestation (“A&M”) coverage in your General Liability insurance contract, as well as, running criminal background checks on staff and volunteers who have access to your guests in situations where an A&M claim could be alleged. I would like to provide particulars on what to look for in your current coverage, since no two insurance policies cover A&M in the same manner. Some policies are very good, while others are so bad that it borders on worthless, and deception.
- Some insurance policies restrict coverage to vicarious liability only, but not direct liability. Vicarious liability is when we are held liable for another person’s conduct. But what if a mission is held liable for the direct cause of the abuse? In this case, the insurer would not have to pay damages or even defend the mission. An example of vicarious liability would be where a mission is accused of wrongfully hiring the counselor who was alleged to have committed the A&M action. However, if the claim against the mission alleges that it was the mission’s fault for the A&M incident that would be direct liability. Some policies read, “We [the insurance company] will pay those sums that the insured is legally obligated to pay as ‘damages’ because of ‘bodily injury’ to which this insurance applies, if the insured [the mission] is alleged to be liable for another person’s ‘abusive conduct’….” This is a vicarious liability provision and not direct negligence. If the lawsuit against the mission alleges direct liability, and this wording is contained in your insurance policy, there would likely be no coverage, or even a defense provided, even though the policy provides an A&M coverage provision.
- Is bodily injury required? If the allegation against the mission is for emotional or mental distress, and bodily injury is required by your insurance policy’s A&M coverage form, coverage would likely not be provided.
Space does not allow me to finish this list of things to know about this very important topic. Keep an eye out for part 3.
Latest posts by Brian H. Merriam, CPCU, ARM, AAI, President (see all)
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