Abuse and Molestation Coverage: What Schools Need to Know

For schools, protecting students is the highest priority, and managing the risks associated with potential abuse and molestation is a serious aspect of that responsibility. However, the landscape for this type of coverage is undergoing significant change, and it’s important for school leaders to understand the details.

The Changing Legal Landscape: Statute of Limitations

One of the most impactful developments in recent years has been the reform of statutes of limitations in various states. Traditionally, there were time limits within which a victim could bring a lawsuit after an incident occurred. In Maryland, for example, the Child Victims Act of 2023 eliminated the statute of limitations for child sexual abuse claims. This means victims can now pursue civil lawsuits regardless of how long ago abuse occurred. This creates a situation where schools could face allegations stemming from decades past.

Many schools maintained records based on older statute of limitations guidelines. Finding documentation, or even identifying who was the insurance provider, for incidents from the 1970s, 80s, or 90s can be very difficult. Sometimes, the insurance company from that era may no longer exist or has merged multiple times. This often leads to complex legal and insurance research, sometimes referred to as “insurance archaeology,” to determine if coverage existed at the time of an alleged incident.

Given these legal changes, a practical approach for schools is to maintain meticulous records indefinitely. While it might seem daunting, digital record-keeping systems make this more manageable than in the past.

Understanding Your Policy: Occurrence vs. Claims-Made

When it comes to abuse and molestation coverage, understanding the structure of your insurance policy is vital. Policies generally fall into one of two categories:

• Occurrence-Based Policies: An occurrence policy covers incidents that happen during the policy period, regardless of when the claim is filed. So, if an incident occurred while an occurrence policy was active, coverage would respond even if the claim is filed many years later, long after that specific policy period has ended. This offers broader, long-term protection, which is very helpful given the delayed nature of many abuse claims.
• Claims-Made Policies: A claims-made policy covers claims that are filed during the policy period, provided the incident occurred on or after a specified “retroactive date.” If you switch from a claims-made policy to another company’s claims-made policy, or if your policy lapses, you could lose coverage for incidents that happened during the previous policy period but were not reported until later.

The marketplace for abuse and molestation coverage is increasingly moving towards claims-made forms. Because there’s less ability to predict when past incidents might lead to current lawsuits, insurance providers are seeking more control over their financial responsibility. This trend means schools need a clear understanding of claims-made policies and how they function to ensure continuous protection.

Steps for Schools to Consider

Navigating abuse and molestation coverage requires a proactive and informed approach. Review your current policy, put prevention programs in place, maintain detailed records and keep them on file, and communicate with your broker.

While discussing abuse and molestation is difficult, confronting the realities of these risks and ensuring your school has appropriate coverage is a critical aspect of protecting your students and your institution.

Read this article on recognizing and responding to child abuse next, or watch this video with Kyle Butler about the topic.