By Jon Hilkevitch.

December 24, 1993

Henry Goldenberg, a fine English gentleman, husband and father, recently received a rather startling form letter from his insurance company that he has dubbed "the Michael Jackson clause."

In an endorsement to policyholders, the Los Angeles-based Farmers Insurance Group Cos. issued what most people would consider an unnecessary warning: Homeowners and personal-liability policies do not cover acts of molestation or any other abuse of children.

"They're sending out this exclusion to everybody, not just me," said Goldenberg, a Londoner who spends part of the winter with his wife at the couple's vacation home in the California desert. "At least I hope so."

Indeed, Farmers Insurance is not alone in the battle. Locally, Bloomington-based State Farm Insurance Co. and Allstate Insurance Co. in Northbrook have aggressively contested suits involving sexual deviants seeking coverage.

"It's a sign of the times, I'm afraid," said State Farm spokesman Bill Sirola. "We are facing such litigation every day involving instances that we could not even have dreamed about a decade ago."

John Millen, a spokesman for Farmers Insurance, commented: "It's outrageous that we even have to issue a statement that individuals will not be covered for committing heinous crimes against others, but that's where we are in society today."

Accompanying the Farmers endorsement, titled "Child Molestation Exclusion," the company explained in a letter that some claimants have recently been trying to find coverage for child-molestation suits under their policies.

"In order to emphasize the intent of your policy, the endorsement on the other side specifically excludes injuries and medical expenses arising from actual, alleged or threatened child molestation," the letter said.

In a period when trusted members of society, ranging from priests and teachers to role models such as sports stars and entertainers like the embattled Michael Jackson, are being accused with alarming regularity of sexual misconduct, the insurance industry apparently also feels an urgent need to protect itself financially.

"It seems entirely wise, though I haven't heard of such a dilemma back home in England," commented Goldenberg, who admits to a fascination with American culture. "I guess they don't want to make fashionable this business of paying out huge sums of money to child molesters."

Ronald Gass of the American Insurance Association said the problem is that the typical homeowners policy is not worded in such a way that would exclude all crimes imaginable.

"And if you (the insurance company) don't say it specifically, the courts are probably going to rule that there is coverage," said Gass, assistant general counsel for the Washington, D.C.-based association.

Gass said insurers such as Farmers, in some cases after suffering staggering payouts in child-molestation suits, are fine-tuning the terms of their policies.

"It's still a new trend, although it parallels the issue of child molestation in the press," he said.

"The general public may not yet be aware of it, but there have been a lot of child-molestation court cases brought under homeowners coverage for third-party liability in the last year and a half. An example would be a child molested while in the care of a baby-sitter in the sitter's home, and the parents sue under the baby-sitter's homeowners policy," Gass said.

Insurance experts say most homeowners policies exclude only intentional acts from coverage, which has left several insurance companies on the losing end of some especially egregious cases of sexual assault in which the abuser claimed he or she didn't intend to harm the victims.

In Missouri, Robert Berdella was convicted or pleaded guilty to the sexual torture and slayings of six young men at his Kansas City home in the 1980s. A conviction on a first-degree murder charge requires proof of the intent to harm. Berdella's homeowners policy excluded coverage for acts expected or intended to result in harm or serious bodily injury, so the families of those victims have to date been unable to collect from Berdella's insurer.

However, in the cases in which Berdella was convicted of manslaughter, in which intent need not be shown, the victims' survivors were able to seek compensation from Berdella's insurer.

The cases are still in the courts and no money has been paid out, but in one case a $5 billion judgment was returned against Berdella and his estate, said Kristine Focht, an associate with Watson, Ess, Marshall and Enggas, a Kansas City law firm representing the insurance company, Economy Fire and Casualty Co.

"No money has yet been exchanged on the cases where (insurance) coverage is being contested, but it's ludicrous that you'd have to go to this length," Focht said.

"It would seem it's only common sense that the kind of things Mr. Berdella did-sexually torturing his victims and injecting them with drugs, tying plastic bags over their heads and watching them die-would not be insurable actions."

Focht said it is at least somewhat comforting to note that some courts have ruled that regardless of whether there is exclusion from insurance in child-molestation cases, "the judges have said the acts are so abhorrent that we just won't grant coverage."