Progressive is pushing back on covering a Maryland daycare embroiled in child sexual abuse allegations, arguing its commercial auto policies were never meant to protect businesses from employee predators.
The insurance giant filed papers on November 24 in federal court in Maryland seeking to cut ties with Lil Kidz Kastle Day Care Center and related defendants over three lawsuits alleging a longtime employee sexually abused children at the Owings Mills facility. The carrier insists its four commercial auto policies, spanning September 2018 through September 2022, simply do not apply to these claims.
At the heart of the dispute is James Weems, who worked at the daycare for over a decade and was convicted last November by a Baltimore County jury on charges including second-degree rape, sexual abuse of a minor, and display of obscene item to a minor. The abuse allegedly happened across multiple spots at the facility, including inside a white van used to ferry kids to and from school.
Progressive contends the case fails on multiple fronts. For starters, Weems does not qualify as an insured under the policies. The coverage extends to people using the vehicle within the scope of permission granted by the daycare, but the insurer maintains sexual abuse clearly falls outside any legitimate use. Maryland courts have long held that criminal conduct by employees sits outside the boundaries of their employment.
More fundamentally, Progressive argues sexual abuse cannot be considered an accident under the policies. The carrier defines accident as a sudden, unexpected and unintended event that causes bodily injury. Courts in Maryland have repeatedly ruled that sexual molestation is inherently intentional, making it impossible to squeeze under an accident definition no matter how the underlying lawsuits frame their negligence theories.
Even though the civil suits include claims of negligent hiring and supervision against the daycare and its owners, Progressive insists courts will not let plaintiffs repackage intentional abuse as negligence just to trigger coverage. The carrier cites cases showing that regardless of how many negligence angles appear in a complaint, the core injury still stems from intentional sexual abuse.
The insurer also challenges whether the abuse truly arose from the ownership, maintenance or use of a vehicle. While some abuse allegedly occurred inside the van, Progressive argues the vehicle was merely one location among several where abuse happened. The carrier contends there is no direct causal link between the van and the injuries, only an incidental connection.
Progressive further relies on its Expected or Intended Injury Exclusion, which bars coverage for bodily injury either expected by or caused intentionally by or at the direction of any insured. The carrier argues this creates a blanket exclusion for all parties covered under the policy when intentional acts occur, even though the policies contain a severability clause treating each insured separately.
The policies also explicitly exclude punitive damages. No final determination has been made in the case.
