Introduction

Exclusion Endorsements

CG 40 28 09 22 Broad Abuse or Molestation Exclusion

CG 40 29 09 22 Sexual Abuse or Sexual Molestation Exclusion

Sexual Abuse or Sexual Molestation Coverage Endorsements

CG 04 14 09 22 Sexual Abuse or Sexual Molestation Liability Coverage

Introduction:

The following factors were taken into consideration in the decision to offer these endorsements to help respond to the business needs of insurers and policyholders:

High-profile, highly publicized sexual harassment and assault allegations have brought greater attention to victims of sexual abuse; Statutes of limitations regarding civil actions in sexual abuse cases vary significantly by state, with some state legislatures seeking to extend or repeal certain statutes of limitations with respect to some type of cases involving sexual abuse; The potential for increasing impact on liability insurers in civil actions seeking recovery of damages for sexual abuse against institutions, organizations, and private or public firms.

Withdrawn:

Coinciding with the approval of these new amendments, the current abuse or molestation exclusion endorsements are withdrawn from use:

CG 21 46 07 98 Abuse or Molestation Exclusion

CG 21 97 12 07 Abuse or Molestation Exclusion – Specified Professional Services

New:

New exclusion endorsements are introduced with the filing, as well as several optional coverage endorsements.

Exclusion Endorsements:

CG 40 28 09 22 Broad Abuse or Molestation Exclusion

The following exclusion is added to Paragraph 2. Exclusions of Section I – Coverage A – Bodily Injury And Property Damage Liability and Section I – Coverage B – Personal And Advertising Injury Liability:

This insurance does not apply to damages arising out of:

1. The actual, alleged or threatened abuse or molestation, including but not limited to sexual abuse or sexual molestation, of any person committed by anyone; or

2. The negligent:

1. Employment;
2. Investigation;
3. Supervision;
4. Reporting to the proper authorities, or failure to so report; or
5. Retention;

of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by Paragraph 1. above.

Analysis:

The use of the word 'Broad' in the title of this endorsement is significant in that the endorsement is intended to be all encompassing of excluding liability for any and all types of abuse and molestation of any person, sexual or otherwise.

The endorsement excludes liability arising out of the actual, alleged or threatened abuse or molestation, including but not limited to sexual abuse or sexual molestation, of any person committed by anyone. The exclusion extends to liability arising out of the negligent employment, investigation, supervision, reporting to the proper authorities, or failure to so report, or retention of a person for whom any insured is or ever was legally responsible and whose conduct would be otherwise excluded under the endorsement.

CG 40 29 09 22 Sexual Abuse or Sexual Molestation Exclusion

The following exclusion is added to Paragraph 2. Exclusions of Section I – Coverage A – Bodily Injury And Property Damage Liability and Section I – Coverage B – Personal And Advertising Injury Liability:

This insurance does not apply to damages arising out of:

1. The actual, alleged or threatened sexual abuse or sexual molestation of any person committed by anyone; or

2. The negligent:

1. Employment;
2. Investigation;
3. Supervision;
4. Reporting to the proper authorities, or failure to so report; or
5. Retention;

of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by Paragraph 1. above.

Analysis:

This endorsement applies the exclusions set forth in the broad abuse or molestation exclusion, except that this endorsement excludes liability only for abuse or molestation that is sexual in nature. For example, if an employee of the insured throws a punch at an angry customer giving them a black eye, this abusive action would not be excluded by the endorsement.

