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The Ohio Supreme Court ruled that an abuse and molestation exclusion barred coverage for damages based on the insured entity’s vicarious liability and that its application was not limited to damages arising directly from its employee’s abuse of a minor.  World Harvest Church v. Grange Mutual Cas. Co., 2016 WL 2754889 (Ohio May 12, 2016).

In an underlying abuse suit, a church and its employee were found liable for assault and battery, negligence, and intentional infliction of emotional distress, among other claims.  Grange, the church’s general liability insurer, refused to indemnify based on an exclusion that precluded coverage for the “actual or threatened abuse or molestation by anyone of any person while in the care, custody or control of any insured.”  The church argued that the exclusion barred coverage only for damages arising from an insured’s direct liability for abuse, and did not extend to damages based on vicarious liability.  The Ohio Supreme Court disagreed and ruled in the insurer’s favor.  The court reasoned that the abuse exclusion was broadly worded, and did not contain any language limiting its application to damages based on an insured’s direct liability. 

The court also ruled that post-judgment interest is based only on the portion of the judgment that reflects covered injury, not the entire underlying judgment.  Because the underlying suit did not allege any covered injuries, the court held that Grange was not obligated to pay any post-judgment interest.