Reading this article may be the first step in protecting you and your business from the ruthless personal injury attorneys that lurk in the shadows of our society and make a living suing people.
Yes, there are legitimate claims being brought to the doors of our courthouses, but many of them are frivolous and unwarranted.
Unfortunately in our society anyone can make any allegation they want and initiate a lawsuit, unwarranted or not.
As the recipient of a lawsuit, you can’t just take the summons and complaint apart page by page, roll them into little balls and play trashcan basketball. If the recipient of a lawsuit, individual and/or business, does not have insurance or is not properly covered, they must go out, find an attorney and potentially spend an ungodly amount of money to defend their position. In many cases, an uninsured or improperly insured business, served with a lawsuit can be financially destroyed and their businesses, not to mention ruin their reputation and careers as providers.
If you own or manage a Day Care, Nursery School or Church and your insurance policy does not provide the coverage alleged in a lawsuit against you, i.e. Abuse & Molestation, then neither the policy nor its coverage will respond to it and it will not provide legal defense in your suit. When you buy an liability insurance policy, you are buying legal defense for the perils it provides coverage for.
Our firm receives dozens of calls weekly from people and businesses calling to get an insurance quote for their Day Care, School or Church and ask, “how much for an insurance policy with $1,000,000 in liability insurance coverage”? Occasionally prospects indicate they have found a cheaper price elsewhere and when asked ” by the way, what is included in that $1,000,000 quote that you received from Joe Schmo over at Ole Acme Insurance Brokerage?” 98 times out of 100 their response is, “I don’t know but Joe Schmo Broker told me he is giving me a $1,000,000 in liability”.
If you are sued and you have a “$1,000,000 general liability policy” do not assume that it includes coverage for Abuse & Molestation and that your insurance company will defend you, they will not! Remember, you get what you pay for. Insurance is a business; the truth of the matter is that all insurance companies will look for any way out of defending and paying a claim.
Although many people think “it can’t happen to me, I’m a professional that runs an upstanding business and I am an expert at preventing, avoiding and diffusing situations that might bring harm to my precious little clients”. Here are some claim examples.
1. Little Johnny, with his creative and wild imagination, comes home with a bruise on his knee. When asked by his parents how he got the bruise, he tells his mommy or daddy that the teacher hurt him. Little Johnny begins to realize that as he continues to tell his story the more attention he is getting from his parents. Charges are filed that include abuse, improper hiring, failure to supervise and failure to keep the child out of harm’s way. Approximate cost to defend this claim was $20,000. COVERAGE: Abuse & Molestation.
2. The parents of a child decide to enroll their child in a private kindergarten but first they have to take an entrance exam to get in. The child does poorly on the entrance exam and is refused admission to the school. The parents initiate a lawsuit against the local nursery school their child is currently attending; the allegation is failure to provide the education and professional services they thought their child was getting. They are suing for tuition reimbursement and the cost of a private tutor. COVERAGE: Professional Liability
3. On her own volition, a young girl was in the backyard of a day care that she attended. While she was running she tripped over her own feet an slammed her chin into a plastic yard toy. She received 20 stitches and the medical costs remaining after her parents health insurance company paid the bill was $5,400.00. Because she once appeared in a local ad for a clothing retailer, her parents alleged that her future modeling career was destroyed. They sued for the medical expenses and the future loss of income. Settlement: Accident & Medical $5,400.00. General Liability Loss of Future Income: $25,000, open & ongoing.
The fact of the matter is that anyone can initiate a sexual abuse or sexual molestation lawsuit and do it for the cost of a peanut, or less?
This is why the courts are inundated with lawsuits. Why not sue? If a plaintiff has a semi strong case, most if not all attorney’s will work on a contingency basis, which means they only get paid if there is a settlement or judgment. This means that a plaintiff does not have to spend any money to hire an attorney and start a lawsuit. It also doesn’t cost an attorney much to file a lawsuit on behalf of a plaintiff, with a few finger strokes of an attorneys hand on the keyboard and for a small filing fee, voila, you have yourself an instant lawsuit.
As a recap of what we have learned so far, a person initiating a lawsuit pays nothing, in most cases an attorney represents a plaintiff on a contingency basis which in turn pays peanuts to file a lawsuit. On the other hand, a defendant could pay thousands if not tens or hundreds of thousands to defend a lawsuit that might have no merit. Is that fair? Fair or not, that is how our system works. All we can do is to try and protect ourselves as best that we can.
What makes A&M insurance claims worse than other types of claims, i.e slip and fall;? Because usually children are involved.
These claims tend to escalate because the parents of the child who has been allegedly abused or molested can become extremely irate and irrational. This can further lead to more damage to your reputation and larger jury awards.
So how do you protect yourself against a sexual abuse or sexual molestation lawsuit?
- Go out and find an agent or broker that understands what coverages are needed to properly insure your business.
- Have a clear and concise employee manual that includes a zero tolerance for improper behavior. i.e. Corporal punishment, abuse & molestation and how to properly deal with these and similar incidents.
- Speak to an attorney about incorporating which can also provide an additional layer of coverage
What are some of the important coverage’s when insuring a day care? Some important coverage’s to include when insuring a day care is physical abuse and sexual molestation coverage & professional liability. There are other coverage’s that are equally important, but we will leave them for a separate article or a phone consultation.
- Insurance policies are not all the same, even a policy that may include physical abuse and sexual molestation; as far as A&M is concerned you still need to know
- Is A&M defense costs inside or outside the liability limits?
- What is the actual A&M limit being provided? Is A&M a sublimit or are full limits provided?
- What is the A&M deductible
- If there is a deductible, is the A&M deductible per claim or per occurrence ?
As stated above, an accusation of physical abuse and/or sexual molestation against a day care without the proper coverage can financially wipe out a business. To take matters a step further, in addition to a lawsuit financially destroying a business and the individual accused, their reputation could be equally destroyed. This could also destroy their career as day care entrepreneurs. Would you send your child to a school or a school that is being run by an individual that has been openly accused of abuse and/or molestation? Hmmmmm. Which would you rather have, no business and a scarred reputation or a thriving business with a great reputation? Having broad insurance coverage that includes A&M and professional liability can help afford a solid defense which would be provided, through your insurance carrier, to clear your good name and alleviate the financial burden associated with a lawsuit. What better way to get redemption against your accuser then having a war chest to prove your accuser wrong. Without being able to defend yourself in a court of law, you can tell everyone in the world how innocent you are but without the means to prove it, it means nothing.
Conclusion, be prudent and wise, deal with an educated insurance profession who understands the needs of your business and can help you put together an insurance program for your business.
There are other coverages that are important to a day care that we did not include in this article. Ask your insurance professional about other coverages for your day care business. Have a clear and concise employee manual that includes a zero tolerance for A&M and how to properly deal with incidents of A&M. Speak to an attorney about incorporating which can also provide an additional layer of coverage.
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