2024 Insurance Carrier Benchmarking: Sexual Abuse & Molestation Liability

In recent years, consumer serving organizations and insurance companies have been experiencing the impacts of a hardening insurance market, resulting in more limited availability and options for Sexual Abuse or Molestation Liability (SML) coverage for industries serving vulnerable populations.  In September 2022, Praesidium distributed our inaugural insurance carrier benchmarking survey to understand the carrier perspective on the coverage options they were offering as well as what they were projecting into the future, both for their own products and services as well as the market at large. To continue this important conversation, we released our second carrier survey in October 2024. We also expanded our data collection this year by introducing surveys for consumer serving organizations. This initiative gathered comprehensive data and provided valuable insights into trends that affect organizations serving vulnerable populations.

Below are some key highlights from our 2024 Insurance Carrier Benchmarking report, and you can download the full report here. For additional discussion, watch our webinar where Meredith Bunnel goes in-depth on the report findings.

2024 Report Highlights

Carrier & Coverage Characteristics

Increased response rates in 2024 further diversified the pool of respondents and the sectors in which they offer SML coverage. For example, 38% of 2024 respondents offer SML coverage in Healthcare, compared to only 14% in 2022. Similarly, 63% provide SML coverage in schools, compared to only 50% in 2022.

Approximately three-quarters of respondents are writing SML coverage in the US, with the remaining 25% offering SML products in Canada and Australia.

Regarding their current SML offerings:

• 88% of carriers offer SML coverage within their Primary policy limits, and only 13% offer SML coverage up into their Excess policy limits.
• 41% of carriers are offering a standalone SML product (up from 33% in 2022), while 35% offer SML coverage as part of their Commercial General Liability (CGL) packages.
• 71% offer $5M or less in limits and only 12% offer $10M or more. 18% offer only up to $1M. 50% of carriers include defense costs within their policy limits for all policies, and 31% include defense costs for some policies.

Expectations for Insureds

• 94% of responding carriers in 2024 (compared to 82% in 2022) report they have defined underwriting requirements addressing the abuse prevention risk control practices that insureds must have in place in order to obtain SML coverage.

The biggest shift in underwriting expectations between 2022 and 2024 was in the area of Monitoring & Supervision, which carriers ranked 1st as the most important risk control policy and practice area related to abuse prevention. In 2024, 88% of respondents reported their underwriters have defined requirements addressing how an organization monitors and supervises high-risk situations in order to be eligible to obtain SML coverage, up from 67% in 2022. The report includes more details on specific underwriting requirements.

Anticipated Trends

In the 2024 survey, we asked responding carriers to look ahead to the next 3 years and share what they anticipate for their own offerings and underwriting requirements, as well as what they project for the broader insurance market.

We asked carriers whether they expect their company to decline to write SML coverage, at any level, for any industries in the next three years. 38% of respondents forecasted no change in the industries for which they would be willing to provide SML coverage. Among the remaining respondents:

• 38% expect to decline to write SML coverage in Childcare
• 25% expect to decline to write in each of the following: Day Camps, Foster Care, Overnight Camps, and Youth Sports
• 13% expect to decline to write in each of the following: Faith-Based Organizations, Healthcare, Hospitality/Leisure, Nonprofits, Schools, Senior Living/Long-Term Care, and Youth Development

Regarding expected trends in the market more broadly, not just within their own offerings:

• 59% expect the market will harden, 6% expect it will remain the same, and 24% expect the market may open up (compared to 0% in 2022!).
• 65% expect that offered SML limits will decrease, while 18% expect limits will increase, and the remaining 18% of respondents expect no change.

We asked carriers what they anticipate in relation to specific underwriting requirements, and 71% project that underwriting requirements will continue to increase, which may result in things like: (examples taken directly from carrier response commentary)

• Greater scrutiny on larger, more complex risks
• Higher standards, higher frequency of checks and training
• Planning to require more proof of policies and procedures in advance of offering excess limits on some risks, and prior to offering any limits on higher hazard exposures
• We will likely begin attaching exclusions to healthcare accounts

Finally, we asked carriers if an outside expert publicly accredited an organization as meeting or exceeding best practices in abuse prevention, would that status positively impact their ability to access SML coverage?

94% said yes.

We asked those carriers how so, and 53% shared they would be more likely to offer a lower premium, 60% would be more likely to offer higher limits, and 93% shared that accreditation would make them more likely to consider offering any SML coverage.

Looking Ahead

By expanding our survey efforts this year to also include responses from consumer-serving organizations about how the insurance purchasing process and hardening market has impacted their ability to serve, we were able to identify additional key learnings and opportunities for partnership among insurance professionals and the organizations they represent or insure. Check out the full 2024 Benchmarking Report for more in-depth discussion regarding:

• The consumer-serving perspective of the current SML market and associated service impacts;
• Opportunities to partner in goal- and resource-sharing for enhanced abuse-prevention practices;
• Third-party accreditation and its impact on carrier decision-making and the accredited organization’s insurance purchasing power.

As industry best practice standards for abuse prevention policies and practices continue to evolve, so do the related insurance underwriting requirements and product offerings. Carriers & agencies will need to continue to deepen their understanding of organizational abuse-prevention efforts, while consumer-serving organizations need to consider how they can best share their safety story to powerfully communicate the value and efficacy of their abuse prevention culture.

We look forward to continuing our benchmarking efforts and thank all participating respondents for contributing to this most recent survey round. Prevention is possible, and these insights are invaluable as we continue to unpack and understand how best to serve consumers, safely.