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INSURANCE COVERAGE: District Court rejects attempt to transform occurrence-based policy into unrestricted claims made policy pursuant to language of endorsement

INSURANCE COVERAGE: District Court Rejects Attempt To Transform Occurrence-based Policy Into Unrestricted Claims Made Policy Pursuant To Language Of Endorsement

This declaratory judgment action involved alleged sexual abuse of a minor by a camp counselor during 1987.  The policy at issue was an occurrence-based CGL policy with an effective date of March 1, 2014.  In an endorsement, the insurer stated that it would “pay those sums the insured becomes legally obligated to pay as damages…because of abuse, molestation or exploitation arising from negligent employment…of a person for whom any insured is or ever was legally responsible.”

The court rejects the insured’s claim that this endorsement modified the insurance policy to provide comprehensive and virtually timeless coverage for claims arising out of sexual abuse and molestation.  The insured argued that this language directly conflicted with other provisions of the policy limiting coverage to occurrences within the policy period.  Rejecting this claim, the court states that the natural and ordinary reading of this language is that coverage of “a person for whom any insured is or ever was legally responsible” defines who is insured, but nothing more.  Reading the contract as a whole, the court concluded that the general intent of the policy was to maintain the occurrence-based limitation.  The court therefore grants summary judgment for the insurer.

Markel Ins. Co. v. Ebner Camps, Inc., 2017 WL 3381005 (D.Conn. 8/4/17).