The Hartford to pay claims

Financial group agrees to cover $650 million in personal injury damages created by scandal

The Hartford Financial Services Group Inc. announced Friday it will pay $650 million as part of a settlement agreement with the national organization of the Boy Scouts of America for sexual abuse claims associated with policies mostly issued in the 1970s.

“We are deeply sympathetic to the victims of childhood sexual abuse and the enduring trauma they suffer,” said Matthew Sturdevant, a spokesman for The Hartford. “Our agreement with BSA is an encouraging step towards a global resolution that will promote the BSA’s efforts to equitably compensate survivors.”

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.

As part of the agreement, the Boy Scouts of America will release The Hartford from any obligation under policies it issued to the organization and its local councils.

The agreement is in connection with the Boy Scout’s Chapter 11 bankruptcy and will be effective on certain conditions, including confirmation of the the group’s global resolution plan, releases from local councils and approval from bankruptcy court and those who were abused.

The Boy Scouts, based in Irving, Texas, sought bankruptcy protection in February 2020 in an effort to halt hundreds of lawsuits and create a compensation fund for men who were molested as youngsters decades ago by scoutmasters or other leaders.

The BSA’s previous plan for a global resolution of more than 80,000 sexual abuse claims called for a $300 million contribution by local councils to a victims trust, about $115 million in cash and noninsurance assets from the BSA, and the assignment of BSA and local council insurance policies. In return, the BSA, its 253 local councils and hundreds of sponsoring organizations such as churches and civic groups would be released from further liability.

The new plan increased the contribution from local councils to $425 million but keeps the national organization’s contribution at $115 million. More than half that amount consists of the estimated value of the BSA’s art collection, including several NormanRockwell paintings.

Hundreds of abuse lawsuits have been filed against the BSA and local councils nationwide, but they’ve been put on hold since the BSA sought bankruptcy protection.

The Hartford and Boy Scouts of America hope to receive court approval in the third quarter, but it could be delayed procedural reasons, The Hartford said.

The Hartford set aside $225 million in the first quarter, partly for a charge to increase reserves for the Boy Scouts of America settlement that exceeds an amount previously reserved.