Sexual Abuse or Sexual Molestation Coverage Endorsements

The following new endorsements are being introduced to provide carriers with the option to provide some limited coverage for sexual abuse or sexual molestation on a claims-made basis:

CG 04 14 09 22 Sexual Abuse or Sexual Molestation Liability Coverage

CG 04 15 09 22 Sexual Abuse or Sexual Molestation of Any Person Committed By The Insured Liability Coverage

CG 04 16 09 22 Sexual Abuse or Sexual Molestation Liability Coverage (Claims-Made)

CG 04 17 09 22 Sexual Abuse or Sexual Molestation of Any Person Committed By The Insured Liability Coverage (Claims-Made)

CG 27 55 09 22 Supplemental Extended Reporting Period Endorsement for Sexual Abuse or Sexual Molestation Liability Coverage

CG 04 14 09 22 Sexual Abuse or Sexual Molestation Liability Coverage

Several parts of this endorsement are identical to clauses found in the CGL CG 00 01 form. For discussions of those clauses, refer to this article General Provisions of the CGL.

This endorsement excludes all liability for damages under Coverages A and B arising out of sexual abuse or sexual molestation, but provides the insured with a limited amount of coverage for legal damages and defense coverage arising out of sexual abuse or sexual molestation injury until or unless the insured admits, or is found guilty of, or pleads guilty or no contest to, an act of sexual abuse or sexual molestation. The insurer's duty to defend ends only for that particular insured who admits, or is found guilty of, or pleads guilty or no contest to, an act of sexual abuse or sexual molestation, and remains intact for other insureds who might be included in the suit.

Also provided is coverage for damages for "injury" as defined, which is sexual abuse or molestation, but if such acts are intentional they are excluded. The endorsement seems to be providing coverage for sexual abuse or molestation if it is unintentional.

Who Is An Insured is defined in the CG 00 01, and includes those designated in the Declarations who are an individual and spouse with respect to conduct of the business, partnership or joint venture including members and partners and their spouses, limited liability company including members and manager with respect to their conduct regarding the business, other organizations, trusts, volunteer workers, employees other than executive officers within the scope of their employment with certain exceptions.

The amount of insurance applicable to this coverage is shown in the endorsement schedule for each act, and a separate deductible may apply to each act. The coverage is subject to the aggregate limit shown in the schedule.

Paragraphs H. and I. Definitions

H. With respect to the coverage provided by this endorsement, the following definitions are added to the Definitions section:

1. "Act of sexual abuse or sexual molestation" means:

1.  The actual, alleged or threatened sexual abuse or sexual molestation of any person committed by anyone; or
2. The negligent:

(1) Employment; (2) Investigation; (3) Supervision; or (4) Retention;

of a person for whom any insured is or ever was legally responsible and whose conduct would be described by Paragraph a. above.

2. "Injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. "Injury" includes mental anguish or other mental injury sustained by any person, whether or not resulting from injury to the body, sickness, disease or death of any person.

3. "Interrelated acts" means a series of interrelated, causally connected or continuous acts of actual, alleged or threatened sexual abuse or sexual molestation of any person or persons committed, or allegedly committed, by one person or two or more persons acting together, which are the subject of or the basis for any claim or "suit".

Such series of interrelated, causally connected or continuous acts shall be considered to be one "act of sexual abuse or sexual molestation", deemed to be committed at the time of the first such act regardless of:

1. The period of time over which the "acts of sexual abuse or sexual molestation" takes place;
2. The number of persons injured or who are alleging "acts of sexual abuse or sexual molestation";
3. The number of persons who committed or allegedly committed "acts of sexual abuse or sexual molestation";
4. The types of "acts of sexual abuse or sexual molestation" involved or alleged; or
5. The number of times the "acts of sexual abuse or sexual molestation" took place.

I.  With respect to the coverage provided by this endorsement, the following definitions in the Definitions section are replaced by the following:

"Coverage territory" means the United States of America (including its territories and possessions), Puerto Rico and Canada.

"Suit" means a civil proceeding in which damages because of "injury" to which this insurance applies are alleged. "Suit" includes:

1. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or

2. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent.

