The Hartford Increases Settlement By Millions Over Sex Abuse Claims

The Hartford will take a $137 million charge in the third quarter. That’s in addition to $225 million set aside in the first quarter, partly for a charge to increase reserves for the Boy Scouts of America settlement that exceeds an amount previously reserved.

The Hartford will pay $787 million, before taxes, for claims associated with policies mostly issued in the 1970s. In exchange, the Boy Scouts of America and its local councils will fully release The Hartford from any obligation under policies The Hartford issued to the organization and its local councils.

The Hartford announced on April 16 it entered into a $650 million settlement with the Boys Scouts of America. That settlement did not include the local councils or representatives of a majority of the claimants.

The agreement-in-principle was reached in connection with the Boy Scouts of America’s Chapter 11 bankruptcy and will become a final settlement on certain conditions, including a definitive settlement agreement, confirmation of the Boy Scouts of America’s global resolution plan and other factors.

The parties to the agreement-in-principle expect to receive court approval of the settlement later this year.

The Boy Scouts and local councils sued The Hartford in District Court in Dallas on June 5, 2018, saying that some sexual-abuse lawsuits were covered by insurance policies. The Hartford had denied its coverage obligations under the policies, including coverage for defense costs and indemnity payments associated with the lawsuits, the Boy Scouts of America said.

Under the policies, The Hartford agreed to cover sums that the Boy Scouts would be “obligated to pay as damages because of personal injury,” according to a civil lawsuit in federal court.

The Boy Scouts and its local councils were sued by youth participants for sexual abuse-related injuries during scouting programs. The victims said the Boy Scouts and local councils were negligent in failing to prevent the abuse and that some of these underlying sexual-abuse lawsuits are covered by insurance policies with The Hartford.

Stephen Singer can be reached at [email protected].

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