Navigating the Rise in Sexual Abuse Claims

Sexual abuse and molestation claims have skyrocketed in recent years, creating significant financial and reputational risks for organizations across various sectors. The numbers are staggering – $651 million in settlements in 2023 alone, with each settlement exceeding $1 million. What's driving this dramatic increase, and how can organizations protect themselves?

Michelle Levine, SVP with CRC San Francisco, pulls back the curtain on this critical issue. The traditional assumption that general liability policies provide adequate coverage no longer holds true. Insurance carriers have responded to increasing litigation by cutting limits, non-renewing policies, or explicitly excluding sexual abuse coverage. This shifting landscape necessitates specialized solutions and a stronger risk management approach. While schools and religious institutions represent approximately 70% of claims, the exposure extends to any organization with third-party contact – from wellness centers to gyms to service providers of all kinds. The most effective protection combines comprehensive insurance coverage with proactive risk management – proper hiring practices, consistent training, and creating a culture where concerns can be raised and addressed immediately.

Don't wait for a claim to discover your organization's vulnerability. Reach out to your CRC specialty broker today to ensure you have the coverage and risk management tools needed to protect your mission, your finances, and most importantly, the people you serve.

Visit REDYIndex.com for critical pricing analysis and a snapshot of the marketplace.

Do you want to take your career to the next level? Join #TeamCRC to get access to best-in-class tools, data, exclusive programs, and more! Send your resume to [e-mail] today!

Episode Transcript

Amanda Knight (00:23):
Welcome back to the Placing you First podcast.
I'm Amanda Knight, joined byScott Gordon, and today we're
discussing a criticallyimportant and sobering topic the
rise in sexual abuse andmolestation claims and what that
can mean for schools,nonprofits, wellness
organizations and beyond.

Scott Gordon (00:40):
Yeah, that's right , and our guest today is
Michelle Levine, senior VP atCRC Group's San Francisco office
and a specialist in finding theright coverage for complex,
high-risk accounts.

Amanda Knight (00:52):
This is the Placing you First podcast from
CRC Group.
This podcast features news andinsights from a vast knowledge
base of more than 5,500associates who write more than
$30 billion in premium annually.
Plus, we give you the latestinformation on what's happening
at CRC.

Scott Gordon (01:08):
This this this is the Placing you First podcast.

Amanda Knight (01:12):
And now the hosts of the podcast, Amanda Knight
and Scott Gordon.

Scott Gordon (01:16):
Michelle, thank you for joining us today.

Michelle Levine (01:19):
Thank you both so much for having me.

Amanda Knight (01:21):
Michelle.
You worked with me on thewritten article that corresponds
with this podcast topic, andsome of the statistics that we
reviewed when we were puttingthat together were pretty
eye-opening.
For example, just in 2023 alone, there was $651 million in
sexual abuse and molestationclaim settlements.

(01:43):
Why are we seeing such a sharpincrease?
And if I'm remembering right,those settlements were all over
a million dollars, so why are weseeing such a sharp increase in
both frequency and severity ofthese?

Michelle Levine (01:59):
claims.
That is an excellent question,amanda, and to address that, we
need to go back a little littlebit, and this is not something
that we were seeing or eventalking about 10 years ago, and
it's getting so much moreairtime as these situations are
being reported more and more,and this is very closely

(02:19):
correlated with the me toomovement in 2017, with Weinstein
and also the Larry Nassar casedrew a lot of attention to this
as well, and we weren't seeingclaims previously and therefore
we weren't seeing thesesettlements because it wasn't
being reported as the survivorsand victims didn't generally
feel like it was an environmentthat was hospitable or conducive

(02:41):
or really a safe space in whichthey could come forward, and
that's been one of the largestdifferences that more survivors
are coming forward, and there'sbeen so much media attention and
a lot of these things thatthere are also more sympathetic
juries and all of this, which isdriving a lot of that.
And it's also important toremember that it's not just

(03:02):
these high profile cases that wethink of.
There are claims that areaffecting the balance sheets of
smaller companies all the time,and any company with a third
party exposure should really beconsidering purchasing this
coverage.
And one last aspect of thatthat's contributing to it is
they have changed thelegislation and have expanded

(03:23):
the timeline retroactively sothat it's allowing more people
to come forward, which is againcontributing to both the
frequency and severity thatwe're seeing represented in
those statistics you mentioned.

