Summary: With an effective date of 9/1/22 ISO has made available several endorsement amendments to address abuse or molestation liability exposures under the Commercial Auto Coverage Part. This corresponds with similar endorsements made available under the General Liability and Umbrella Coverage Parts, but also includes an option to exclude the coverage in its entirety from the auto coverages.
Topics Covered:
CA 28 03 09 22 – Abuse Or Molestation Exclusion For Covered Autos Liability Exposure
With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement.
The following exclusion is added to Covered Autos Liability Coverage:
Abuse Or Molestation For Covered Autos Liability Exposure
This insurance does not apply to damages 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; or
- 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 excluded by Paragraph 1. above
Analysis:
While a number of endorsements are being made available under the Auto Dealers Coverage Form, only one endorsement is applicable to the Business Auto Coverage Form, CA 28 03. This endorsement is also available for attachment to the Auto Dealers Coverage Form and the Motor Carriers Coverage Form. This endorsement replaces endorsement CA 25 28, which is being withdrawn.
Endorsement CA 28 03 excludes the general liability exposures of abuse or molestation, including any sexual abuse or sexual molestation, as well as any associated negligence pertaining to such, in connection with covered autos. While this form is not mandatory, we would suggest at a minimum that if sexual abuse or sexual molestation liability coverage is being added to the insured's CGL, this endorsement be attached to the applicable auto policy. As with all endorsements, the insured's potential for liability should be reviewed and protected, to the extent possible. This endorsement offers one such tool.
In certain coverage circumstances, the auto policy and the general liability policy will coordinate to provide coverage, with certain portions of the coverage provided under the auto and other portions covered by the general liability. This is true with the loading or unloading coverage provision, so that If the insured has both the CGL form and the BAP, he has liability coverage before moving property onto a covered auto (the CGL form), while the property is being loaded onto the auto (the BAP), while the property is being transported on the covered auto (the BAP), while the property is being unloaded from the auto (the BAP), and after the property has been finally delivered (the CGL form). Either the BAP or the CGL form will respond to a liability claim from a third party based on the moving of property. Also, loading or unloading does not include the movement of property by means of a mechanical device (such as a forklift) that is not attached to the vehicle. If a hand truck is used, this is included in the action of loading or unloading and a claim arising from that use would be excluded under the CGL form but covered under the BAP.
CA 27 21 09 22 – Abuse Or Molestation Exclusion For General Liability And Acts, Errors Or Omissions Liability Coverages
With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement.
- The following exclusion is added to Paragraph 2. Exclusions of Paragraph A. Bodily Injury And Property Damage Liability and Paragraph B. Personal And Advertising Injury Liability of Section II – General Liability Coverages:
This insurance does not apply to any of the following:
Abuse Or Molestation
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:
(a) Employment;
(b) Investigation;
(c) Supervision;
(d) Reporting to the proper authorities, or failure to so report; or
(e) Retention;
of a person for whom any "insured" is or ever was legally responsible and whose conduct would be excluded by Paragraph A.(1) above.
The following exclusion is added to Paragraph B. Exclusions of Section III – Acts, Errors Or Omissions Liability Coverages:
This insurance does not apply to any of the following:
Abuse Or Molestation
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:
(a) Employment;
(b) Investigation;
(c) Supervision;
(d) Reporting to the proper authorities, or failure to so report; or
(e) Retention;
of a person for whom any "insured" is or ever was legally responsible and whose conduct would be excluded by Paragraph B.(1) above
Analysis:
The purpose of this endorsement is to exclude any an all abuse or molestation exposures from the Auto Dealers Coverage Form. This endorsement follows similar exclusions in the general liability endorsement CG 40 28 09 22 Broad Abuse or Molestation Exclusion, discussed here: https://www.nuco.com/fcs/2022/05/23/general-liability-abuse-or-molestation-liability-endorsement-amendments-part-i/
CA 27 22 09 22 – Sexual Abuse Or Sexual Molestation Exclusion For General Liability And Acts, Errors Or Omissions Liability Coverages
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The following exclusion is added to Paragraph 2. Exclusions of Paragraph A. Bodily Injury And Property Damage Liability and Paragraph B. Personal And Advertising Injury Liability of Section II – General Liability Coverages:
This insurance does not apply to any of the following:
Sexual Abuse Or Sexual Molestation
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:
(a) Employment;
(b) Investigation;
(c) Supervision;
(d) Reporting to the proper authorities, or failure to so report; or
(e) Retention;
of a person for whom any "insured" is or ever was legally responsible and whose conduct would be excluded by Paragraph A.(1) above.
B. The following exclusion is added to Paragraph B. Exclusions of Section III – Acts, Errors Or Omissions Liability Coverages:
This insurance does not apply to any of the following:
Sexual Abuse Or Sexual Molestation
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:
(a) Employment;
(b) Investigation;
(c) Supervision;
(d) Reporting to the proper authorities, or failure to so report; or
(e) Retention;
of a person for whom any "insured" is or ever was legally responsible and whose conduct would be excluded by Paragraph B.(1) above.
Analysis:
This endorsement excludes liability for sexual abuse or sexual molestation, including associated negligence. The endorsement is similar to general liability endorsement CG 40 29 09 22 Sexual Abuse or Sexual Molestation Exclusion. Here the abuse or molestation must be sexual in nature, which would not preclude coverage for any other type of abuse or molestation. For example, if derogatory comments are consistently made against a person for the way they dress, talk, walk, etc., this could be considered a type of abuse that would be covered.
CA 27 23 09 22 – Sexual Abuse Or Sexual Molestation Liability Coverage
This endorsement corresponds with the general liability endorsement of the same title, CG 04 14 09 22. An analysis of the coverage endorsement can be found here. The Who Is An Insured portion of the endorsement follows that of the liability coverage under the Auto Dealers Coverage Form. The endorsement 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. The key to coverage here is that the acts of the perpetrator must be found to be unintended to cause injury.
CA 27 24 09 22 – Sexual Abuse Or Sexual Molestation Of Any Person Committed By The Insured Liability Coverage
This endorsement corresponds with the general liability endorsement of the same title, CG 04 15 09 22. An analysis of the coverage endorsement can be found here. There is a single difference in this form from endorsement CA 27 23 09 22 Sexual Abuse or Sexual Molestation Liability Coverage; that difference being that while CA 27 23 excludes acts of sexual abuse or sexual molestation of any person committed by anyone, endorsement CA 27 24 09 22 excludes only those acts committed by the insured. This is accomplished by the definition of "act of sexual abuse or sexual molestation".
"Act of sexual abuse or sexual molestation" means (emphasis added):
- actual, alleged or threatened sexual abuse or sexual molestation of any person committed by the insured; or
- 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.
The Auto Dealers form CA 00 25 defines "insured" as any person or organization qualifying under the Who is An Insured provision of the applicable coverage. There are multiple Who is An Insured provisions; the provisions are for covered autos, customer's autos, general liability, and acts, errors or omissions. Depending on the coverage section, the insured may be You and anyone else while using the vehicle with permission, or an "employee" for autos owned by that "employee", or partners, or partners and spouses, or members, or others. As with CA 27 23, the Who Is An Insured portion of the endorsement follows that of the liability coverage under the Auto Dealers Coverage Form.
As with CA 27 23, the key to coverage here is that the acts of the insured must be found to be unintended to cause injury.
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