Thursday, August 2, 2007

More on Catholic Rape Insurance Scandal!

An LJ friend said that perhaps the insurance that covered the child rape might be an horrible mistake on the insurer's part. That the Catholic Church had a general liability policy that just happened to cover children being raped by priests, too, though unintentionally.

I didn't think so, because the way that I understood it, after a certain time period elapsed the insurer could cancel coverage -- insurance companies generally leave the option over to drop coverage. But I thought it was a good question. Does the Catholic Church have liability insurance to specifically cover sexual abuse?

Well, amusing things first. When you google "catholic church and rape liability" my own article is what comes up. Yay, me, I guess. But you find some other stuff, too, such as this Slate article. Allow me to quote:

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.

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.)

So, according to Slate, we were both right. Initially, sex abuse of this nature was paid for out of general liability policies, but nowadays people can get sex abuse policies. Churches do get them. The Slate article has some specifics, even -- say, $100 a year for a small church with a single pastor, or $6,000 a year for a big church with a day care center. The average liability covered is $100,000.

It also mentions that the Catholic Church has it's own insurance company, Catholic Mutual, and half of the Catholic churches in America get their insurance through this system. Take that as you will.

The article ends up mentioning that many of the archdioceses that face these settlements are, nevertheless, facing bankruptcy due to the large payouts. Take that, too, as you will, but for me it feels very insufficient given the extreme and systematic nature of the crimes, but I believe in both corporate death penalties (the government seizing corporate assets if the corporation obviously and systematically is corrupt, as determined by a court of law) and I believe in treating religious organizations no differently than secular ones.

Post-script: Here's another article about the Catholic church's rape and insurance scandal, and a hat tip to Symboid for bringing it to my attention. One of the things it does is point out that Catholicism is hardly alone in the sex abuse cover-ups, but let's have a quote:

These types of policies started coming into existence after the court case Hanover Insurance Co. vs. Crocker in the 1980s. In the case, Mrs. Crocker's husband was accused of the sexual abuse of a child. She was aware of the abuse but neglected to report it to the authorities. She was charged with neglect, but her lawyer found a loophole in her homeowner's insurance policy that the court ruled to be an indication that the insurance company was responsible for covering her monetary settlement.

So now we have sexual abuse insurance coverage? These types of insurance policies are like a slap in the face to the victims. I understand that they are a smart move for businesses to take advantage of in case an employee gets into that kind of unforgivable trouble, but the mere fact that they exist holds to the idea that these types of offenses can be settled by the stroke of an insurance executive's pen on a checkbook.

I agree it's a slap in the face to the victims.

1 comment:

jmb said...

Thanks for the clarification. I found the two articles very interesting in an horrific way.

So it seems we are all paying for this in increased insurance rates on our policies, home and otherwise, because those insurance companies have to make money for their shareholders after all.