Boy Scouts sue insurer over sex-abuse settlements

Boy Scouts sue insurer over sex-abuse settlements | Insurance Business America

Boy Scouts sue insurer over sex-abuse settlements
The Boy Scouts of America is taking legal action against a unit of a leading property/casualty insurer, claiming the company refused to provide insurance coverage for settlements of child sex-abuse cases from the late 1970s.

The organization alleges that National Union Fire Insurance Company – a Pittsburg unit of American International Group – neither defended nor settled the claims that were brought by sex abuse victims from 1975 to 1980 and totaled about $60 million. The lawsuit is arguing breach of contract and seeks a court order directing National Union to provide coverage for this and any future sex-abuse litigation.

The Boy Scouts of America were covered by umbrella and excess liability policies from National Union during the time of the complaints. The insurer, however, refused to take part in mediation of a claim involving a scout named “A.J.” who sought compensatory and punitive damages, which were resolved in what the complaint terms a “reasonable settlement.”

The complaint was filed in Dallas federal court Tuesday, and does not specify the number of sex-abuse cases made or currently pending against the Boy Scouts of America.

The suit comes one month after similar sex abuse charges have left the Catholic diocese in the US in danger of footing the bill for 100 claims. Insurers have not paid for settled claims, based largely on evidence that the involved archdiocese knew about the abuse and did nothing to prevent it.

Neither the Boy Scouts of America nor AIG commented on the case, which is Boy Scouts of America v. National Union Fire Insurance Company of Pittsburgh PA. The presiding judge is Jane J. Boyle.