In the heart-breaking matter of Sexual Abuse Claims, KCIC offers insurance recovery, claims management and litigation management to organizations facing those claims.  While financial compensation can never right the wrong suffered by victims, it is an important part of the solution.  Insurance is often one of the most valuable assets a defendant has available to compensate victims. KCIC is uniquely placed to sensitively assist defendant organizations in managing claims and in identifying and monetizing insurance assets to fund settlements.

The involvement of state legislatures and the temporary tolling of statutes of limitation have profoundly changed the landscape for these unique claims as educational, religious and youth organizations unexpectedly face claims going back decades. As for any long-tailed tort, Sexual Abuse Claims are complicated with many parties having an interest in the data.  There are also a host of coverage issues affecting the availability of insurance, from finding and noticing coverage, to triggering coverage, and allocations.

While the revision of statutes of limitation is better for the victims, policyholders must both manage their risk going forward while also maximizing the insurance assets available for victims.  There are steps a policyholder can take to better prepare to navigate the continuing uncertainty. 

1. Find your coverage. Perhaps it’s been a while since you looked at the state of your coverage or maybe you have no idea if you have coverage, but figure it out. Find and organize the documents, preserve the documents electronically, track the key provisions in a database and retain coverage counsel with relevant experience.  Insurance archaeology may be needed to find missing coverage.  See Nick Sochurek’s recent blogs for more detailed suggestions. KCIC designed the Ligado policy database exactly for these types of complex coverage problems so we can help with this step.

2. Track claims electronically using a sound data-structure and consistent rules of data entry. The reporting windows adopted by many statues are creating an influx of claims at a higher volume than defendants have previously seen.  Existing claims management systems and processes may not be equipped to handle the increased volume.  Track basic claimant information, co-defendants named and allegation details such as state, alleged perpetrator, nature and dates of abuse.  Evaluating current and future risk requires good data even with the highly confidential nature of these claims.

3. Notice your insurance carriers per policy requirements and manage their responses. This may sound straightforward, but with decades of coverage at issue, there may be hundreds of policies and just as many claimants, so it is not a simple task.  Add that to the consolidation and insolvency of insurance carriers over the years and you are talking about a huge task that needs a technology-based solution.

4. Read and track all prior insurance settlement agreements. Make note of the specifics of the scope of release.  Was it for a specific claimant or related organization? Was it a broad release for both known and unknown future claimants?  Was it for specific policies?  Did it establish rules for applying coverage going forward such as trigger, occurrence definition or treatment of aggregate limits? Linking the settlement analysis to your policy and claimant databases makes it easier to incorporate these historic agreements into coverage decisions going forward.

5. Manage the expense of defending claims and any services provided to the victims using a comprehensive electronic system which maintains detail at the transaction level and links it to the related claim. Coverage disputes often move more slowly than underlying claims, especially as the changing statutes open insurers’ policies up to risks previously thought to be completed.  Insurance companies are already defending claims more vigorously than ever.  These days, an insurance recovery will require a detailed review of all money spent since settlements, legal fees and other forms of victim compensation have different coverage demands.  It is much easier to track these cases at the time you spend the money rather than go back and recreate the level of detail required.  

6. Related to the above, maintain electronic payment records between all parties. Detailed payment records are critical to recovering costs in the future. Payments made pursuant to any cost sharing agreement between co-defendants or between policyholder and insurers should be tracked and documented.  Cost-sharing agreements can change as underlying claims are litigated. It is much more time-consuming and expensive to sort out who paid what to whom years later.

All the above steps are related to each other in complex ways requiring detailed data points and voluminous back-up documents.  Today’s technologies can help maintain the connections to reduce the uncertainties facing a policyholder involved in sexual abuse litigation, helping them make better decisions.

I recently spoke on these issues at the Coverage and Litigation Issues Surrounding Sexual Harassment, Assault and Abuse Claims, Perrin Conference. There were a lot of great discussions regarding these types of claims and the litigation involved.  We anticipate future conferences surrounding these topics so please check back soon.