Analysis:

Definitions are added or revised specifically with respect to this endorsement. Whether coverage is being provided or excluded, the same definitions apply. In reviewing the endorsement, it is important to note that the actual, alleged or threatened sexual abuse or sexual molestation is not defined in Paragraph A where such actions are excluded; while an "act of sexual abuse or sexual molestation" is defined in Paragraph B where coverage is being provided. By not defining a term, it will carry its broadest, standard definition as found in a standard desk reference. In Paragraph B, the term is defined to make it clear what the endorsement is intended to cover, or not cover. Looking at the defined term, the reporting or failure to report an act of sexual abuse or sexual molestation to the proper authorities is not included in the definition, and therefore not covered.

By its definition, "an act of sexual abuse or sexual molestation" excludes the actual, alleged or threatened sexual abuse or sexual molestation of any person committed by anyone. In Paragraph A., the form excludes the actual alleged or threatened sexual abuse or sexual molestation (undefined) of any person committed by anyone. Then, if you read the defined term, it is defined to mean the same exact thing. Therefore, defined or undefined, our analysis is that the coverage here boils down to defense coverage only. If the person is found innocent, or the case dismissed, then their defense costs would be covered, but otherwise anything else would be illegal and as such not covered. Regardless if the person claims that they did not intend to commit the action that caused the injury – it was still actual, threatened or alleged.

By adding a definition of "interrelated acts" this makes it clear that an act of sexual abuse or sexual molestation may be perpetrated by one person or many, that there may be one act or a number of casually related alleged or actual acts, acts may take place over any length of time, and acts may be done in any manner or form. The key is that the act, alleged or actual, will be triggered at the time it was first committed by anyone.

"Injury" is not limited to bodily injury, sickness, disease or death, but also includes mental anguish or mental injury. The mental injury does not have to be accompanied by or result in bodily injury, sickness, disease or death. For example, if a person has recurring nightmares or is afraid to be around other people as a result of alleged acts of sexual molestation by a perpetrator, this would be a type of mental anguish or mental injury.

Unlike the definition of "coverage territory" in the CGL, this endorsement restricts the coverage territory to the entirety of the United States, Puerto Rico, and Canada.

The definition of "suit" includes the same types of proceedings as in the CGL, but is applicable to suits for alleged "injury" instead of for Coverage A & B damages.

Paragraphs A. and B.

Paragraph A. (Exclusion)

A. The following exclusion is added to Paragraph 2. Exclusions of Section I – Coverage A – Bodily Injury And Property Damage Liability and Section I – Coverage B – Personal And Advertising Injury Liability:

This insurance does not apply to damages arising out of:

1. The actual, alleged or threatened sexual abuse or sexual molestation of any person committed by anyone; or

2. The negligent:

1. Employment;
2. Investigation;
3. Supervision;
4. Reporting to the proper authorities, or failure to so report; or
5. Retention;

of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by Paragraph 1. above.

Paragraph B. (Coverage)

B. The following is added to Section I – Coverages:

Insuring Agreement – Sexual Abuse Or Sexual Molestation Liability

1. We will pay those sums that the insured becomes legally obligated to pay as damages because of "injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "injury" to which this insurance does not apply. We may, at our discretion, investigate any report or allegation of an "act of sexual abuse or sexual molestation" or "interrelated acts" and settle any claim or "suit" that may result. But:

1. The amount we will pay for damages is limited as described in Paragraph F. of this endorsement; and
2. Our right and duty to defend ends when:

(1) We have used up the applicable Limit Of Insurance shown in the Schedule of this endorsement in the payment of judgments or settlements; or

(2) The insured:

(a) Admits to perpetrating or taking part in an "act of sexual abuse or sexual molestation" or "interrelated acts" which caused the "injury"; or

(b) Is found guilty of, or pleads guilty or no contest to, in a legal proceeding, an "act of sexual abuse or sexual molestation" which caused the "injury".

However, with respect to this Paragraph (2), our right and duty to defend ends only for the insured that admits to perpetrating or taking part in an "act of sexual abuse or sexual molestation" or "interrelated acts", or is found guilty of, or pleads guilty or no contest to, in a legal proceeding, an "act of sexual abuse or sexual molestation" which caused the "injury".

