In just two years, over 7,000 lawsuits have been filed in New York under the state's Child Victims Act. The law makes it easier for childhood abuse victims and survivors to file suit for alleged wrongdoing, including those institutions where such abuses may have happened.
Prior to the law revision in 2019, abuse victims could file suit until they turned 23. However, the Child Victims Act allowed for a temporary extension of the statute of limitations, allowing victims to file cases until they turn 55. That extension expires on August 14, 2021. The statute of limitations for filing criminal cases will then be allowed until age 28. Similar regulations exist in other states, with eleven states passing modified or extended statute of limitations reform laws in 2021. (1)
For organizations that work with the intellectually and developmentally disabled public, that means more scrutiny of past and present employees as states demand more accountability and more protections. It also means insurance carriers are expecting more, as well.
The Insurance Picture
In fact, depending on the carrier, organizations could be facing two options - either carriers offering just general liability protection without the sexual abuse and molestation coverage, or reduced coverage going forward. In a litigious environment, neither option is ideal.
However, some carriers are giving organizations another option: fulfill a number of must-have requirements in order to obtain coverage. Those requirements include the usual: background checks, training and onboarding, which has been the standard. However, now they are expecting repeat training, policy development/updates and new background screening requirements.
Fortunately, carriers often have the resources in place for organizations to improve their protections and achieve better compliance. Those resources can also provide an organization with the information and documentation needed for defense of claims.
What Carriers Want
However, organizations should be acting now, well ahead of any renewal, to appeal to carriers. That means knowing what they will be looking for.
Sexual Abuse and Molestation Policies
Your carrier will want to review your existing policies outlining what your organization is doing to prevent sexual abuse and molestation. How old is the policy, and does it contain the types of events often listed in litigation? Have issues from any prior litigation been addressed, and if so, have they been handled appropriately?
Training
Are your employees trained in how to recognize inappropriate behavior or actions in fellow employees? Carriers will respond best to those organizations that have trained their entire staff on how to detect grooming, abusive behavior or inappropriate handling. Carriers are also looking at how frequently training is conducted, and what the organization plans to do in the future with regard to training. How will that plan evolve as the threat actors change their methods?
Reporting Process
Is there a reporting mechanism that employees are comfortable using? All employees should understand that even a suspicion that something is not right should be reported.
Ongoing Background Checks
The most important requirement for many carriers is background checks - not just the pre-employment background checks, but an ongoing background check process that includes all employees. Carriers are often asking for a screening every three years to ensure that there are no off-duty concerns with employees that could be putting clients at risk.
Accessing Resources
Because we have good relationships with our carriers, NFP can help connect your organization with the risk management resources available. Plus, we can help your organization understand what the carrier's expectations are, what resources they have available and how to improve your client safety program. As more states implement more victim-friendly legislation, organizations could be facing unexpected legal action. Take the opportunity to prepare your organization now, and prevent abuse in your organization. Work with your carrier or broker to understand your risks, bolster your safety processes and ensure the best outcomes for those under your charge.
Sources
This information is presented from an insurance and risk management perspective only. It does not present an opinion by NFP on any other subject matter and is not intended to give business or legal advice. Consult your attorney and other professionals to ensure legal compliance and evaluate business implications