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Lloyd’s of London syndicates managed by Beazley PLC on Monday sued the Roman Catholic Archdiocese of Indianapolis seeking to rescind sexual misconduct excess liability coverage it had issued to the church.
According to the lawsuit, Certain Underwriters at Lloyd’s, London, Syndicates 2623 and 623 v. The Roman Catholic Church of the Archdiocese of Indianapolis, filed in federal court in Indianapolis, the archdiocese failed to disclose sex abuse allegations against one of its priests when it renewed its coverage last year.
The case concerns David Marcotte, a priest within the archdiocese, who faces allegations he sexually abused a child.
According to court papers, in February 2019 the victim’s father told a church official that he intended to sue the archdiocese; another parishioner reported additional allegations of sexual misconduct; and the priest was removed from his duties.
The priest was arrested in October and the victim’s father sued a parish school and the archdiocese in February 2020, court papers say.
The excess sexual misconduct policy, which provided $5 million in limits, was issued on July 1, 2019. The excess coverage attached above a $4 million primary policy issued by a surplus lines unit of Munich Reinsurance Co. and a $1 million self-insured retention, according to the suit.
In completing the policy renewal application, the archdiocese answered “no” to the question “Is the applicant aware of any facts, circumstances, or allegations that may result in claims being made against you?”
In addition, the archdiocese answered “no” when asked whether any employee had been involved in an allegation or claim of sexual abuse and whether any employee had been suspended or transferred due to sex abuse suspicions or complaints, court papers say.
The alleged misrepresentations in the renewal application “were material because if the Archdiocese had disclosed the allegations against Marcotte and its removal of Marcotte from ministry in the Application, Underwriters would not have issued the Policy or would have issued the Policy on different terms,” the suit states.
In response to a request for comment, the archdiocese said in an emailed statement: “The lawsuit has yet to be served upon the Archdiocese. Therefore, we cannot respond until we have the opportunity to thoroughly examine the lawsuit.”