Chubb Faces Scrutiny Over Clergy Abuse Claim Settlements with NY Archdiocese

Chubb Insurance, the largest publicly traded property and casualty insurance company globally with a valuation around $115 billion, is currently involved in controversy regarding its handling of clergy sexual abuse claims against the New York Archdiocese. Despite Chubb’s public stance of commitment to fair and prompt claims settlements, it has faced criticism for delaying and denying claims related to these abuse cases, which date back to as far as World War II. The New York Archdiocese has raised at least $300 million to settle claims from approximately 1,300 abuse survivors, financed partly through significant asset sales and operational cuts. New York State law permits lawsuits for abuse spanning many decades, which has contributed to a surge in claims against the archdiocese. The Archdiocese’s insurer, Chubb, has contested its coverage responsibilities, asserting that their policies do not cover abuse claims that were allegedly "expected or intended," a stance that has sparked legal and reputational disputes. This position implicates former church leaders and undermines the insurer’s stated commitment to honoring its coverage obligations. The conflict highlights complex issues surrounding insurance liability and coverage in cases of historic abuse within religious institutions. The Archdiocese claims it has paid over $2 billion in premiums to Chubb over the years, expecting comprehensive coverage for these claims. However, Chubb's denial of claims based on the nature of the abuse challenges traditional insurance principles regarding coverage exclusions related to intentional acts. This ongoing dispute between a major insurer and a large religious institution accentuates challenges insurers face in underwriting risks related to long-tail liabilities, especially in cases involving alleged institutional misconduct. It also raises questions about policy language and the scope of coverage applicable to abuse claims. Regulatory scrutiny and legal pressures on both insurers and institutional policyholders may intensify as such matters proceed in courts. The situation further exemplifies the financial and operational impacts on institutions confronted by historic abuse allegations, including budget reductions and asset liquidation to fund settlements. For insurance professionals, this case underscores the critical importance of clear contract terms, risk assessment in specialty lines, and claims management strategies when dealing with abuse-related litigation and settlements.