Joshua L. Blosveren, left, and Bradley J. Nash, right, of Hoguet Newman Regal & Kenney. Courtesy photos

Introduction

In an insurance coverage action currently pending in New York state court styled Century Indemnity v. The Archdiocese of N.Y., 2023 N.Y. Slip Op. 34420 (N.Y. Sup. Ct. 2023), the trial court granted the policyholders' motion to dismiss, holding, in part, that the Chubb insurers improperly had attempted to shift the burden of proof as to whether the policyholders "expected or intended" the sexual abuse alleged in more than 1,000 underlying Child Victims Act suits to the policyholder. Earlier this year, the Appellate Division, First Department largely reinstated Chubb's complaint without addressing the "expected or intended" defense. Century Indemnity v. The Archdiocese of New York, 226 A.D.3d 557 (1st Dep't 2024). 

In another recent case involving environmental damages, Century Indemnity v. Brooklyn Union Gas, 75 Misc. 3d 1205, 2022 N.Y. Slip Op. 50388, 166 N.Y.S.3d 845 (N.Y. Sup. Ct. 2022), Chubb argued, unsuccessfully, that the standard for whether certain damage was "expected or intended" by a policyholder was whether there had been a "substantial probability of damage." 

New York law unequivocally places the burden of proving the enforceability of coverage exclusions or limitations on the insurer. Moreover, New York law is clear that more foreseeability of harm is insufficient to demonstrate that the harm was expected or intended. Thus, permitting insurers to avoid coverage in sexual abuse cases or other third-party liability cases wherever there was a "substantial probability of damage" would turn bedrock insurance jurisprudence on its head.