A New York appellate court on Tuesday reversed a ruling dismissing a dispute lodged by a number of Chubb Ltd. units against the Archdiocese of New York over coverage for more than 1,500 sexual abuse lawsuits.

The First Judicial Department of the New York Supreme Court, Appellate Division said in Century Indemnity Co. et al. v. The Archdiocese of New York et al. that the trial judge incorrectly found in favor of coverage because the alleged injuries were not expected or intended. The panel said the judge erred by focusing on the allegations in the lawsuits against the archdiocese rather than the insurers’ lawsuit.

“The court discounted the instant complaint’s allegations concerning the Archdiocese’s longstanding awareness of sexual abuse as ‘non-specific, common knowledge type allegations against the Catholic Church.’ The relevant inquiry is whether the Archdiocese’s actions fall within or without the operative policies,” the opinion says.

The Chubb units, led by Century Indemnity Co., said in their lawsuit they are not obligated to defend the archdiocese, St. Francis Xavier Church and others against sexual abuse lawsuits that were filed under the Child Victims Act of 2019 and the Adult Survivors Act of 2022. The statutes allowed survivors of sexual abuse to bring lawsuits that would have been time-barred.

The insurers contend coverage does not exist because the archdiocese knew about the alleged injuries, failed to cooperate with them and that the known loss doctrine applies. The insurers said 86% of the lawsuits would fall under primary and excess policies they issued to the archdiocese, parishes and associated schools between 1956 and 2003.

The archdiocese moved to dismiss the suit, arguing that the injuries alleged in the lawsuits were neither expected nor intended and that they were the result of negligence, which is covered under the policies.

The trial judge granted the motion in December.

Chubb said in a statement that the appeals court “rejected the ADNY’s arguments and the trail court’s decision.”

“On the most important issues at stake in this case, the higher court has found that Chubb has alleged sufficient grounds for the declaratory judgment to proceed: that the ADNY is not cooperating by providing information to assess claims and that insurance policies generally provide coverage for accidents, and do not cover liability for injuries that the insured expected or intended,” the company said.

Joseph Zwilling, the director of communication for the archdiocese, said the ruling was “disappointing” and “wrongly decided.”   

“To suggest, as the court does in today’s decision, that Chubb can avoid paying claims to victim-survivors of sexual abuse simply by claiming that the abuse was ‘expected or intended’ without offering any proof, opens the door to years of litigation and courtroom battles and closes the door on prompt and just resolution to meritorious claims,” he said. 

Mr. Zwilling said that while the “decision demands appeal,” the archdiocese “will consider and determine the best way to further policyholders’ and plaintiffs’ interests.”

The appeals court affirmed dismissal of the insurers’ claim that the known loss doctrine barred coverage for the suits.

A representative for the archdiocese said it does not comment on pending litigation.

The archdiocese did not respond to a request for comment.