Child Victims Act leads to insurance woes

City & State New York

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02/10/2020

 

About six months into the implementation of the Child Victims Act, more than 1,400 child sex abuse cases have been filed in New York. The law – which provides a one-year window for people to bring forward such lawsuits regardless of the statute of limitations – has resulted in a flood of lawsuits against Catholic Church in particular. The Roman Catholic Diocese of Rochester filed for bankruptcy in the aftermath of the law’s implementation – which victims’ advocates argued allowed it to bypass scrutiny for the alleged crimes – with the Buffalo Diocese expected to follow suit soon.

“What’s happening is that insurance policies from this point forward are excluding this risk from the policy,” Robert Chesler, an attorney at Anderson Kill who represents insurance policyholders, told City & State.

Insurers set aside reserves based on what they expect to pay on future claims, often using the statute of limitations to inform those estimates. When New York and other states began to extend or remove those restrictions on filing child sexual abuse cases, insurers had to recalculate. That has led to many carriers increasing the cost of taking on policies covering those cases, imposing prerequistes for getting covering – such as implementing sexual abuse trainings – and, in some cases, no longer covering them altogether, Chesler said. This is important for organizations facing lawsuits, who may otherwise be on the hook for the full cost of legal defense and settlements.


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- Insurance Recovery Attorney | Anderson Kill P.C.
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