In Cumberland County Guidance Center ( CCGC) v. Scottsdale Ins. Co. , CCGC sought coverage for allegations of its employees failure to report alleged sexual abuse under a claims made professional liability policy and an occurrence commercial general liability policy, both issued by Scottsdale. The trial court found coverage under the PL policy, and no coverage under the CGL policy. Appeals followed.

The Appellate Division affirmed no coverage under the CGL policy, reversed the finding of coverage  under the PL policy and found that Scottsdale had no duty to defend. The panel rejected the argument that the failure to report sexual abuse was a continuing tort in an attempt to bring the claim within the policy’s retroactive period. It found that the policy clearly stated that there was no coverage for any wrongful act or omission that was committed before the retroactive period.

Additionally, the panel held that the failure to report alleged sexual abuse arose out of the rendering or failure to render professional services , finding a substantial nexus between the context in which the acts were complained of occurred and the professional services performed.

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http://www.judiciary.state.nj.us/opinions/a4591-08a4817-08.pdf