Insurance Coverage Considerations Stemming from the New California Child Victims Act

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On October 13, 2019, when California’s governor signed AB 218—the California Child Victims Act (CCVA)—California became one of at least nine other states to enact some form of window legislation for childhood victims of sexual assault. The CCVA became effective on Jan. 1, 2020. This article explores the CCVA’s pertinent changes to existing law for pursuing childhood sexual assault claims, as well as some of the key insurance coverage issues arising from this new law.

The text of the CCVA is substantively similar to other states that have passed similar legislation, such as New York, and provides the following impactful changes:

1.  The definition of childhood sexual abuse is expanded and is now referred to as “childhood sexual assault.”

2. The CCVA increases the time limit for commencing an action for recovery of damages suffered as a result of childhood sexual assault to 22 years from the date the plaintiff attains the age of majority (i.e., age 40), or within five years of the date the plaintiff discovers (or reasonably should have discovered) that the psychological injury or illness occurring after the age of majority was caused by sexual assault, whichever is later.

3. The CCVA provides for the recovery of up to treble damages against a defendant who is found to have covered up the sexual assault of a minor, defined as “a concerted effort to hide evidence relating to childhood sexual assault.”

4. A robust certificate of merit process must be followed for plaintiffs who are 40 years of age and older. 

5. The plaintiffs have a three-year look-back period, starting January 1, 2020, to bring claims that are otherwise barred by the applicable statute of limitations. Numerous lawsuits have already been filed in several courts throughout California. 

In terms of insurance coverage, a threshold issue to consider is whether a liability policy that potentially covers these newly-brought claims even exists, as the vast majority of these claims will involve sexual assault that allegedly occurred years, if not decades, ago. Because a complete copy of these historical policies may not exist, secondary evidence of the policies might be assembled to prove the existence of coverage.[1]

Another key issue is whether potential coverage exists for parties whose negligent, or even reckless, conduct contributed in some way to the sexual assault. Although no coverage exists for the individual perpetrator of the sexual assault, nuances exist for claims for negligent hiring, training, and supervision of the perpetrator.[2]

The CCVA’s provision of awardable treble damages for a cover up will also be a hotly-contested issue on both the defense and coverage angles. For example, the requisite intent requirement that a plaintiff must prove against a defendant may ultimately equate to an intentional act, which is typically barred from coverage under an insurance policy that requires an accident.[3] Further, the punitive nature of treble damages in this provision also puts it at odds with California’s public policy against coverage for punitive damages.[4] 

In addition to the above, there are many coverage issues that must be considered for an accurate assessment of coverage for this new flood of CCVA claims. Stay tuned for an updated post. You can also listen to Goldberg Segalla’s Timely Notice podcast series on the Child Victims Act: State by State.

[1] See Cal. Evid. Code § 1521; Dart Indus., Inc. v. Commercial Union Ins. Co., 28 Cal. 4th 1059 (2002).

[2] See Cal. Ins. Code § 533; J. C. Penney Cas. Ins. Co. v. M. K., 52 Cal. 3d 1009 (1991); Minkler v. Safeco Ins. Co. of Am., 49 Cal. 4th 315 (2010); Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co., 5 Cal. 5th 216 (2018).

[3] See J. C. Penney Cas. Ins. Co., 52 Cal. 3d at 1028 n. 17 (1991) (“We note, however, that the very notion of ‘accidental’ child molestation is implausible.”).

[4] See PPG Indus., Inc. v. Transamerica Ins. Co., 20 Cal. 4th 310, 317 (1999).