Scott Gordon (03:34):
Now, historically, many clients assume general
liability would be enough, butwhy is this no longer the case?

Amanda Knight (03:43):
Is it just the fact that there are more claims
and they cost more?
These are excellent questions.

Michelle Levine (03:48):
Excellent points.
It's a myriad of factors againon this, and GL policies do tend
to have insufficient sublimitsor outright exclusions at this
point and there used to beexplicit coverage or they were
silent, and that's not to saythat they aren't silent and they
aren't still covering some ofthis.
But with the increase inlitigation and also the

(04:12):
reputational damage that's beingdone with a lot of these cases,
it's requiring a stronger riskstrategy and that's where many
companies come in that canprovide services like this and
help with the training and themanagement when a situation like
this arises.
And this is still an evolvingcoverage, as we discussed, you

(04:33):
know, even 10 years ago thiswasn't nearly as relevant as it
is today and because of thatthere's a considerable exposure
for many classes of industry.
And then with that, in the lastfew years, the GL carriers have
been also cutting limits,non-renewing altogether or
carving out coverage, which isreally where a wholesale partner

(04:56):
can help, providing astandalone option as a solution
to that.

Amanda Knight (05:00):
So if I'm a retail agent and I'm thinking
about my list of clients who ismost at risk when it comes to
these kinds of exposures andclaims?
I know we often think ofschools, but this really, I mean
it seems to extend far beyondthat right.
What other industries, whatother areas do we tend to see

(05:22):
some of these claims come out of?

Michelle Levine (05:24):
So the categories that you mentioned
are really the most frequent andtend to be the most severe with
schools, religious institutionsit's something close to 70% of
claims are as a result of thatum and but.
That said, it isn't just thoseentities, it's really anybody

(05:47):
who has a third party exposure,and with that I would say that
it can be gyms, it can bemassage places, it can be really
anywhere, and because of that,I would say that it's really
important to encourage clientsto feel comfortable talking
about this, because it feels alittle uncomfortable to talk

(06:09):
about, right?
So it's something that the morewe're talking about this, we
can actually really help withthe risk management as well,
because a lot of this can beprevented with proper hiring and
with cultivating an environmentwhere people are able to come
forward, because a lot of thiscan be resolved much faster and
with a much better outcome forall parties if it's addressed

(06:33):
immediately and taken seriously.

Scott Gordon (06:34):
And now, with that growing scope in mind and the
difficulty, of you know,discussing it, how should retail
agents approach this topic withtheir clients?

Michelle Levine (06:43):
They should approach this from a risk
management perspective, and thebest advice that we can give
them is to take the warning signseriously and respond as
quickly as possible and enlistthe help of experts as well,
because you're paying for aservice and you need that
service, which is going to helpwith the media perception and

(07:04):
also with managing this process,is going to help with the media
perception and also withmanaging this process, and I
would say that be selling thisto all of your clients, because
it is a very costly, a verycostly outcome, and you want to
be able to avoid that so thatyour business can keep doing the
good work that you're intendingfor it too.

Amanda Knight (07:23):
So let's talk statutes then.
Are there changes?
I mean, you've mentioned thatthis is evolving.
This is something that wedidn't see a little over a
decade ago.
So what changes are happeningthat agents should be aware of?
I know there have been somerecent changes, maybe out in
California, maybe some otherstates.
Can you give us kind of a quickprimer on what's happening

(07:46):
right now as far as changesaround these kind of claims?

Michelle Levine (07:50):
To address your first comment, the California
AB 2777 law was a law that wassigned into effect by California
Governor Newsom in September of2022.
And it's more commonly known asthe Sexual Abuse and Cover-Up
Accountability Act, and that lawessentially extends the statute

(08:14):
of limitations on crimesassociated with rape, sexual
abuse, sexual harassment orassociated violence with those
which occurred on or afterJanuary 1st 2009.
So what that law also did is itprovided an additional
provision, which is something wereferenced earlier, that

(08:35):
creates a one-year revivalwindow and that allows a victim
or plaintiff to bring a claimagainst individuals and or
entities for the associatedsexual crimes, which is involved
in a type of special type ofcover up, and so with that it
just it expanded it so much thatso many claims have been

(08:57):
forthcoming, and California cantend to be a pioneer of these
sorts of things.
So other states are doingrespective things, and that's
why it's important to be lookingat the local.
You know statutes andlimitations on each state.

