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The Catholic Diocese of Trenton, New Jersey has sued its liability insurers over their alleged “failure and refusal” to agree upon a cost-sharing formula to deal with hundreds of sexual abuse claims brought against the diocese under the New Jersey Child Victims Act.

The lawsuit accuses Century Indemnity (Chubb), First State (Hartford), St. Paul Fire and Marine (Travelers) and National Union Fire (AIG) of violations under the state’s Unfair Claim Settlement Practices Act.

The diocese claims that despite many months of negotiation with the insurers, there has been “minimal progress” toward finalizing an agreement with respect to the defense of the underlying claims and fair compensation to victims. In addition, the diocese says there have been disagreements as to whether certain self-insured retentions in certain policies have been exhausted and also over the proper interpretation of the trigger of coverage.

Meanwhile, the diocese complaint contends, the “underlying litigation remains ongoing, substantial defense costs continue to accrue, and settlement discussions with certain underlying claimants are difficult or impossible to conclude due to minimal guidance and participation from the insurance companies.”

The diocese is asking the court to declare that each of the insurers is obligated to provide a defense. It also wants the court to determine whether self-insured retentions under the St. Paul and National Union policies have been satisfied. The diocese is also seeking damages and costs for an alleged breach of contract by the insurers.

The Child Victims Act (CVA), enacted in 2019, extended the statute of limitations for civil claims related to alleged sexual abuse, allowing victims more time to file lawsuits. The CVA also opened a two-year revival window as of December 1, 2019, for victims to file claims that were previously barred by earlier statutes of limitations.

The diocese lawsuit filed in federal district court accuses the insurers of not acting reasonably promptly with respect to claims; not acting in good faith to settle claims where liability has become reasonably clear; and not providing reasonable explanations for denial of claims.

According to the suit, the insurers have had differing responses to the claims.

The St. Paul policies do not obligate the insurer to defend the diocese in the CVA claims dispute. However, a dispute exists as to whether the self-insured retentions beneath the St. Paul policies have been exhausted by settlements paid to certain plaintiffs, which would trigger indemnity coverage for further settlements that implicate the St. Paul policy years.

The First State policies were not discovered until 2024 and thus far this insurer has not provided the diocese with a coverage position, the suit says.

According to the complaint, National Union has offered to provide the diocese with a defense under a reservation of rights with respect to a small number of claims. However, the diocese says National Union has not covered the “vast majority” of CVA claims under its policies, and the insurer has also disputed the interpretation of the self-insured retentions.

Chubb’s Century has offered to provide the diocese with a defense under a reservation of rights for some CVA claims but has “not responded at all” on numerous others. Century’s payment of defense costs has been “sporadic at best” and the diocese says it has received no coverage position letter or reservation of rights letter.

Century’s and Chubb’s position with this and other lawsuits against dioceses over sexual abuse claims has been that its policies covered liabilities arising from accidents or occurrences which transpired during the diocese’s operation but the policies did not cover liabilities that the diocese “expected or intended.” The church needs to disclose what and when it knew about the abuse and whether it took steps to cover it up, the insurer has insisted.

In February, 2024, Century filed a lawsuit maintaining that the Trenton diocese had not been forthcoming with facts about the claims and thus it is not obligated to provide coverage. That suit was dismissed last October for lack of ripeness. U.S. District Judge Michael Shipp found that the suit was premature because the Trenton diocese had not yet been found liable in any of the cases.

A similar lawsuit by Chubb against the Archdiocese of New York is proceeding in New York courts.

Chubb’s position has been criticized by some sex abuse survivors and their advocates. The Coalition for Just and Compassionate Compensation has accused Chubb of a “national pattern of refusing to pay out thousands of child sexual abuse claims in an attempt to protect its record profits.”

Topics Lawsuits Carriers Claims