Archdiocese of New York sues Chubb over denied abuse claims coverage

Archdiocese of New York sues Chubb over denied abuse claims coverage | Insurance Business America

Legal Insights

Archdiocese of New York sues Chubb over denied abuse claims coverage

Lawsuit accuses of failure to provide coverage for unresolved sexual abuse settlements

Legal Insights

By
Kenneth Araullo

The Archdiocese of New York has filed a lawsuit against Chubb Ltd, accusing the insurer of violating New York’s general business law by denying coverage for sexual abuse claims.

Cardinal Timothy Dolan (pictured above), the archbishop of New York, addressed the issue in a letter to parishioners, stating that despite the archdiocese having paid over $2 billion in premiums to Chubb over the years, the insurer is attempting to evade its legal and contractual obligations.

“It has always been our wish to expeditiously settle all meritorious claims,” the cardinal said, according to a report from AM Best.

In 2019, the archdiocese initiated legal action against 30 insurance companies, including Chubb, seeking coverage for settlements related to sexual abuse claims. Chubb responded with a countersuit, aiming to avoid indemnifying or defending the archdiocese, but a New York judge dismissed the case in December 2023.

Dolan noted that while the archdiocese has settled more than 520 cases, approximately 1,400 claims remain unresolved. Some of these cases date back as far as World War II, with the largest group of allegations involving a former volunteer basketball coach and a former janitor.

These claims were made possible by the 2019 Child Victims Act, which opened a window for survivors of childhood abuse to file claims. The surge in claims following the law’s passage has led several religious organizations, including the Catholic Diocese of Syracuse, to file for bankruptcy.

Chubb, in a statement, accused the archdiocese of covering up widespread child sexual abuse for decades and refusing to compensate victims despite its significant financial resources. The insurer claimed the archdiocese is attempting to shift responsibility to its insurers while withholding critical information about its knowledge of the abuse

Chubb also accused the church of concealing assets and wealth. The company described the lawsuit as a “financial maneuver” aimed at deflecting responsibility.

In response to the financial strain caused by the abuse crisis, the archdiocese announced it is selling its headquarters in Midtown Manhattan. Proceeds from the sale are intended to help alleviate the financial burden. The archdiocese is also considering selling other properties in its portfolio as part of its broader effort to address the ongoing crisis.

What are your thoughts on this story? Please feel free to share your comments below.