To gain some insight on the challenges and exposures institutions such as Penn State, SU, and other facilities and companies face, and what can be done to help mitigate and address these risks, we spoke with Genevieve Alexander, Senior Underwriter of NAS Insurance Services. Based in Encino, California, NAS is an independent underwriting manager that has developed leading-edge specialty products for more than 30 years.
Genevieve has been with NAS for eight years, and oversees the firm’s Sexual Misconduct and Molestation Liability Insurance, Abuse & Molestation Insurance, and MEDEFENSETM Plus, Social Services, and Long Term Care products.
Annie George (AG): The Penn State and SU allegations received a great deal of press and public outrage, much more than other cases of sexual abuse that have come to light over the last decades. Why do you think that is?
Genevieve Alexander (GA): “Penn State and SU brought to the forefront child abuse. You’re talking about programs that are watched by millions of people, who were not only surprised at the allegations but especially by the apparent negligence that took place to address these allegations, which took place years ago.
“There is a great deal of shame around what happens to children in these situations, especially because of who the perpetrator typically is. It’s usually a male over the age of 30 and who is looked up to in society. In both these cases, the alleged perpetrators fit the profile.”
AG: How can these events occur without those in power either knowing or taking responsibility to prevent or stop abuse claims?
GA: “It all comes down to establishing and implementing risk management protocols, where there are checks and balances on staff members – those who are involved with minors, whether they are volunteers, independent contractors, or employees. There are fundamental measures that need to take place, including: conducting a background check against the National Child Abuse and Neglect Registry; checking criminal records and fingerprints; performing face-to-face interviews based on behavioral interview techniques; having written policies that include a zero tolerance statement on sexual abuse; prohibiting staff to be left alone with minors and implementing steps to prevent such potentially dangerous situations (for example, having an aide on a bus so that the last child to get off is not alone with the driver, or mounting cameras); implementing procedures (including reporting policies to management, the authorities, and Child Protection Services) on how to deal with allegations of sexual misconduct and abuse that are outlined clearly in an employee handbook; and training on these reporting procedures. Putting in place preventative measures is critical in stemming situations that could potentially leave minors exposed.
“What’s more, taking away the stigma and the shame from the alleged victim so that they feel they can come forward is also critical. When we look at the allegations that have been discussed in the public forum they are against individuals that were praised. If someone is either the victim or a witness to some type of abuse being done at the hands of those types of individuals, it’s difficult to come forward and state what occurred. What we would recommend is to make the communication as easy and painless as possible for individuals who have witnessed abuse and, of course, for those who are abused. Management’s commitment to act is also critical if someone reports something.”
AG: Have you seen an increase in institutions and companies asking for insurance coverage for this type of exposure since these recent allegations?
GA: “We are seeing many applicants now that are contractually obligated to carry Abuse & Molestation coverage or Sexual Misconduct and Molestation Liability insurance. We’re also seeing insureds looking to implement risk management techniques and pinpoint where their liability could be and what type of insurance product is needed – whether it’s coming from an insurance agent’s recommendation or the insured’s initiative.
“For example, the New York Board of Education, school boards in Philadelphia, and the Los Angeles Public Health Department contractually require insurance cover. We’re also seeing, for instance, tow truck companies and body shops in Orange County, California being told to carry coverage. You have a tow truck company that goes out at night to pick up or repair a broken down vehicle and the owner of the vehicle is left alone with the driver. This is a potential risk. As you can see, this type of coverage is not only needed for educational institutions or religious institutions (churches, archdioceses), but spans many types of businesses. We recently had an application come in for a delivery service that delivers packages across from a school. They’re not contractually obligated to get the coverage, but are worried that there could be a child nearby where their deliveries are taking place. Since the Penn State and SU revelations, there is definitely a fear to protect against these types of exposures.”
AG: What do your insurance programs cover?
GA: “There is our Abuse & Molestation form that we’ve had for years, in addition to an expansion of that facility into Sexual Misconduct and Molestation.
“The expansion is where you’re most likely going to see growth, as it covers applicants contractually obligated to carry $1 million or more of Sexual Misconduct coverage. It covers legal expenses in addition to the loss. The pricing varies depending on the class and the exposure. If you have an individual that is a vendor going onto a school campus, for example, the school district will require that the food service vendor carry coverage. But the vendor basically comes onto the campus, drops off the food and leaves. There is no real one-on-one exposure to a minor. So the premium will be lower for this type of risk.
“The Abuse & Molestation form is different…there are lower limits, up to $250,000/500,000 for reimbursement of legal expenses and loss, with higher limits available for reimbursement of legal expenses only. Those that don’t have a contractual obligation to carry the coverage will tend to carry this form.
“Many policies out there are either silent or exclude Sexual Misconduct coverage. This is where NAS comes in – about two-thirds of the products we write we’ve created because we see a need and gap in the marketplace. That’s where our footprint is. We tend to come to the forefront in these insurance discussions with products that are neglected in the market, and our Sexual Misconduct form is an example of this. We began to see a great deal of contractual obligations with higher limits being made, and we saw that there may be a need for applicants to consider and purchase this coverage. We saw an opportunity for a niche product that we believe will be in demand today and more so in the future.”
The programs are written through Lloyd’s, are available on a national basis, and are open access to retail agents.
For more information on these products, please contact Genevieve Alexander at (818) 808- 4463, or via email at: galexander@nasinsurance.com.