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Do you know what your insurance history looks like? We recommend you find out

19 June 2018

Changes in the law over the last 20 years mean that children’s services providers may include:

  • children’s homes
  • charitable institutions
  • clubs
  • sports organisations
  • schools
  • fostering agencies.

Like local authorities, these children’s services providers can now face claims in relation to alleged child sexual abuse which took place as long ago as the 1950s. Although many of the judgments which have led us to this position have taken into account public policy considerations, and in particular the ability of many defendant institutions to pay, the fact is that these cases can be very expensive and some organisations could be rendered financially unstable unless they can rely on insurance.

The Independent Inquiry into Child Sexual Abuse (IICSA) has heard evidence from the insurance industry explaining the difficulties defendants face in establishing whether public liability policies were in place, whether they respond to individual claims, and what the limits of indemnities were.

What the IICSA does not appear to have heard is that it has never been compulsory for anyone providing services to the public to have public liability insurance. Nevertheless, it has suggested that the Association of British Insurers (ABI) considers whether a register of public liability insurers could be introduced to assist claimants and their lawyers in child sexual abuse cases to locate the insurers that might relevant to their intended claim.

We have successfully defended the cases in the past on the basis that the claims are so old, defendant organisations have been unable to establish the extent, nature or wording of public liability insurance policies that may have been extant at the relevant time.

Accordingly, we can only recommend to our clients who may face claims arising out of alleged current and non-recent sexual abuse, either by their employees, or because their employees were negligent and failed to protect a child from avoidable harm, to make the time to investigate their public liability insurance policies back as far as possible. We suggest going back to the 1950s if possible. This is so that organisations are equipped both to deal with any claims, as and when the arise, and to illustrate to the court the extent to which it may no longer be possible to have a fair trial in relation to cases that are brought many decades after the events in question.

Some claims in relation to outsourced services are directed against public bodies because the organisation providing the services is no longer in existence or is otherwise unable to meet the claim, and it is no longer possible to establish whether they were insured. Insurance information has been collected in the course of procurement exercises for many years, and it is common for insurance certificates to be requested. If such information is not held for current and recent providers, it should be requested, and any historic information should be retained.

Finally – there is a crucial difference between policies that operate on a 'claims made' and 'claims occurring' basis . A defendant facing a non-recent sexual abuse claim made in a past policy year that was stated to be 'claims made' will not have cover. Once the policy is lapsed the cover has expired and is worthless. Where those gaps arise it may be possible to obtain run off cover.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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