Child Victims Act will likely increase New York school insurance rates
‘Insurance archaeologists’ will likely help untangle decades old cases
Is the state’s new Child Victims Act going to make your school taxes go up?
According to the Times Union, that remains to be seen. But insurance companies are warning that the new law will likely lead to higher insurance rates for the state’s nearly 700 public school districts.
“This is definitely going to impact any school insurance company,” said Tom Austin, assistant executive director at New York Schools Insurance Reciprocal, which along with Utica National, is one of two firms that insure schools in the state. “We’re monitoring this really closely.”
The concerns were recently highlighted by the state School Boards Association in its newsletter, “On Board,” in which other officials agreed that rates would likely rise.
This past winter, after years of attempts, the state’s Child Victims Act was passed and signed into law. It expands the circumstances under which victims of child abuse can sue for damages. The new law allows people to sue after age 55. Previously, civil suits had to be brought within three years of the victim’s 18th birthday.
The law also opens a one-year window in which people can file claims for past abuses, even if they occurred decades ago.
Much of the debate in years prior to the law’s passage centered on religious organizations where clerics, such as priests or rabbis abused youngsters.
There has been comparatively little discussion about the law’s potential impact on schools, however, even though there have been occasional reports of abuse in those as well as other institutions.
Moreover, there are thousands of schools and hundreds of thousands of teachers, both active, retired and deceased. If even a tiny fraction committed abuses years ago, the law would open the door to new and potentially costly lawsuits.
School districts in New York have plenty of coverage. Most have a basic $1 million policy with excess coverage that can go to $10 million or $25 million.
The policies are a relatively small piece of the budget pie, with districts paying anywhere from $50,000 to $1 million that the larges districts pay.
But with expectation that claims will rise, so will rates, which are ultimately shouldered by taxpayers.
No one argues against victims of abuse having their day in court. But observers have raised concerns about the cost of lawsuits and the possibility that some of the claims may be unfounded attempts to get monetary settlements.
“While we stand with and support the survivors of these horrendous crimes, the Lawsuit Reform Alliance remains concerned about the integrity of the civil justice system when statutes of limitations are eroded,” said Tom Stebbins, executive director of the alliance, a group that pushes for tort reform.
Stebbins’ group noted that in California, where a similar law has been in place for a decade, the Los Angeles school district last year paid out $22 million from lawsuits brought by 16 current and former students against two coaches who had abused the kids. The district also paid out $88 million in 2016 and $139 million in 2014 over similar allegations.
One area of particular concern is the one-year window that will allow for victims of alleged abuse from 30, 40 or 50 years ago to file a lawsuit seeking damages. In such cases, the perpetrators could be deceased.
“There’s no defendant that you can look in the eye,” said Alida Kass, president and general counsel at the New Jersey Civil Justice Institute, where a similar law is on the governor’s desk awaiting approval or veto.
Such cases tend to be settled regardless of their merits, she said.
Another complicating factor in lawsuits from decades ago: A school may have been covered by a different insurance company for which there are no records. Then litigants bring in “insurance archaeologists” to try and untangle insurance policies and records from bygone days.
Kass added that many things have changed since California first put its law in place. The #MeToo movement as well as the scandals surrounding sex abuse by priests have put the concept of abuse in the forefront of peoples’ minds, which could lead to more suits.
“Along with that, unfortunately, comes a climate that is also more conducive to potentially fraudulent claims,” she said.
Jeff Herman, a lawyer specializing in sex abuse claims, said he’s hearing from lots of people who say they were abused in public schools including those that date from the 1970s and 1980s.
He’s also hearing from people victimized in foster care and institutional settings. “I’m getting, I would say, 10 to 15 new case inquiries a day,” he said.