For the purposes of this Paragraph (2), a legal proceeding includes, but is not limited to, a proceeding that results in a criminal conviction, a judgment, decree, ruling or order pronounced or entered by any court of competent jurisdiction or an order or ruling pronounced or entered by any administrative agency.

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Paragraph C. of this endorsement.

2. This insurance applies to "injury" only if:

1. The "injury" is caused by an "act of sexual abuse or sexual molestation" or "interrelated acts" that was committed in the "coverage territory" during the policy period; and
2. The "injury" is caused by an "act of sexual abuse or sexual molestation" or "interrelated acts" that was committed on the premise(s) or arises out of the project(s), contract(s) or agreement(s) shown in the Schedule of this endorsement.

However, this Paragraph 2.b. applies only if a description of premise(s), project(s), contract(s) or agreement(s) is shown in the Schedule of this endorsement.

3. "Injury" caused by an "act of sexual abuse or sexual molestation" or "interrelated acts" includes any continuation, change or resumption of that "injury" after the end of the policy period.

4. Damages because of "injury" include damages claimed by any person or organization for care, loss of services or or death resulting at any time from the "injury".

Analysis:

Paragraph A of the endorsement excludes liability for sexual abuse or sexual molestation only with respect to Coverages A and B of the CGL. The language of the exclusion follows that of endorsement CG 40 29, described above.

Paragraph B is the insuring agreement describing the damage and defense coverage provided by the endorsement, which is for the insured's legal damages and defense costs for suits alleging injury arising out of acts of sexual abuse or sexual molestation, relying on their defined terms. Note that the duty to defend ends when the insured admits to the act, pleads guilty or no contest, or is found guilty of the act in question. If an insured knows the insurer will no longer defend or pay for his defense of the suit once he confesses to the act, this would seem to decrease the chances of an insured confessing to what he had done.

Paragraph C. Supplementary Payments

Paragraph C. Supplementary Payments

With respect to the coverage provided by this endorsement, we will pay, with respect to any claim we investigate or settle or any "suit" against an insured we defend:

1. All expenses we incur.
2. The cost of bonds to release attachments, but only for bond amounts within the applicable Limit Of Insurance shown in the Schedule of this endorsement. We do not have to furnish these bonds.
3. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day because of time off from work.
4. All court costs taxed against the insured in the "suit". However, these payments do not include attorneys' fees or attorneys' expenses taxed against the insured.
5. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay the applicable Limit Of Insurance shown in the Schedule of this endorsement, we will not pay any prejudgment interest based on that period of time after the offer.
6. All interest on the full amount of the judgment that accrues after entry of the judgment and before we have paid, offered to pay, or deposited in court the part of the judgment that is within the applicable Limit Of Insurance shown in the Schedule of this endorsement.

These payments will not reduce the limits of insurance.

Analysis:

The supplementary payments included in the endorsement mirror those that are provided in the CGL, with the exception of payment of vehicle related bail bonds, which is not applicable to the coverage provided in this endorsement. As with the CGL, the supplementary payments are included within the limit of insurance.

Paragraph D. (Exclusions)

D. With respect to the coverage provided by this endorsement, Paragraph 2. Exclusions of Section I – Coverage A – Bodily Injury And Property Damage Liability and Section I – Coverage B – Personal And Advertising Injury Liability are replaced by the following:

Analysis:

Note that the exclusions in this endorsement replace the Coverage A and B exclusions in the CGL, but only with respect to the provisions of this endorsement.

2. Exclusions

This insurance does not apply to:

a. Expected Or Intended Injury

"Injury" expected or intended from the standpoint of the insured.

b. Perpetrated By The Insured

Damages attributable to the insured who admits to perpetrating or taking part in an "act of sexual abuse or sexual molestation" or "interrelated acts", or is found guilty of, or pleads guilty or no contest to, in a legal proceeding, an "act of sexual abuse or sexual molestation" or "interrelated acts" which caused the "injury".

