Removal of statute of limitations on sexual crimes resulting in liability insurance challenges

On January 1, a new law took effect in Illinois that removes the statute of limitations for a range of criminal sexual assault charges. This is a trend that is increasing across the country, including states such as California, Florida, New York, and North Carolina, among more than a dozen others.

We are now hearing that providers are beginning to find that their liability insurance policies are being canceled or not renewed for Sexual Abuse and Molestation and/or Sexual Harassment, and we are hearing that is phenomenon is not limited to Illinois.

Below is some information that one of our national partners shared with ICOY:

“In general, the Health & Human Service insurance marketplace has been showing signs of distress for several years largely due to what is now being called ‘social inflation.’  Social inflation generally refers to the rising costs of insurance claims that are a result of societal trends and views toward increased litigation, broader contract interpretations, plaintiff-friendly legal decisions, and larger jury awards.

The current legal climate is resulting in a rapidly hardening/deteriorating insurance market. In this market, carriers are taking rate, scaling back coverage, and tightening up their underwriting and their appetite; or they are leaving the sector altogether.  Markel was one of the most recent insurance companies to exit this space advising: ‘We have made the difficult decision to non-renew our current book of Foster Care/Adoption and Child Welfare Group Homes,’ making an already very limited insurance marketplace even smaller. 

I’m including a link below to an interview with Philadelphia Insurance Companies’ Assistant Vice President where he discusses the state of the marketplace. While [redacted] is not with Philadelphia they have market share and are a leader in the HHS space.  All the other carriers in this sector are experiencing the same and following suit.”  

Obviously this is a serious problem for the field of children and youth services and potentially for the broader sector as a whole. Information is still emerging about the impact of this legislation. Please let us know if this is affecting your organization. We will be working with other state and national partners to understand and respond to this problem and will immediately seek a meeting with the Illinois Attorney General as well.