Scott Gordon (09:11):
So, before we wrap up here, though, what's your
general advice to, say, brokersand agents who are handling
sexual abuse and molestationexposures today?

Michelle Levine (09:21):
Buy more insurance?
That really it sounds so simple.
Buy more insurance?
That really it sounds so simple, but it really they yeah, just
buy insurance so that you'readequately covered for this,
because you're not just buyingthe defense and indemnification
part of it, you're reallypurchasing it for these services
which can help in the trainingto mitigate these circumstances

(09:44):
from even occurring to beginwith, which is the most ideal
for everyone.
So that is really why we justsay address that and have honest
conversations so that you havethat open communication and
you're able to help with it.

Amanda Knight (09:57):
If you read the article that goes with the
podcast, if you kind of dive inthis is all over the internet,
right it seems like every timeyou turn around there's another
big claim, you know aheartbreaking claim, and that a
lot of that could maybe beprevented if we do our best to
pay attention and take the rightrisk management steps.

(10:17):
And insurance is absolutelypart of any strong, robust risk
management plan.
So thanks for sharing that withus, michelle.
Of course, yeah.

Michelle Levine (10:27):
And one more point is, along with insurance
obviously, being a strategicpart of that hiring and not
having negligent hiring andconsistent training.
It's not just that people aregoing through the perfunctory
protocols, it's that they'reactually committed to it and

(10:47):
it's that commitment when we seethat from companies and they
carry that in their culture andit really does affect the
outcome.
So a lot of this, like wetalked about, is avoidable and
we want that for everyone.
We don't want our hearts to bebroken and for people to endure
this.
So it's definitely, you know,all of us being committed to

(11:07):
this and helping perpetuate thatcan really make a positive
impact.

Amanda Knight (11:11):
Absolutely Okay, scott.
I think it's time.

Scott Gordon (11:14):
We've reached the end of our podcast and you know
what that means.
It is time for a little,something we call rapid fire,
and you just answer thequestions off the top of your
head.
Michelle.
There's no right or wrong.
Question number one what's askill you've always wanted to
learn, but haven't yet?

Michelle Levine (11:32):
I have a tie, so it seems like maybe I'm
already giving a wrong answer.
Jiu-jitsu and chess, I mean,but not together.

Amanda Knight (11:41):
Oh wow, I mean, if they were together.

Scott Gordon (11:43):
I was going to say Maybe together I was going to
go there.

Amanda Knight (11:47):
I mean I like that they're opposite into the
spectrum.
One's really hard for yourbrain.

Michelle Levine (11:51):
One's really hard for your body, so good
choice.

Amanda Knight (11:53):
It's about balance so good choice.

Scott Gordon (12:00):
Both involve a lot of losing before you get good
um.

Michelle Levine (12:02):
Question number two are you an early bird or a
night owl?
Night owl, really, the morningis not for me.
I'm an early bird what aboutyou, scott?

Amanda Knight (12:08):
what are you like ?
Let me hold on, I'm gonna guess.
Scott, I think you're a nightowl agreed.

Scott Gordon (12:14):
Believe it or not, I don't really sleep, so I'm
both both so you're a vampire.
I am ill vampiro, as we callthem in the old country.
Yes, okay, question numberthree, our final question.
It's summertime, so you knowlots of people are out and about
and, uh, taking vacations.

(12:34):
We're dying to know what is thebest vacation you've ever taken
.

Michelle Levine (12:39):
A few years ago , my partner Andrew and I went
to Copenhagen and Berlin and itwas absolutely magical.
I cannot recommend it enough.
Those cities are justincredible.

Amanda Knight (12:50):
Sounds like it, so you heard it here first.
Folks, Not only did you getexcellent insights into current
exposures, but you also got atravel tip.
You're welcome, folks.
Not only did you get excellentinsights into current exposures,
but you also got a travel tip.
You're welcome everyone.
So thanks, michelle.
That was incredibly informativeand eye-opening.
If you're a retail agent withquestions about these kind of
risks, we encourage you to reachout to your CRC specialty

(13:10):
broker.
Don't forget to subscribe formore specialist insights on
placing you first and we'll seeyou next time.