I handle the insurance for a church. The policy includes coverage for liability arising from sexual misconduct or sexual molestation. The first exclusion on the sexual misconduct endorsement voids coverage for any person who personally participated in or condoned any act of sexual misconduct or sexual molestation.

I understand there isn’t any coverage for the individual perpetrator if he’s guilty. I also understand that the church would be covered if vicariously brought into the claim against the perpetrator.

But what about defense costs for the accused individual? Does the insurance company owe a person who is accused of sexual misconduct a defense? Anyone can make allegations, and a person might be innocent. If a carrier denies defense and the accused later is found innocent, would the carrier then have an obligation to reimburse the accused for the defense costs incurred?