Arch Insurance Seeks Correction in Varsity Brands’ Policy Amid Abuse Litigation

Varsity Brands’ insurance company has asked a federal judge to correct what it says was a ‘mistakenly truncated’ policy that could end up costing it millions in light of the spate of sex-abuse litigation filed against the cheerleading giant.

Last month, Arch Insurance filed a ‘reformation action’ in U.S. District Court, seeking a judgment that would modify Varsity’s 2018-19 commercial general liability coverage to include the same ‘abuse & molestation’ limitations that were part of its previous and subsequent coverage.

Arch, according to its lawsuit, has provided general liability insurance to Varsity Brands since 2017, with a per-occurrence limit of $1 million and a general aggregate limit of $5 million. Varsity’s 2017-18 policy included a three-page endorsement for instances of abuse and molestation, with limits of $1 million for each ‘sexual abuse occurrence’ and $2 million for sexual abuse aggregate.