The Arkansas Supreme Court has held that CGL insurers had no duty to defend or indemnity an insured apartment complex for claims arising out of the alleged sexual abuse of residents.Kolbek v. Truck Ins. Exchange, 2014 Ark. 108, 2014 WL 1096168 (Mar. 13, 2014). 

An apartment complex was sued by residents who allegedly sustained abuse. The residents were part of a communal religious group led by an officer of the insured. The insured and the officer sought a defense from the insured’s insurers, which denied coverage and commenced a declaratory judgment action. The trial court concluded that the policies did not provide coverage on multiple grounds and granted summary judgment to the insurers. The insured and the underlying plaintiffs appealed. 

The Arkansas Supreme Court affirmed. It held that the allegations against the insured pre-dated coverage and therefore were not covered. The Supreme Court concluded that the officer was not an insured because, thought he was an officer, he was not acting as an officer when he allegedly harmed the residents. The Supreme Court also concluded that coverage for the alleged harm was excluded as expected or intended bodily injury. It finally held coverage was not available because there was no allegation or evidence that the alleged bodily injury arose out of the ownership, maintenance or use of a scheduled premises.