Sexual Molestation by a Masseuse

February 20, 2017


The Insured is a Massage Center with a Commercial Package Policy, which includes Commercial General Liability Coverage of $1m per occurrence / $2m aggregate / $5K medical expense.
One of its employees is accused of molesting (masturbating) a twelve year old boy while giving him a massage.
The Insurer has denied coverage based on form 21 16 (07-98) Exclusion – Designated Professional Services.
We believe that the allegations trigger coverage because the alleged act was not part and cannot be included within the definition of the professional services this employee was hired to perform.
Does the client's CGL policy offer coverage for this claim?

 

Puerto Rican Subscriber

 

The Commercial General Liability policy does not specifically exclude personal injury caused by sexual abuse or molestation. Coverage should be excluded for this claim for a number of reasons.

 

Molestation does not necessarily cause bodily injury or property damage. Courts have found, though, that the term “bodily injury” at least includes emotional injuries when there are physical manifestations of those injuries. If it is found that there was a bodily injury, the CGL policy does not provide coverage for expected or intended injury under exclusion (a). If it can be proven that the masseuse knew or should have known that the molestation would cause a physical manifestation of emotional injury, coverage might be excluded.

 

As for exclusion CG 21 16, coverage would not be excluded under this exclusion. The exclusion states that coverage will not be provided “due to rendering of or failure to render any professional service”. In the case at hand, the masseuse went outside of the scope of their employment by masturbating the twelve year old boy. That action should not be considered a professional service as is excluded by CG 21 16.

 

Another thing to consider is the fact that there is a specific endorsement (CG 21 46 07 98) that excludes the coverage for

“actual or threatened abuse or molestation by anyone of any person while in the care, custody, or control of any insured, 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.”

 

If an exclusion is available to add onto the policy, it leads one to assume that coverage would otherwise be provided for this specific injury.

 

Here is a link to a similar question answered previously by our FC&S team, although a different endorsement was applied in this situation.

 

In the end, it seems like this injury would be covered under the CGL policy unless it fell under exclusion A, Expected or Intended Injury.

 

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