The California Supreme held in J.C. Penney Casualty Ins. Co. v. M.K., supra, 52 Cal.3d 1009, 1019, 278 Cal.Rptr. 64, 804 P.2d 689 that California public policy prevents insurance carriers from covering acts of sexual abuse. That policy is found in Insurance Code section 533 and must be read as if it was included in all insurance policies.

California therefore precludes liability insurance coverage for child molestation. Period.

(Insurance Code section 533 provides: “An insurer is not liable for a loss caused by the willful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured's agents or others.” The purpose of the statute is to discourage willful torts such as sexual abuse. J.C. Penney Casualty Ins. Co. v. M.K., supra, 52 Cal.3d 1009, 1021, 278 Cal.Rptr. 64, 804 P.2d 689.)

In light of this law, I do not know the justification for the payment of insurance monies to settle the clergy abuse cases unless the carriers settled because they were required to pay the costs of defense (which they may well have been required to do even if they wouldn't eventually be required to pay a monetary judgment were the case to proceed to trial).

Best,

Victoria Pynchon, Esq., a California insurance coverage (former) litigator and mediator.

The same is true for Washington State--though it is couched in slightly different language--which states that it is against public policy for insurers to underwrite criminal acts. I can understand the insurers being on the hook though, if the organization (the church or the diocese) was negligent in dealing with a known or suspected molester. The issue the church is then liable for is the negligence--not the molestation.

It would be like a hospital employing an "angel of mercy." Murder isn't and shouldn't be insurable. But a hospital has a duty to to know who they hire and give access to patients, to trust with the welfare of their patients, etc. Employing someone who later turns out to be a killer of the sick and elderly might be negligent. A person's family could sue the hospital for negligence--but not for intentional murder.

Woops, error. You can sue for murder--such as in the OJ Simpson case--you just can't get insurance to pay for judgments, settlements or defense costs.--HB

Wrongful death is not the same as murder, legally. I think that is what his civil case was about.

If the victims' families alleged negligence, e.g., negligent hiring/retention, failure to supervise, etc., then the insurers might have felt there was exposure and put in some money.

You're correct, wrongful death isn't the same as murder. But almost all insurance policies (homeowners, auto, umbrella, medical malpractice, etc.) have intentional act exclusions. Murder is an intentional act. In the OJ case, the assets being sought were personal assets, not assets from insurance policies, which would have been immune to judgment due to their intentional acts exclusions.

I agree with the counselor above that it is against public policy for an insurance company to offer insurance to underwrite criminal acts.

I'm not an attorney, but I work in the insurance defense legal field, and you would not believe the number of homeowners who expect their insurance companies to provide them with lawyers to defend them against assaults that they commit in their homes--physical and sexual.