In September 2025, a New York Supreme Court held that a sublimit of insurance was not reduced by the $100 000 retention which was called in the policy a “self-insured retention”.
The events were covered for $200 000 “any one occurrence”. The court held that the language of the policy was not ambiguous. A self-insured retention is the amount that an insured covers before insurance coverage begins to apply rather than a deductible limiting the coverage amount. The interpretation was consistent with the use of the phrase in the policy “excess over $100 000” cover, indicating that the insurer’s liability was on top of the $100 000 retention rather than inclusive of it.
The case related to hundreds of lawsuits alleging sexual abuse by members of the clergy of the diocese of the insured church which had policies with the insurer from 1975 to 1978.
The insurer’s argument that the retention should be deducted from the limit was rejected. Interpreting the sublimits as inclusive of the retention would render some of the specific excess coverage inapplicable to four of the seven categories of loss for which the sublimits were less than or equal to $100 000.
The words “deductible”, “excess”, and “retention”, are often used interchangeably or loosely in policy wordings. In this case the word “retention” was given a specific meaning which, on the related policy provisions, would probably be similarly interpreted by a South African court.