Making The Case For Separability To Unlock Insurance Coverage
Cases involving sexual abuse can be particularly challenging and emotional for clients and attorneys. Certainly, one of the more significant issues facing attorneys in evaluating and prosecuting these cases is determining collectability and the prospect of recovery. Will the litigation journey provide any hope of monetary recovery for the victims and will the investment of time and expenses on behalf of the client be compensated? Answering these questions will often turn on the availability of insurance coverage for the defendants. In many cases involving sexual abuse, alleged abusers or enablers lack the personal resources necessary to make a client victim whole. The defendant may be a smaller company or an individual with limited means, and in many cases, the businesses or employers that once harbored the abuser, have folded. In those cases, insurance policies may be the only resource available to help make the client whole. In our experience in these non-institutional abuse cases, mediation and settlement discussions will often devolve into debates over the applicability of insurance to cover claims. The insurance companies may use aggressive strategies, including intervening in the action or bringing a declaratory relief action to disclaim coverage in an effort to heighten the risk of litigation against their insured and cut off their exposure. The purpose of this article is to examine some practical approaches and considerations when evaluating sexual-abuse cases, with an eye towards unlocking potentially available insurance coverage. A key concept for triggering coverage in these difficult cases, is the concept of “separability” – sufficiently separating the potentially covered offenses and the tortfeasors from the actual uninsurable act of sexual abuse, will afford stronger arguments for coverage against recalcitrant carriers bent on denial and low-balling of claims. The relative sophistication of the defendants and the legal or business relationships between and among multiple defendants will also influence the nature and type of potential insurance coverage available in any given case and there are many types of insurance policies that may apply to cover tortious acts arising in this difficult setting. This article is intended to help practitioners anticipate issues and prepare in advance for the inevitable coverage fight by examining their clients’ fact patterns and defendants’ insurance policies with an eye towards maximizing the pot of insurance.
“Personal injury” offenses may be covered even if the offense is not accidental
Depending on the available fact pattern of your client’s case against the abuser and others, you will want to explore certain allegations and theories that stand a better chance to trigger an insurer’s duty to defend and settle. Since we do not typically know the type or extent of insurance policies in force at the prelawsuit phase, formulating a complaint around facts and theories more likely to trigger coverage always helps to increase the odds for bringing a carrier to the table. If supported, claims for false imprisonment, slander, and invasion of the right of privacy may provide an avenue to get carrier involvement.
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