BOSTON -- For Kay Johnson and the kids she tries to help, the letter that rolled out of the fax machine brought some depressing news.
Johnson's western Massachusetts Big Brothers Big Sisters agency has never been hit with a claim of child sexual abuse. Yet the organization's cost for insurance to cover such claims has more than tripled in the past year, forcing Johnson to think about cutting some staff members and dropping some youngsters from the program.
"I got this fax. There was this huge number on it. It was definitely a shock," said Johnson, executive director of Big Brothers Big Sisters of Franklin County.
Across the country, insurance costs are rising for youth organizations, partly because of the sex scandal that has engulfed the Roman Catholic Church, according to agency officials and the insurance industry.
Insurance companies have been forced to pay out some big sums in recent years for sex abuse claims. Now insurers are raising rates to protect themselves against the cost of future claims, said Robert Hartwig, chief economist for the industry's Insurance Information Institute. Even if the sex allegations prove to be unfounded, he noted, insurers can end up spending thousands, even millions, to defend an organization.
"Given the rapid escalation in losses we've seen in recent years, rates need to move upward in order for insurers to be able to cover expected future losses," Hartwig said.
While the institute does not specifically track premium costs for organizations that serve youngsters, Hartwig said liability policies offering the most protection against litigation have gone up 30 percent to 40 percent in each of the past two years.
John Medler, chief executive of YMCA Services Corp., a for-profit subsidiary that provides insurance for about half the nation's 975 YMCAs, said some insurers have simply stopped offering coverage to groups that work with young people. Others have raised prices and required agencies to tighten procedures to protect children.
"The pricing in the last two to three years has literally tripled, with half the coverage," he said.
A typical YMCA that might have paid $5,000 for $2 million in coverage two years ago is now paying $15,000 for $1 million in coverage, Medler said.
The Boston Archdiocese agreed last year to pay $85 million to settle more than 500 lawsuits by people who said they were molested by priests. It was the largest known payout by a U.S. diocese to settle molestation claims. Hundreds of other settlements across the country in recent years have added up to hundreds of millions of dollars.
Boston church officials and insurance companies are still wrangling over how much of the settlement insurance companies will pay. The Rev. Christopher Coyne, a spokesman for the archdiocese, said its liability insurance premiums went up 35 percent last year. He said the increase was only partly attributable to the church's youth programs, and much of the rise was related to the archdiocese's work in nursing homes.
Summer camps have also seen higher insurance costs, said Bette Bussel, executive director of the American Camping Association of New England. The region's camps reported increases in their insurance costs ranging from 30 percent to 200 percent last year.
Mack Koonce, executive vice president and chief operating officer of Big Brothers Big Sisters of America, estimated that its 470 affiliates nationwide have seen two consecutive years of average increases of 30 percent in their liability coverage costs.
At Franklin County Big Brothers Big Sisters, Kay Johnson said she may be able to avoid laying off a part-time worker and dropping 25 youngsters by pressing for more donations.
But "it's pretty difficult to go to a donor and say, 'Oh, we need your money so we can spend it on insurance,'" she said. "Who wants to donate money for you to spend it on insurance?"