This article was originally published in February 2018.
One of the best things about being an insurance broker has been the chance to learn about so many different professions and activities outside broking as part of my work as a broker. I have learned about banking, numerous professional services and more about cyber risk than I ever expected to learn.
One of my most interesting experiences has been to spend time learning about the Church and its relationship with sexual abuse risk management. ‘Interesting’ is a relative term here because it was a fascinating but far from pleasant experience. The overriding impression I felt was terrible sadness at the awful damage done to so many victims.
And while the Catholic Church was the first to become aware of its sexual abuse crisis, and almost every other denomination has since followed them, daily revelations now attest that religious institutions were just that; only the first to realize they had a problem. Education, sports, charities and the media are the current highest profile sectors being hit by revelations of their institutional failure to recognize or deal with sexual abuse but they are unlikely to remain alone. Any sector where people (almost always though not exclusively men) can abuse their power with sexual intent – can expect to emerge as having had similar problems they failed to address.
To the extent there is any up-side to this story it is that the Catholic Church is now an admirable example (mostly) of how sexual abuse can be managed. It is fair to say that it wasn’t before time. Many within and outside the Church spent many frustrated and even angry years trying to understand why the Church initially reacted the way it did. It is also fair to say that, even now, as with any form of risk management, there is huge variability in terms of the results achieved because different approaches are taken by different people in different contexts.
But, where the Catholic Church now leads, others have followed. Today, there seems to be a range of sophistication in sexual abuse risk management across sectors that broadly tracks the length of time that has passed since each sector first learned of their problem.
The opportunity presented by this timeline – and the reason to be hopeful – is that, where it took the Catholic Church maybe 40 years to sort out its sexual abuse risk management, it needn’t take other sectors newly discovering their problems anything like as long to catch up. So long, of course, as those who know about abuse risk management share information with those still to learn.
We in insurance have a role to play in this process. For example, with the common objectives of reducing abuse and the damage caused by the abuse that cannot be prevented:
We can identify basic, and share emerging, best practices in our underwriting processes;
We can deliver products that match the exposure appropriately – for example, in the way we help insureds deal sensitively with both alleged victims and perpetrators – at least while the facts are established; and
We can handle claims in such a way as they support the broadest objectives of helping to heal those damaged by abuse while at the same time letting people who spend their lives helping others in need do so effectively.
Much of what made many people sad and angry is evident reading this article about the latest in the argument between the Diocese of London, Ontario and AXA (Intact). There is the aching sadness of the lost trust of so many victims. Also, the palpable anger at the apparently willful collaboration between a Diocese and a perpetrator. This apparent collaboration – there was of course no such thing – was the result of a complete failure by this (and all other) Dioceses to understand the true nature of pedophilia or ephebophilia when they first encountered them.
The article is also interesting for other reasons though.
The action it describes is yet another attempt to establish a direct connection between an individual Diocese and Rome, via Crimen Sollicitationis. All previous efforts seem to have failed so far but most of those efforts have been plaintiff led; it will be interesting to see if an insurer achieves a different result.
The fact that neither insurer nor insured can actually find the policy they are arguing about may seem laughable but we are talking about occurrence policies issued 70 years ago. While for me this is yet another argument in favour of claims made over occurrence policies for sexual abuse risk, it is the Diocese’s reliance on ‘assault and battery’ language that best illustrates why sexual abuse liability coverage needs its own specifically tailored policy language.
Many perpetrators abused (and still abuse) multiple victims. The insurance challenge posed here is that each victim that comes forward does so when they are ready to do so, noting that there is compelling evidence that many victims never come forward at all and not all who come forward are victims. So, the multiple victims of the same perpetrator can come forward many years apart though, in recent years, social media has played a role in both encouraging victims to come forward and in foreshortening how long they take to be ready to do so. The key here is whether insurance, that has otherwise been designed to meet the real characteristics of sexual abuse liability, is issued on either a ‘per victim’ or a ‘per perpetrator’ basis. The difference between the two approaches can have a material impact on the policies involved, the coverage available, and to how limits and retentions work.
This issue of when different victims of the same perpetrator come forward is also linked to the whole issue of knowledge. Are the unknown victims of known perpetrators known in policy language terms? What is knowledge? Should what I can, should, or do know today be tested against the same criteria as what I could, should or did know 10 – never mind 70 – years ago? What kind of knowledge triggers a policy? Claims made policies can be triggered by a range of possibilities from suspicion that abuse might have taken place to the receipt of a law suit. Bearing in mind the common objectives of reducing abuse and the damage caused by the abuse that can’t be prevented, a policy construction that accommodates something akin to probable cause is, in our opinion, essential, as opposed to one that focuses only on law suits.
Sexual abuse and its insurance are difficult subjects. No one likes talking about sexual abuse and few engage with abuse risk management unless they absolutely have to. But, if the sadness and anger around abuse in all the sectors now discovering their own abuse problems are to be replaced by the hope that abuse and its damage can effectively be reduced through risk management, insurance must step up and play its part.