Progressive Insurance is refusing to cover a Maryland daycare facing serious child sexual abuse claims. The company says its commercial auto policies were never meant to protect businesses from such harm.
On November 24, Progressive asked a federal court in Maryland to end its relationship with Lil Kidz Kastle Day Care Center. This request comes amid three lawsuits accusing a longtime employee of sexually abusing children at the daycare’s Owings Mills location. The insurer’s policies in question cover the period from September 2018 to September 2022, but Progressive insists those policies don’t apply here.
The employee at the center of this case is James Weems. He worked at the daycare for more than ten years and was convicted last November by a Baltimore County jury on several charges. These include second-degree rape and sexual abuse of a minor. Some of the abuse reportedly took place inside a white van used by the daycare to transport children.
Progressive argues that Weems is not covered under their policies. Their coverage applies only to people using the vehicles with permission from the daycare. They say sexual abuse does not count as a legitimate use. Courts in Maryland have also ruled that employees’ criminal actions are outside the scope of their employment, backing this view.
The insurer also points out that sexual abuse can’t be seen as an accident under their policies. They define an accident as something sudden, unexpected, and unintended that causes injury. Since sexual abuse is intentional, it doesn’t fit this definition—even if the lawsuits describe some claims as negligence.
Although the daycare is also accused of negligent hiring and supervision, Progressive says courts won’t allow the abuse to be treated as an accident just to gain coverage. The company noted cases where, despite allegations of negligence, the real cause of harm is intentional abuse.
Another issue for Progressive is whether the injuries even came from the use of the vehicle. While some abuse occurred inside the daycare’s van, the company claims the van was just one of several places where abuse happened. They argue there’s no direct connection between the injuries and the vehicle itself.
Progressive also cited a policy clause called the Expected or Intended Injury Exclusion. This rule excludes coverage for injuries that were expected or caused intentionally by an insured person. It applies to all covered parties, even though the policies treat each insured individual separately.
Additionally, Progressive noted their policies clearly exclude punitive damages. The court has yet to make a final decision on the case.
As this legal battle unfolds, it raises tough questions about the limits of insurance coverage in cases involving intentional harm, especially in sensitive places like daycares.