A Montana US court held that the insurers of a Roman Catholic diocese should not cover claims for events of sexual abuse outside of policy time limits. The church tried to persuade the court to apply the continuous trigger approach which is often used in asbestos injury coverage cases. Under this approach the insurer may be liable for the ultimate consequences of the progressive onset of damage (for instance as occurs with asbestosis) even if some of the loss-causing events took place before the policy commenced.
In sexual abuse claims, every abuse must be considered a separate incident even if the victims continue to experience the after effects of the abuse during later policy periods. In addition, the court held that claims that were made before the insurer’s claims-made policies went into effect were not covered.
With the help of insurers, the diocese plans to file for Chapter 11 bankruptcy protection and to distribute among about 300 victims the amount of $15 million available to settle the claims of all victims.
