Byrne-Kim Associates Insurance Services
Sexual Abuse Molestation Insurance Coverage
Sexual Abuse and Molestation Coverage:
ABUSE & MOLESTATION COVERAGE – A SAFETY NET THAT YOU CANNOT AFFORD
TO BE WITHOUT!

As a patient care provider, be it a Hospital, Nursing Home, Home Care, and so on, you have become an
expert in foreseeing, avoiding and preventing those situations that might bring harm to your patient clients.
Likewise, your insurance agent and company should have a strong enough understanding of the health care
industry so as to protect you from both the inevitable and unusual claims.

When purchasing this coverage, Don’t assume that the terms and conditions of one company’s policy are
the same as that of another company. There are significant differences in the amounts and types of
insurance coverages available from one company to another. Take the time to examine your insurance
protection and obtain at least a rudimentary knowledge of what types of claims are, and are not, covered. By
having the right coverages and appropriate limits of coverage you may save yourself a lot of grief and money
later.

One of the most important and misunderstood insurance coverages that you can purchase is for claims of
physical abuse and sexual molestation. Operating your business without this coverage is comparable to a
tight rope walker that doesn’t use a net. Maybe and hopefully there will never be a loss, but if there is it will be
probably be significant, both in terms of time and money.  Everybody who cares for a patient, be it either in
their own home, a nursing home, hospital and medical facility should have abuse and molestation coverage.

When purchasing and making decisions about abuse and molestation coverage, you should consider the
following:

  • Do you even have coverage for Abuse & Molestation? Most of the insurance packages exclude abuse
    & molestation. Numerous companies that insure health care operations usually exclude abuse and
    molestation coverage. Some companies will and it on as an endorsement, and some companies
    may include it as a package (very few do, and you usually need an abuse and molestation policy and
    procedure in force for this coverage to be provided). (Ask your agent for a sample if you do not have
    one).  Before you go any further look through your policy and ask your agent If there is coverage,
    he/she should be able to tell you the limit of coverage and provide you with a copy of the specific form.
    If there is coverage, this form should clearly explain the terms and limit of coverage. If you don’t
    understand, ask for clarification.

  • Is there a bodily injury deductible or self-insured retention (SIR)? This requires the policyholder to
    share in the payments with either a predetermined amount or a percentage of any payments or
    settlements. In today’s competitive marketplace the money saved in premiums generally doesn’t
    exceed the amount of the deductible or SIR. Avoid deductibles and SIRs.

  • What is the maximum dollar limit that is available for paying abuse and molestation claims? These
    limits vary significantly from company to company. A few provide coverage up to the liability limits,
    which may be as high as one million dollars per occurrence (claim) and up to three million dollars for
    all claims in a policy period. Usually most companies offer a sub limit (see below) of $100,000 per
    occurrence and $300,000 limits total, they may even have higher limits available via an Umbrella
    policy. Check to see if the Umbrella covers abuse & molestation.

  • Is there a sub limit for abuse & molestation claims? Some insurers are not willing to “risk” the full
    liability limits on the chance of an abuse or molestation claim. They only provide a sub limit of
    coverage from that of the general liability limits. In other words, the limit of coverage for abuse claims
    may be lower than the limit for other types of claims, as explained above.

  • Is the cost of defense (investigations, legal bills. etc) within the limits of liability? (This one is very
    important and many times overlooked even by the agent). Often, the majority of payments will be for
    defense costs, rather than the cost of settlement. Some companies have the defense costs “within
    the limits” of liability, rather than unlimited. For example, a policy with $1,000,000 liability limits and
    defense within the limits would only pay a maximum of $1,000,000 for loss and defense costs. Look
    for coverage where the defense costs are not within the liability limits.

  • Who is insured by the policy? In your policy it states who is an insured. Sometimes this is defined
    differently with regard to abuse & molestation coverage. Does your policy include volunteers/third
    parties as an insured?

  • Who is excluded from abuse & molestation coverage? Some companies that do provide even the
    broadest of coverage still exclude coverage for the actual molester. As an intentional act, rather than
    an accident, the perpetrator is not covered. In many cases often the facts are disputed and unclear.
    Try to find a company that will defend any insured who is accused until the investigation determines
    that the accusation is correct. If a company is not sure if an accused person is guilty they should
    send a letter explaining that they are reserving their rights to deny coverage for the accused if the
    facts determine that the accused is guilty of intentionally causing the abuse or molestation. The
    insurance protection may be denied to the abuser but still be provided to other insureds. For
    example, if an employee abused a patient/client the insurance company could deny coverage for that
    employee but still provide protection for the owner’s improper supervision or hiring.
As noted above, take the time to establish a concise written policy and procedure statement regarding abuse and molestation.  Make sure once you have
one written that it is enforced and that all employees, volunteers, family members and anyone who has contact with a patient/client are aware and
understand your policies. It is also a good idea to have them sign off after reading and becoming aware.
Finally, never attempt to try and handle any claims of abuse and molestation on your own, as this is a very serious matter, report all reports to the proper
authorities and notify your agent or carrier right away, and always record any correspondence or witness statements in writing.

Sample Abuse and Molestation policies are available for our clients.
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