For the purposes of this exclusion, a legal proceeding includes, but is not limited to, a proceeding that results in a criminal conviction, a judgment, decree, ruling or order pronounced or entered by any court of competent jurisdiction or an order or ruling pronounced or entered by any administrative agency.

c. Injury Or Damage Under Coverage A Or Coverage B

"Injury" or damage, including but not limited to "bodily injury", "property damage" or "personal and advertising injury", to which Coverage A or Coverage B applies.

d. Contractual Liability

"Injury" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply:

(1) To liability for damages that the insured would have in the absence of the contract or agreement; or (2) To assumption of tort liability in any contract or agreement shown in the Schedule of this endorsement, to the extent the assumption of tort liability is permitted by law.

Analysis:

Note that Paragraph 1. Exclusions of the CGL was not replaced and thus will apply as stated in CG 00 01.

Exclusions 2. a.and c. are fairly self-explanatory:

Exclusion 2.a. – the coverage does not extend to injury that is either expected or intended from the insured's standpoint. This requires the insured's intent to injure, or that the perpetrated act was known by the insured and the insured expected the injury to take place.

Exclusion 2.b. Precludes coverage for any defined act(s) of sexual abuse or sexual molestation that was perpetrated by the insured, or that the insured took part in. This can be determined by either the insured's admittance, or through findings in a legal proceeding. A legal proceeding can include any judgment, decree, ruling, or order by the court of jurisdiction or administrative agency, which results in a criminal conviction.

Exclusion 2.c. excludes any injury or damage to which Coverage A or Coverage B of the CGL form applies.

Exclusion 2.d. Is the contractual liability exclusion which excludes damages for injury the insured is obligated to pay by assumption of liability in a contract or agreement. Exceptions are made for damages the insured would have even if there were no contract in place; or tort liability assumed in a contract or agreement by the insured by virtue of law.

e. Workers' Compensation And Similar Laws

Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.

f. Employer's Liability

"Injury" to:

(1) An "employee" of the insured arising out of and in the course of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of the insured's business; or

(2) The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph (1) above.

This exclusion applies:

(a) Whether the insured may be liable as an employer or in any other capacity; and

(b) To any obligation to share damages with or repay someone else who must pay damages because of the "injury".

g. Employment-related Practices

"Injury" to:

(1) A person arising out of any:

(a) Refusal to employ that person;

(b) Termination of that person's employment; or

(c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person; or

(2) The spouse, child, parent, brother or sister of that person as a consequence of "injury" to that person at whom any of the employment-related practices described in Paragraph (1)(a), (b) or (c) above is directed.

This exclusion applies:

(a) Whether the "injury"-causing event described in Paragraph (1)(a), (b) or (c) above occurs before employment, during employment or after employment of that person;

(b) Whether the insured may be liable as an employer or in any other capacity; and

(c) To any obligation to share damages with or repay someone else who must pay damages because of the "injury".

Analysis:

Exclusions e. and f. are the workers compensation and employer's liability exclusions, which are standard exclusions found in the CGL and other standard liability policies. Injuries that would be covered under workers compensation or similar employment laws will not be covered here.

Exclusion g. excludes in entirety any injury arising out of employment-related practices. Specific injuries are excluded, all in relation to a person's employment, and the exclusion extends to not only the employee but also their immediate family members. The exclusion applies regardless of whether the person is employed at the time of the event causing the injury, whether the insured has strict liability as the employer, or if the insured is drawn into a damage sharing agreement with others because of the injury.

Paragraph E. (Who Is An Insured)

E. For the purposes of the coverage provided by this endorsement, the following paragraph is added to Section II – Who Is An Insured:

Any person or organization added to this coverage part as an additional insured will automatically be an insured under the insurance provided by this endorsement, but only if the insurance provided by this endorsement is required by:

1. The described contract(s) or agreement(s) shown in the Schedule of this endorsement; or
2. A written contract or agreement, if no described contract(s) or agreement(s) are shown in the Schedule of this endorsement;to be provided to such additional insured.

