Maryland Governor Wes Moore signed into law the Child Victims Act of 2023 back in April of this year. Other states like California, New Jersey, and New York broke ground on the issue with similar laws in recent years. However, where New York and New Jersey put a cap on these laws that allow a lookback of one or two years, during which time survivors can file previously time-barred claims, Maryland does not have a time frame on their lookback period. This means there is no limit on how far one can look back on cases of alleged child sexual abuse. Furthermore, the Maryland law also removes the statute of limitation for lawsuits based on future acts of abuse.
What does the Child Victims Act Entail?
The act rejuvenates previously time-barred lawsuits by victims of child sexual abuse against school boards, public and private, government entities, and private institutions. The Act also raises the statutory cap on civil damages for child sexual abuse. For public school boards and government entities, the damage cap was increased to $890,000 per incident and for private institutions, including independent schools, the damage cap was raised to a $1.5 million cap.
Insurance Concerns
With this new law in Maryland, any institution that is facing a flood of potential litigations will need to review their liability that was written decades ago by insurance carriers. As an example, in April of 2023 the Attorney General’s Office reported on alleged child sexual abuse cases at the office of the Archdiocese of Baltimore that numbered more than 600 people since the 1940s. A record number of abuse claims could implicate coverage from general liability insurance policies, employment practice policies, professional liability policies that could potentially span some 80 years, going back as far as the World War II era.
Policies from decades ago contain very different terms than recent policies. Older policies are unlikely to exclude claims of sexual abuse and likely may specifically cover them. In any older policy, it will be vital to understand the terms and conditions that are included in the decades old policies, especially when reviewing policy limits, which include any aggregate limitations.
More recent policies are more likely to contain aggregate limitations for bodily injury claims, whereas an older policy will not likely have any aggregate limits. In other words, while a more recent policy will likely have a higher per-occurrence limitation on liability, an older policy will likely have a higher value in situations where there are multiple claims of child sexual abuse. Additionally, older policies have provisions for unlimited defense, while newer policies will likely include defense costs within the aggregate limit, so defense costs in newer policies will quickly whittle away the aggregate value of the policy, because defense fees are included in said value.
Policyholders may also have to deal with disputes between insurers centering on how a primary policy’s limitations have been met across all the years the policy had been in place in which the policy may have been triggered before any access policies could be implicated. Child sexual abuse claims may allege abuse of injury over the course of many years. These “long-tail claims” may ignite coverage controversies in which insurers may disagree over allocation of expenses between different policy time frames as well as different levels of coverage.
The contention of insurers over rejuvenated abuse claims is barred over policy exclusions. For example, some policies may exclude claims caused by expected, intentional conduct which is controversial in the context of sexual abuse claims. Other policies may have subjective definitions of “occurrences” that may limit definitions of injuries that were neither “expected nor intended” according to the policy holder.
Many other situations may be arguable according to the tenets of the policy, the few examples given above are in no way exhaustive as the wordage of the policies may be inadequate to accommodate specific claims. There may be territorial restrictions, differences of opinions on verbiage and more. The key to this new legislation for victims securing proper counsel with the experience to wade through the policies early on to determine potential pitfalls that may develop because of the evaluation of child sexual abuse and ensure they receive the compensation they deserve.
