Chubb Unit Ordered to Defend California Diocese in Abuse Cases

A Chubb Ltd. unit must cover defense costs for a Southern California diocese in underlying suits alleging childhood sexual abuse.

Westchester Fire Insurance Co. needs to “drop down” and cover the Diocese of Orange’s legal defense costs after its primary insurer became insolvent, the US District Court for the Central District of California ruled Monday. The insurer sued the diocese in July 2024, seeking the court’s judgment on its duty to defend the claims.

Chubb units and other insurers have been involved in similar clashes with Catholic dioceses across the country aiming to avoid legal costs for sexual abuse claims.

Dioceses faced an onslaught of litigation following the passage of “reviver” statutes such the California Child Victims Act, which voided the statute of limitations for childhood sexual abuse claims. The Diocese of Orange has been named in a defendant in more than 200 suits brought under California’s law, according to the ruling.

A predecessor to Westchester insured the diocese under a series of commercial umbrella policies from 1981 to 1984. The Chubb unit argued its excess coverage could be triggered only if the diocese’s primary policies—offering as much as $500,000 per covered occurrence—were exhausted.

The dispute hinged on whether the underlying abuse claims count as covered occurrences under the primary and excess policies. Westchester argued the primary insurer was on the hook because at least some of the claims meet the primary policy’s definition of “occurrence” as an alleged accident causing physical injuries.

But the court sided with the diocese, ruling that Westchester’s excess policy may be triggered because it offers to pay for judgments dealing with a wider array of harm outside the scope of the primary policy, including for events causing “shock, mental anguish and mental injury.”

The claims asserted in the underlying lawsuits alleged that survivors experienced mental anguish as a result of sexual assault by priests and clergy who served the diocese and some of its affiliates in leadership roles. Those alleged events fall under the excess umbrella policies, the court ruled, and weren’t considered accidents causing only physical injury.

Westchester failed to explain how the underlying allegations of emotional or mental injury caused by assault wouldn’t satisfy the umbrella policies’ definition of “occurrence,” Judge Mónica Ramírez Almadani wrote for the court, partially granting the diocese’s motion for summary judgment.

Westchester also said the alleged underlying injuries should be classified as harms resulting from a single occurrence—the diocese’s purported negligence—and therefore covered under the primary insurance policies, but that argument ignores the text of both respective policies, the judge said. The Chubb unit has a duty to defend the diocese against the sexual abuse allegations under its umbrella policies, she concluded.

The diocese and Westchester in December 2024 paused several other claims, limiting the latest ruling to whether the insurer has a duty to “drop down” and defend the diocese following the primary carrier’s insolvency.

A Chubb spokesperson didn’t immediately provide comment. The Diocese of Orange declined to comment.

Clyde & Co and O’Melveny & Myers LLP represent Westchester. Lathrop GPM LLP and Theodora Oringher PC represent the diocese.

The case is Westchester Fire Ins. Co. v. Roman Catholic Bishop of Orange, C.D. Cal., No. 8:24-cv-01539, 6/1/26.