Child Welfare Organizations: Are You Prepared?

Child Welfare Organizations: Are You Prepared?

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New York Child Victims Act Dramatically Extends Statute of Limitations

New York recently passed legislation extending the statue of limitations for certain abuse victims. The Child Victims Act is likely to affect the insurance world and your rates in the future. Here’s a review of the act’s main components, along with some suggestions for actions you can take to further protect the children you serve and reduce your risk.

New Act Allows Older Claims
The four major components of this complex act extend the time frame for bringing suit.

  • It extends the criminal statute of limitations for child sexual abuse offenses by five years, giving survivors until age 28 to press charges for felonies.
  • It extends the statute of limitations for civil actions arising from child sexual abuse, which currently range from one to five years at most. It allows survivors to bring suit until they reach age 55.
  • During the year following the act’s passage, claimants can file civil claims regardless of their age, even if a prior statute would have forbidden it. For example, if you are 75, you can file a claim during this one-year window.
  • The act also eliminates the notice-of-claim requirement for victims of child sex abuse – past, present and future. The 90-day notice-of-claim requirements for suits against municipalities, counties, towns and school districts also is gone.

This act doesn’t only apply to the sexual abuser. It applies to every party whose intentional or negligent acts or omissions are alleged to have resulted in the commission of sexual abuse against children.

Child Welfare Risk Management Is Changing Dramatically
This change is consistent with the trend we noted in our August 2018 blog on this topic. We have been seeing runaway jury verdicts and cases going to trial at all-time highs. We anticipate this trend will continue, and the insurance carriers have been preparing for it over the last couple of years, increasing the cost of abuse coverage and limiting levels of coverage to help offset their costs and reduce future exposure. We simply can’t compare the costs today with those we experienced from similar claims back in the 1970s, ‘80s or ‘90s.

And, while the Child Victims Act only applies to New York, we think it will have a far-reaching impact on most insurance carriers, who face potentially huge exposures. They may soon be on the hook to defend hundreds or thousands of new claims from the past, and they’ll have much higher exposures in the future. While this is all fairly new, you can bet all eyes will be watching to see whether other states follow New York’s lead; we’ve heard that many have already started the discussion.

Discuss Your Risk Exposure with Your Broker
A survey by Crystal & Company a few years ago revealed that nonprofits want their insurance advisor to be an insurance expert, have an understanding of their particular sector and company, provide risk counsel and advocacy and have influential market relationships. Now may be a good time to consider whether you are getting all that and more from your brokers.

  • How engaged are your brokers or advisors in your world? Don’t mistake this question with how likeable your brokers are or how engaged they are in your account. Do they really know what’s going on in your specific area of service around the country? Are they keeping you updated on the trends and helping you prepare throughout the year – not just at renewal time? Are they attending your state and national associations meetings, so they have a better understanding of the challenges you face?
  • How much experience do your brokers have with child welfare organizations specifically? Insuring the local food bank or church camp is much different from insuring an organization whose primary mission is related to child welfare.
  • Can your brokers demonstrate their niche-level experience to the carriers? Their background, experience and knowledge can make a significant difference when it comes to coverage and pricing.

Our Nonprofit Best Practice Snapshot, written specifically for child welfare agencies, is one tool you might want to reference.  It’s a quick glimpse of areas important to your risk management responsibilities.  As you look to the future, with additional industry-wide litigation likely, you’ll want to double down on your knowledge, your policies and your practices.

As always, The Miller Group is available for further guidance.

By Pat Murphy, President, Commercial Division

 

 

 

 

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