Certain underwriters at Lloyd's of London and other London market insurers must pay their full applicable policy limits under policies issued to the Archdiocese of New York, a state court ruled Monday in the archdiocese's suit seeking coverage for thousands of sexual abuse claims.

Granting partial summary judgment to the archdiocese and its affiliated entities, Justice Lori S. Sattler held that the London market insurers must pay their "solvent shares" of the full policy limits of $200,000 per covered occurrence from May 1975 to May 1978 in excess of a $100,000 per occurrence retention. The insurers must also pay $300,000 per covered occurrence from May 1978 to September 1978 in excess of the retention.

The plain language of the combined property, casualty and crime policies issued to the archdiocese provides that the general liability sublimit is not reduced by the $100,000 retention, the judge found.

"The parties agree that the $100,000 payment is a 'self-insured retention', which courts have interpreted to be an amount that an insured covers before insurance coverage begins to apply rather than a deductible limiting the coverage amount," Justice Sattler said. "This is congruent with the language of the policies, which consistently use the phrase 'excess over $100,000,' indicating that LMI's liability is on top of the $100,000 retention rather than inclusive of it."

According to court filings, the archdiocese and its affiliated entities have been named in more than 1,700 lawsuits alleging sexual abuse by members of the clergy and other employees following New York's enactment of the Child Victims Act in 2019 and the Adult Survivors Act in 2022. The acts provided a revival period for individuals to bring claims of sexual abuse and extended the statute of limitations for such claims.

Units of Chubb, which insured the archdiocese under general and excess liability policies, kicked off the coverage dispute in June 2023. The archdiocese lodged its own counterclaims against Chubb and filed a third-party suit against a slew of other carriers, including the London market insurers, in June 2024.

The London market insurers insured the archdiocese between May 1975 and September 1978. The policies provided aggregate coverage, whereby the insurers would pay up to $500,000 in excess coverage so long as the archdiocese paid a certain amount in a given policy period, and specific excess coverage, whereby the insurers agreed to pay a specified amount on a per occurrence basis in excess of a $100,000 retention.

According to the ruling, the London market insurers insured 90% of the policy limits while a third party that is now insolvent insured the remaining 10% of the policy limits.

The judge on Monday rejected the London market insurers' contention that the policy language reflects an intent to reduce the sublimits by the retention, saying interpreting the sublimits as inclusive of the retention would render specific excess coverage inapplicable for most categories of losses.

"If the intent was to exclude those types of losses from the specific excess agreement, the policies would have explicitly done so," Justice Sattler said. "A contrary interpretation, that the parties must infer that specific excess coverage does not trigger for some types of losses even though the language plainly states that those limits 'apply for all purposes,' does not accord with the reasonable expectations of an insured party."

A representative of the archdiocese declined to comment. Representatives of the London market insurers and Chubb units did not immediately respond to requests for comment Monday.

The Archdiocese of New York and its affiliated entities are represented by James R. Murray, Jared Zola, Jeffrey L. Schulman, Robyn L. Michaelson, Dominique G. Khani, Stephen Wah, Amber N. Morris, James S. Carter and Omid Safa of Blank Rome LLP and by Fredric S. Newman and Bradley J. Nash of Hoguet Newman Regal & Kenney LLP.

The Chubb units are represented by Jonathan Rosenberg, Allen W. Burton, Daniel L. Cantor and Samuel B. Weiss of O'Melveny & Myers LLP and by John F. Baughman and Nathaniel E. Marmon of Baughman Kroup Bosse PLLC.

The London market insurers are represented by Michael J. Frimet and George Vogrin of DAC Beachcroft LLP.

The case is Archdiocese of New York et al. v. Century Indemnity Co. et al., case number 652825/2023, in the Supreme Court of the State of New York, County of New York.