Can the Catholic Church buy insurance for sexual abuse?

Answers to your questions about the news.
July 16 2007 6:43 PM

Insurance for Sex Abuse

A policy tailor-made for the Catholic Church.

Los Angeles Cardinal Roger Mahoney. Click image to expand.
Cardinal Roger Mahony

Over the weekend the Archdiocese of Los Angeles agreed to pay $660 million to settle lawsuits from hundreds of sex-abuse victims. About $250 million will come out of the diocese bank account; $60 million will come from other religious orders and another $123 million from litigation with orders that chose to sit out the deal. Insurance companies will pay the remaining $227 million. Hold on—can churches buy insurance for sex abuse?

Yes. Like any business, churches, synagogues, and other religious organizations purchase insurance to protect themselves from lawsuits, like discrimination claims or negligence charges against officers. Since the spike in sex-abuse lawsuits in the mid-1980s, churches have also had the option to take out extra liability policies for damages related to sexual misconduct. These policies don't come cheap, and they protect just the institutions, for the most part. Insurers will mount a legal defense for accused individuals, but the support extends only so far: Perpetrators are on their own if they're found guilty or choose to settle out of court.

Advertisement

But insurance companies created these abuse-specific policies only after the lawsuits of the mid-80s forced them to make large payouts. Until then, general liability policies didn't specifically rule out sex abuse, so churches that needed to pay damages argued that insurers should pay. Thus, even though sex-abuse insurance is available today, many of the big payouts actually come from the churches' general policies, since the abuse happened decades ago. (The Los Angeles settlement probably came out of these general policies.)

According to GuideOne, a major insurer for Protestant churches, most of its clients choose $100,000 of coverage for sex abuse. That might cost a small church with one pastor as little as $100 a year. A much larger church that also runs, say, a day-care center, might pay $6,000 to have $1 million in coverage. Religious organizations buying a lot of coverage may need to prove that they're taking precautions to lower the risk of sex abuse. GuideOne, for instance, requires some churches to conduct criminal background checks on employees, to allow volunteers to work with kids only after they've completed six months of service with the church, and to make sure that no child is ever left alone with just one adult. The policy won't cover everything. Insurers may put a limit on how much they will pay in aggregate, or for each case. (Recently, three major Protestant insurers reported that they receive 260 reports of child abuse every year.)

Partly because of rising insurance costs, a small number of churches are foregoing the coverage. More than half of Catholic dioceses buy their insurance from Catholic Mutual, which operates a self-insurance fund for the Catholic Church in North America. No matter who forks over the money for damages, awards today are so large that some dioceses are facing bankruptcy.

Got a question about today's news? Ask the Explainer.

Explainer thanks Tom Farr and Eric Spacek of GuideOne, Terry McKiernan of Bishop-Accountability.org, and Rand Wonio of Lane & Waterman.

Michelle Tsai is a Beijing-based writer working on a book about Chinatowns on six continents. She blogs at ChinatownStories.com.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
  Business
Moneybox
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
  Life
Outward
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
  Technology
Technocracy
Oct. 20 2014 11:36 PM Forget Oculus Rift This $25 cardboard box turns your phone into an incredibly fun virtual-reality experience.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.