Liberty Mutual settles diocese’s sex abuse coverage dispute

Liberty Mutual Insurance Co. has agreed to pay the Diocese of Duluth, Minnesota, $6.5 million to settle litigation over insurance coverage for child sexual abuse claims.

A hearing on the settlement is scheduled for March 7 before the U.S. Bankruptcy Court in Minneapolis, according to court papers filed Feb. 5 In re: Diocese of Duluth, Debtor-in-Possession.

 The diocese filed for bankruptcy in December 2015.  According to the court filing, “Over the last several decades, some clergy members in the Diocese have violated the sacred trust placed in them by children, their families and the Diocese by committing acts of sexual abuse.

“The Diocese filed its chapter 11 bankruptcy case in an effort to compensate, as fairly and equitable(cq) as possible, all survivors of such abuse.”

Coverage litigation filed by the diocese against Liberty Mutual, Diocese of Duluth v. Liberty Mutual Group et al., which was initially filed in bankruptcy court was transferred to the in U.S. District Court in St. Paul, where it is now pending.

Another insurer settled with the diocese in 2017.