Sexual Misconduct Liability Insurance

Understanding Sexual Misconduct Liability Insurance

Sexual abuse is a tragic reality in ministry. Instances of sexual misconduct can traumatize victims and their families, and allegations can destroy the reputation of your ministry. Painfully, allegations of child abuse remain the number one reason that ministries end up in court. 

Sexual Misconduct Liability insurance pays for designated claims of bodily injury, emotional injury, and personal injury connected to sexual misconduct and related to a policyholder’s operations, including non-employment sexual harassment.

Insurance is no substitute for protection. We’ve written extensively on the need for background checks, mandated reporter training, and a child safety plan to prevent and reduce the risk of abuse. If you’re a ministry in California, make sure to watch our webinar on mandated reporter legislation and requirements for your organization.

That said, even the best procedures can not fully eliminate the possibility of abuse. Sexual Misconduct Liability Insurance is a vital aspect of any ministry risk management program. Buying the right coverage can pay for defending your ministry, and providing a path to restoration for victims.

Sexual Misconduct vs Sexual Harassment

It’s important to understand the difference between sexual harassment and sexual misconduct. Sexual harassment is typically an employment-related matter, while sexual misconduct is the result of relationships built within a ministry environment, such as abuse of a minor by a youth leader. 

Sexual Harassment

• A result of employment relationships.
• Includes employee-on-employee actions, usually between supervisory or peer adults.
• Title VII and state employment laws apply to your ministry (can vary widely state-to-state).
• Civil remedies; criminals cases are less common.
• Insurance coverage is available – ask your agent about employment practices liability coverage.

Sexual Misconduct

• A result of relationships built with a ministry environment.
• Can occur with adult to adult, adult to youth / vulnerable adults and youth to youth relationships.
• Federal, state and case law apply to your ministry.
• Criminal and civil remedies.
• Insurance coverage is available – ask your agent about sexual misconduct liability coverage.

Coverage exists for both, and it’s important to tailor your insurance program based upon your ministry’s unique risks.

Maintaining a Claim Reporting History

Having a clear claim reporting history is crucial when it comes to sexual misconduct liability insurance. Claims can come forward unpredictably, sometimes many years after the alleged incident occurred. Therefore, it’s essential to keep a record of all your policies in both physical and digital format, so if a claim comes forward, you’ll know which carrier to call and report a claim.

It’s also important to understand the type of policy you have. Occurrence-based policies provide lifetime coverage, regardless of when the claim is reported. In contrast, claims-made policies limit claim reporting to a certain time frame, which can be extended if “tail coverage” is purchased. Reviewing the terms of your past policies can help you ensure that you have the coverage you need.

If you lack prior coverage, retroactive insurance may be the best solution for your ministry. A ChurchWest agent can broker the best retroactive coverage at the best price.

What are examples of Sexual Misconduct Liability claims?

These are a few Sexual Misconduct Liability scenarios that we’ve seen ministries like yours face. While every situation is unique, these scenarios help illustrate the types of sexual misconduct risks that this coverage can protect against.

• A volunteer counselor at your camp is convicted of molesting five campers over the course of the summer. The camp did not check the counselor’s background prior to hiring him and did not discover that he had previously pleaded guilty to a charge of sexual battery of a minor. The camp is sued for bodily injury and emotional distress by the parents of all five children.
• The senior pastor of your church admits to having a sexual encounter with a parishioner. Your church board was aware of two previous affairs that ended more than five years ago but believed that the pastor had repented and reformed. The parishioner says the encounter with the pastor was not consensual and sues the church for negligent supervision and negligent retention of a pastor.
• A youth group member tells your youth pastor that she was molested by a relative on several occasions but asks the pastor not to tell anyone. The pastor believes the minor is no longer in danger and tells her to let him know if she wants him to do anything about it. Two years later, the relative is arrested in connection with the molestation. The girl’s parents discover that the youth pastor failed to comply with state child abuse reporting laws. The parents sue the youth pastor and the church for bodily injury and emotional injury. 

Sexual Harassment by Non-Employees

Sexual harassment is not limited to the conduct of your employees. Consider the following claim scenario:

• A female student at your Christian school is taunted and improperly touched on several occasions by male classmates. The girl’s parents complain to school administrators, but the improper behavior continues. The parents remove the student from the school and file an emotional distress lawsuit because of the sexual harassment.

Defending Alleged Perpetrators

This coverage pays designated legal defense expenses incurred on behalf of covered persons who deny accusations of sexual misconduct related to a policyholder’s operations. This coverage varies by carrier, and should be verified with your insurance agent to confirm the specifics of your actual policy.

NOTE: No payment of court awards, judgments, or fines is provided.

• A pastor is accused of sexual misconduct involving a child in the church. He adamantly denies ever touching the child. The parents sue the pastor for bodily injury and emotional distress allegedly sustained by the child. This coverage pays for a legal defense for the pastor unless or until he is criminally convicted, admits to anyone that the sexual act occurred, has a verdict rendered against him in a civil court, or is implicated by clear and convincing physical evidence that he engaged in the sexual act.

Next Steps

In conclusion, Sexual Misconduct Liability insurance is an essential protection for your ministry against claims of sexual misconduct and abuse. The coverage responds to a wide range of scenarios, including but not limited to allegations of child abuse.

By partnering with a knowledgeable insurance provider and maintaining proper records of past policies, you can defend your mission and provide an avenue for restoration to victims.

Worried about the cost? A ChurchWest Ministry Insurance Advisor can bundle your Sexual Misconduct Liability coverage with other ministry-specific coverages as part of a comprehensive insurance package. By bundling your coverage with ChurchWest, you can get the best protection at the most affordable price.

Click the “Get a Quote” button at the top of this screen to contact your local advisor, or explore our other coverage pages to learn more about guarding your ministry’s finances and reputation.