While children abused in council homes have had payments of up to pounds 150,000, those who were abused by senior staff or owners in the private sector may miss out because of the interpretation of small print in insurance polices.
One insurance company has told lawyers that where an owner was involved in abuse constituting a criminal act by the insured, it rendered the policy void. Another says it has been given legal advice that its policies do not cover claims involving abuse.
Lawyers acting for children in care who were abused are furious and have accused insurance companies of trying to avoid paying out.
"It is a despicable act by insurance companies who are using their powers to beat people who have been abused for years and who society should be protecting. It is a try-on by companies who are worried about the number of claims coming through and who know it is going to be very expensive," said Peter Garsden, a solicitor who represents former residents of homes and schools in the North-west.
Norwich Union has told lawyers acting for clients seeking compensation for abuse at one school in West Kirby that the policies do not provide indemnity for the claims. A spokesman said yesterday,"Physical and sexual abuse is a deliberate act and therefore insurance doesn't cover it. Insurance only covers accidents."Reuse content