However, the insurance afforded to such additional insured:

(1) Only applies to the extent permitted by law; and

(2) Will not be broader than that which you are required by the contract or agreement to provide for such additional insured.

Analysis:

Some state laws have contractual requirements that extend to showing proof of sexual abuse or sexual molestation insurance coverage. As such, if the insured enters into a contract in a state that has such requirements and the contracting party requires being added as an additional insured to the insured's policy, the provisions of paragraph E will provide such coverage to the extent that the law requires and to the extent required by the contractual agreement when an additional insured is added to the policy, as evidenced by the contract itself.

Paragraph F. (Limits of Insurance)

F. With respect to the coverage provided by this endorsement, the following provisions are added to Section III – Limits Of Insurance:

1. Subject to Paragraph 2. of Section III – Limits Of Insurance, the Sexual Abuse Or Sexual Molestation Liability Aggregate Limit shown in the Schedule of this endorsement is the most we will pay for the sum of all damages because of all "injury" arising out of all "acts of sexual abuse or sexual molestation" or "interrelated acts", including any continuation, change or resumption of such "injury" after the end of the policy period.
2. Subject to Paragraph F.1. above, the Sexual Abuse Or Sexual Molestation Liability Each Act Limit shown in the Schedule of this endorsement is the most we will pay for the sum of all damages because of all "injury" arising out of any one "act of sexual abuse or sexual molestation" or "interrelated acts", including any continuation, change or resumption of such "injury" after the end of the policy period.

With respect to "interrelated acts" that occur over more than one policy period under any policy issued by us, only the Sexual Abuse Or Sexual Molestation Liability Each Act Limit applicable to the first policy period:

a. That provides the coverage provided by this endorsement; and

b. In which the "interrelated acts" were committed;

will apply to all damages because of all "injury" for such "interrelated acts".

Analysis:

Separate limits of insurance apply to the coverage provided by this endorsement, as shown in the endorsement's schedule. The limit of insurance for this coverage is an aggregate limit, which is the most the insurer will pay for all damages for all injuries arising out of all acts covered by the endorsement for which the insured is legally responsible. In addition, the endorsement has a scheduled limit that is the most that will be paid for all damages because of injury(ies) arising out of each act covered by the endorsement.

If an interrelated act(s) occurs over more than one policy issued by the insurer, for purposes of the limit of insurance, the each act limit that applies to the first policy period will trigger the limit that applies to all damages because of injury for these interrelated acts. For example, if it is discovered that an act of sexual abuse took place from 12/30/20 until 6/15/22 with all policies being renewed with the same carrier, then the applicable limit of insurance will be the limit that applies to the policy in effect on 12/30/20. If the policy is not a renewal of the current insurer, then for purposes of the limit of insurance, the each act limit will be the limit shown for the policy in effect on 6/15/22, the date of discovery.

3. With respect to the insurance afforded to additional insureds described in Paragraph E. of this endorsement, the most we will pay on behalf of the additional insured is the amount of insurance:

1. Required by the contract or agreement you have entered into with the additional insured; or  Available under the applicable Limits of Insurance shown in the Schedule of this endorsement; whichever is less.

Analysis:

In connection with the additional insured coverage described in Paragraph E. above, the most that will be paid is the lesser of the amount required by the contract, or the available amount of the limits of insurance shown in the endorsement schedule.

4. Deductible

If a Sexual Abuse Or Sexual Molestation Liability Each Act Deductible is shown in the Schedule of this endorsement, the following provision applies:

a.  Our obligation under this endorsement to pay damages on behalf of the insured applies only to the amount of damages in excess of the deductible amount shown in the Schedule of this endorsement as Sexual Abuse Or Sexual Molestation Liability Each Act Deductible. The limits of insurance shall not be reduced by the amount of this deductible.

b. The terms of this insurance, including those with respect to:

(1) Our right and duty to defend any "suits" seeking those damages; and

(2) Your duties, and the duties of any other involved insured, in the event of an "act of sexual abuse or sexual molestation", "interrelated acts", claim or "suit";

apply irrespective of the application of the deductible amount.

c. We may pay any part or all of the deductible amount to effect settlement of any claim or "suit" and, upon notification of the action taken, you shall promptly reimburse us for such part of the deductible amount as has been paid by us.

