Sex abuse scandal has insurers clashing

Sex abuse scandal has insurers clashing | Insurance Business

Sex abuse scandal has insurers clashing

Major insurers face claim bills of up to $44m arising from the scandal surrounding the late children’s television presenter and alleged sex offender Jimmy Savile.

According to UK insurance magazine Post, Aviva, RSA and Allianz were the BBC’s primary insurers between 1971 and 2006, when the scandal took place. QBE provided PL cover in the 1980s and Chubb was the lead insurer between 1996 and 2009.

It understands that Aviva covered the broadcaster for 49% to 55% with a limit of up to £1m, which then rose to £5m, and RSA insured the BBC for 10% to 25%, with a limit of £1m which also rose to £5m.

Around 600 people have accused the late Savile of sexual offences. The tales of his abuse sent shockwaves throughout the world. More TV stars have been arrested by police on suspicion of sexual offences against children, during the 70s and 80s, including an Australian children’s television presenter.

The shocking scandal will force risk managers across the world to be even more careful when recruiting personnel, particularly if staff are to come into contact with children.

“There are lessons that can be learnt from this,” Robert Cooper, director of Cooper Professional Risks said. “Risk management processes will try to clearly vet references for new appointments, and on-going updates are an obvious solution.”

The scandal has also cast new light on the sexual molestation exclusion on liability policies.

“Most insurers, if they think there is an exposure to children may choose to put a “sexual molestation” exclusion liability. Thus is obvious when it is a school or kindergarten but is it so obvious when an entertainer or a broadcaster?”

Some brokers such as Aon provide sexual molestation cover in childcare insurance policies.

Cooper hopes Australian insurers not taken a different route as they try to learn from the scandal.

“It could be that insurers make sexual molestation exclusion standard in every policy and not simply reserve it for children-related occupations. Who knows? I hope not.”

Tony Christian, CEO of South East Queensland Insurance Group, said the scandal served as reminder of the industry was exposed to.

“Insurers might be more cautious,” he added, “particularly when it comes to insuring entertainment events.”

Another broker added it will be harder for businesses that come into contact with children, to get cover. He added: “This incident points to a historical naivety. A lot of organisations now should have common sense-based protocols for this sort of thing.”

Most insurance policies come with a general exclusion, which removes any ability to claim for molestation, sexual of other forms of abuse. Church insurer Ansvar replaces this with a “known offenders” clause, where the organisation has acted “reasonably” to keep young people safe. In these instances, the organisation will be covered in the event of a claim against a leader.”

Ansvar CEO Andrew Moon said there will be “much to learn” when the full Jimmy Savile investigation has concluded.

“Ansvar has always had a high standard which it expects of its clients and this is unlikely to change to a material degree.  What will be a matter of focus will be the insured's compliance with the protocols that exist. “

Moon said there was a slight upward pressure on rates but noted that the Royal Commission and the Victorian Parliamentary Sub-committee hearings into how religious and other non-government organisations handle child abuse could have an impact.