Minn. Diocese Says Insurers Must Cover Sexual Abuse Cases

By Kat Sieniuc
Law 360

Law360, New York (December 5, 2016, 4:40 PM EST) — The Diocese of Duluth asked a Minnesota bankruptcy court on Friday to find Liberty Mutual Group and a slew of other insurers liable as it defends a number of sexual abuse claims against local clergy, saying such allegations are covered under its insurance policies.

The diocese, which filed for Chapter 11 bankruptcy last December, said the insurers have so far shirked their legal obligations to cover the cost of multiple underlying suits claiming the Minnesota district is liable for damages stemming from alleged negligence related to accusations of sexual abuse within the church.

The various multiyear insurance policies the diocese has with Liberty and the other insurers — Catholic Mutual Relief Society of America, Fireman’s Fund Insurance Co., Church Mutual Insurance Co. and The Continental Insurance Co. — require the companies to pay out on “all sums that the diocese becomes legally obligated to pay as a result of bodily injury, as long as any part of the injury took place during the policy period,” the plaintiff said.

The insurers are also liable, under the various policies, for all defense costs and expenses, including attorneys’ fees, that have built up over the course of the investigation and litigation of the underlying suits, the diocese said in its complaint.

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