Hunton Insurance Recovery Blog

A self-insured retention is a dollar amount specified in the insurance policy that an insured must pay toward a claim before insurance coverage begins to apply to pay for remaining covered amounts. While ordinarily straightforward, insurers may sometimes argue otherwise. In a recent summary judgment ruling in The Archdiocese of New York, et al. v. Century Indem. Company, et al., No. 652825/2023 (N.Y. Sup. Ct. Sept. 8, 2025), based on the plain language of the insurance policies, a New York state trial court rejected an insurer attempt to treat a self-insured retention as reducing the amount covered under the policies. 

Background

The Archdiocese of New York and its associated policyholders purchased general and excess liability insurance policies from the defendant insurers between 1956 and 2003. New York enacted the Child Victims Act and Adult Survivors Act in 2019 and 2022, respectively, which provided a revival period to civil lawsuits that otherwise would have been time barred. After these statutes were enacted, approximately 1,700 lawsuits were filed against the Archdiocese alleging sexual abuse by the clergy and employees, during the periods the defendant insurers’ policies were in effect. In the insurance coverage lawsuit, the Archdiocese and certain insurers sought declaratory judgments concerning the scope of coverage under the policies for the claims. 

In its motion for summary judgment, the Archdiocese argued that under one of the policies at issue, the insurer was required to pay the full policy limits of $200,000 per covered occurrence, in excess of a $100,000 per occurrence retention, with the retention not reducing the policy limits. The insurer argued in response that the $100,000 per occurrence retention reduced the policy limits, and thus the insurer was responsible for paying only up to $100,000 per occurrence.

Summary Judgment Ruling

The insurance policies included several sublimits depending on the type of loss, and the parties agreed that the applicable sublimit for the alleged conduct was $200,000 per occurrence. Relying on the well-settled principle that insurance polices should be interpreted to give effect to the intention of the parties as shown by the policy language, the court granted summary judgment for the Archdiocese. The court found that the plain language of the policies provide that sublimits are not reduced by the self-insured retention. This finding was based on the following:

1. Other courts have interpreted a self-insured retention as the amount an insured pays before insurance begins to apply, rather than a deductible reducing the coverage amount.
2. The policies use the phrase “excess over $100,000” when discussing the policy limits, which is consistent with the common application of a self-insured retention.
3. Interpreting sublimits as inclusive of the self-insured retention would render excess coverage non-existent for several categories of losses listed in the policies, because the sublimit was less than $100,000, which would be inconsistent with an insured’s expectations.
4. The policies were clear and unambiguous; thus, the court could not rely on extrinsic evidence.

Key Takeaway

This case underscores the importance of reviewing policy terms when obtaining insurance and presenting claims. Distinctions as a self-insured retention or a deductible can have a significant effect on available coverage. If the policies here had provided for a $100,000 deductible rather than self-insured retention, coverage for the claims may have been significantly reduced. In addition to thoroughly understanding the policy terms at inception, policyholders must remain vigilant when claims arise. Even where the terms are clear, insurers may take unsupportable positions in an effort to limit coverage.