Analysis:

If a deductible is shown in the schedule, then the insured will be out of pocket for this deductible amount and the insured's payment will be in excess of that deductible amount. The deductible applies for each act of sexual abuse or sexual molestation; towever, the deductible will not reduce the limit of insurance. The deductible does not impair defense coverage under the endorsement, nor does it alter any duties under the endorsement. If the insurer elects to pay any part of the deductible to settle a claim or suit, the insured must promptly reimburse the insurer the amount of such payment.

Paragraph G. (Conditions)

G. With respect to the coverage provided by this endorsement, Paragraphs 2. and 4. of Section IV – Commercial General Liability Conditions are replaced by the following:

2. Duties In The Event Of An Act Of Sexual Abuse Or Sexual Molestation, Claim Or Suit

a. You must see to it that we are notified as soon as practicable of an "act of sexual abuse or sexual molestation" or a circumstance which may result in a claim. To the extent possible, notice should include:

(1) How, when and where the "act of sexual abuse or sexual molestation" or "interrelated acts" took place;

(2) The specific circumstances surrounding the "act of sexual abuse or sexual molestation" or "interrelated acts";

(3) The names and addresses of any injured persons and witnesses; and

(4) The nature and location of any "injury" arising out of the "act of sexual abuse or sexual molestation" or "interrelated acts".

b. If a claim is made or "suit" is brought against any insured, you must:

(1) Immediately record the specifics of the claim or "suit" and the date received; and

(2) Notify us as soon as practicable.

You must see to it that we receive written notice of the claim or "suit" as soon as practicable.

c. You and any other involved insured must:

(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit";

(2) Authorize us to obtain records and other information;

(3) Cooperate with us in the investigation or settlement of the claim or defense against the "suit"; and

(4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of "injury" to which this insurance may also apply.

d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation or incur any expense without our consent.

Analysis:

The insured's duties condition in the CGL form is replaced with respect to the coverage provided by this endorsement. In essence, all of the same duties described in the CGL form are included in the duties described in this endorsement, with two exceptions:

• First, the duties in this endorsement apply to an act of sexual abuse or sexual molestation, interrelated acts, and injury, while the CGL duties apply to an occurrence or offense;
• Second, this endorsement adds a separate duty to include the specific circumstances surrounding the act of sexual abuse or sexual molestation, or interrelated acts, when making notice to the insurer of an act or circumstance which could trigger a claim under the endorsement.

Otherwise the duties regarding notification, including providing names of the insured, names of witnesses, authorize obtaining records, providing copies of demands, notices and other duties are the same.

4. Other Insurance

If other valid and collectible insurance is available to the insured for a loss we cover under this endorsement, our obligations are limited as follows:

a. Primary Insurance

This insurance is primary except when Paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in Paragraph c. below.

b. Excess Insurance

(1) This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis that is liability insurance applicable to an "act of sexual abuse or sexual molestation" or "interrelated acts".

(2) When this insurance is excess, we will have no duty to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers.

(3) When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of:

(a) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and

(b) The total of all deductible and selfinsured amounts under all that other insurance.

(4) We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits Of Insurance shown in the Schedule of this endorsement.

c. Method Of Sharing

If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers.

Analysis:

The Other Insurance condition under this endorsement coincides with that under the CGL form with respect to how the coverage applies on a primary and excess basis. Unlike the CGL however, the endorsement provides additional insured protection on a primary, rather than an excess, basis. The method of sharing under this endorsement applies in the same manner as in the CGL.

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