In 1987, the Insurance Service Office (ISO) promulgated an “Abuse or Molestation Exclusion,” with the apparent intent to deny all coverage for abuse or molestation incidents.[2] The exclusion covers “the actual or threatened abuse or molestation by anyone of any person while in the care, custody or control of any insured.”
One commentator, the International Risk Management Institute, interpreted the exclusion broadly so as to “eliminate[] coverage for an insured organization’s liability in connection with abuse or molestation committed by someone other than the insured.”[3] “Someone other than the insured” can encompass an insured’s employees, independent contractors, agents, and customers, as well as others completely unconnected with the insured, thereby giving the exclusion broad and expansive effect.[4]
How courts construe the abuse or molestation exclusion—and its limiting phrase “care, custody or control,” in particular—is an important issue for insureds to track, especially schools, camps, churches, hotels, and other organizations that host minors or guests (potential targets for abuse or molestation). The number of sexual molestation lawsuits has increased in recent decades, and it includes high-profile molestation lawsuits brought against the Roman Catholic Church.[5] Insureds, in turn, look to their liability insurers for a defense and indemnity.[6] But insurers frequently deny coverage, as many coverage attorneys can attest.[7]
This article examines the limited body of case law interpreting “care, custody or control” to understand the abuse or molestation exclusion’s scope. To date, courts have been inclined to hold that “care, custody or control” is unambiguous and have construed the phrase expansively, in an insurer-friendly manner. In construing this phrase, courts primarily have considered where the abuse or molestation took place and when the abuse or molestation occurred.