Catholic archdiocese sues insurer over failure to pay claims in sex abuse cases

Catholic archdiocese sues insurer over failure to pay claims in sex abuse cases | Insurance Business

Catholic archdiocese sues insurer over failure to pay claims in sex abuse cases
A Connecticut Roman Catholic Archdiocese is taking its insurance company to court, the latest of several to respond to carriers who have refused to pay claims related to lawsuits against church officials for sexual assault.

The case, which opened Friday in New Haven, alleges that Allianz subsidiary Interstate Fire & Casualty Co. breached its contract with the Archdiocese of Hartford by refusing to reimburse the archdiocese for payments made in four settlements between 2010 and 2012. The church claims the insurer previously reimbursed payments made in other abuse settlements.

“The foregoing activities of Interstate constitute unfair trade practices, because they offend public policy and they are immoral, unscrupulous and unethical,” the complaint states.

Testimony began in a bench trial before US District Court Judge Janet Bond Arterton. At issue is whether Interstate and other insurers can deny claims under assault and battery exemptions in liability policies. Such policies do not cover intentional acts, but officials with the archdiocese claim they did not know about the alleged assaults.

Interstate has faced several lawsuits in other states for failing to reimburse church officials for similar priest abuse settlements, the Associated Press reported.

It has found some success; in 2014, the 9th US Circuit Court of Appeals in San Francisco ruled the insurer’s policy for the Diocese of Phoenix did not cover settlements of priest sexual abuse cases due to the policy’s assault and battery exception.

Other disputes between the Catholic church and its various insurers include the Diocese of Honolul, which sued First Insurance Co. of Hawaii in January for refusing to cover priest abuse settlements. And in 2014, the Archdiocese of St. Paul and Minneapolis sued a hefty 20 insurance companies in an attempt to force them to cover liabilities in sex abuse cases.

That lawsuit was put on hold after the archdiocese filed for bankruptcy last year.

The case in question involves sexual abuse claims against the Reverend Ivan Ferguson, who died in 2002 and was accused of misconduct against minors in the 1970s and 1980s. The archdiocese hs settled many claims of sexual abuse by its priests, having agreed in 2005 to pay $22 million to 43 people who said they were abused by clergy, including Ferguson.