insurance carrier tendered the $ 300,000 aggregate , satisfying its obligation under the CGL policy . The church was forced to absorb defense costs and indemnity out-of-pocket , and quickly dwindled from a church with 36 full-time staff members to nine . As of this writing , it is unclear whether the church will survive . Before crisis hit , ministry leaders should have secured sufficient coverage limits and considered purchasing additional supplemental and umbrella policies . When asked about the church ’ s insurance agent , the executive pastor said the relationship was inherited from a predecessor . In the midst of crisis , no one knew the identity of the agent or his contact information . It was later learned that this agent knew very little about sexual abuse risk or related coverage solutions .
# 3 : No notice to the insurance carrier Third , leaders indicated they were informed about the allegations early on but failed to notify criminal authorities or their insurance carrier because the reports were ‘ hearsay .’ Church leaders were unfamiliar with mandatory reporting requirements in their state and the ‘ notice ’ requirement contained in all insurance policies . The ‘ notice ’ provision generally reads something like this : In the event the insured receives information about facts that could give rise to a claim , the insured is required under this policy to notify the insurance carrier immediately , but not later than 24 hours after receipt of this information . Church leaders had received an allegation several months earlier but considered the information hearsay — an oral report from a parent about inappropriate touch described by their 7-year-old daughter . This communication should have immediately triggered a report to law enforcement , a leave of absence for the staff member for the duration of the criminal investigation ( and perhaps indefinitely ), an announcement to the congregation and communication to the church ’ s insurance carrier . Failure to notify the carrier in this circumstance can result in a ‘ reservation of rights ’ or a denial of coverage by the carrier . Either scenario places the ministry in an adversarial position with its insurance carrier . In the situation described above , the carrier weighed its options and simply tendered its limits because the aggregate ($ 300,000 ) was insignificant compared to the cost of filing a Federal Court lawsuit seeking a Declaratory Judgment against the church , asking a court to find that the church breached its duty to notify the carrier , thereby relieving the carrier of its obligations to provide indemnity or defense .
Value of the fire drill The fire drill concept can be helpful in assessing insurance availability and sufficiency . By thinking through a multi-victim allegation , a ministry can evaluate all insurance instruments for potential coverage ( CGL , D & O , E & O , Umbrella ), confirm limits , and clearly understand limitations , if any , providing an opportunity to secure appropriate coverages and limits . The ministry should include its insurance agent or broker in this evaluation . For some ministries , other creative solutions might be available . Church leaders should clearly understand state reporting requirements and when to notify the carrier , as well as what information to include . A timely and proper notification to law enforcement and a ministry ’ s carrier is far more likely to occur when staff members are trained to understand the risk of sexual abuse and the common behaviors of sexual abusers . When leaders fail to report allegations of child sexual abuse to civil or criminal authorities , children are irreparably harmed and leaders open themselves up to the possibility of criminal prosecution for failure to report . When leaders receive information related to an allegation and fail to notify their carrier , coverage and representation may be jeopardized . In this realm , training is key ; children are better protected when ministry staff members have a practical understanding of the ‘ grooming process ’ of the sexual abuser , mandatory reporting requirements and the specific requirements of each policy concerning notification of the carrier .
Prevention systems — a condition for coverage In the past two decades , the number of lawsuits , settlements and verdicts involving child sexual abuse have skyrocketed . Within the past 12 years , child sexual abuse cases provided the No . 1 reason churches ended up in the courtroom . This trend shows no sign of slowing — particularly as state legislatures expand civil statutes of limitations and pass look-back statutes , which create opportunity for abuse survivors to bring civil claims regardless of their age , or how long ago the abuse occurred . As a result , abuse allegations from decades ago become currently actionable . Insurance carriers know this better than anyone , given their obligation to defend and resolve legal matters . As a result , insurance underwriters — those responsible for evaluating a ministry ’ s risk-worthiness on behalf of the carrier — are far more careful in approving coverage or providing access to certain limits . Underwriters for major insurance carriers are now requiring that ministries demonstrate the existence of an effective child abuse prevention plan before providing coverage or approving a renewal . Ongoing legislative changes do not necessarily push a church to implement effective preventative protocols — access to insurance coverage can . In the past , as an example , the decision as to whether a church would allow a Registered Sex Offender ( RSO ) to participate in ministry services was an internal one ; now it might impact the church ’ s ability to get or maintain insurance coverage . Insurance is designed to cover certain risks . Insurance carriers are now expecting churches to raise the bar to minimize the occurrence of child sexual abuse as a condition for insurance coverage . That trend will continue .
Finding a competent agent / broker A church ’ s insurance agent / broker fills an important role in the ministry ’ s risk management effort . The agent / broker should have a strong understanding of the ministry ’ s programs , coverage needs , unique risks , and methods to reduce these risks . Too often , an agent can assist a ministry in the purchase of Property & Casualty coverage but remains ill-equipped to address the risk of sexual abuse and secure the necessary coverages and limits . A ministry ’ s “ fire drill ” should include evaluation of its insurance agent to ensure that he or she is familiar with the unique risks facing the ministry and safety system elements necessary to reduce child sexual abuse risk . Navigating child sexual abuse issues can be challenging . An effective safety system is crucial , and an appropriate insurance solution is essential . Ministry leaders must better understand the changing environment related to child sexual abuse risk . Before a crisis arises , intentionally evaluate your existing preventative protocols and insurance coverage , keeping in mind the value of appropriate coverages from the right carrier and the assistance of an informed agent / broker . Armed with an effective safety system , a competent agent / broker , and good insurance products , church leaders can better protect children and navigate child sexual abuse risk .
Kimberlee Norris & Gregory Love are partners in the Fort Worth , Texas law firm of Love & Norris and founders of MinistrySafe , providing child sexual abuse expertise to ministries worldwide . After representing victims of child sexual abuse for more than two decades , Love and Norris saw recurring , predictable patterns in predatory behavior . MinistrySafe grew out of their desire to place proactive tools into the hands of ministry professionals . Love and Norris teach the only graduate-level course on Preventing Sexual Abuse in Ministry as Visiting Faculty at Dallas Theological Seminary .
28 CHURCH EXECUTIVE • STOP CHILD SEXUAL ABUSE churchexecutive . com