The $45 million listed as assets by the Archdiocese of St. Paul and Minneapolis does not count a critical but invisible “asset” still being determined — the value of its insurance.

Dusty policies stored in church archives and basements have played a huge role in clergy abuse settlements nationally. Insurance covered two-thirds of the $75 million archdiocese bankruptcy settlement in Portland, Ore., for example, and $19 million of the $37 million bankruptcy settlement in Davenport, Iowa.

With the stakes so high, coverage also is fiercely contested, as evidenced by the archdiocese’s lawsuit against 20-some insurers to try to force them to cover their liabilities for clergy abuse claims.

As the archdiocese and its creditors enter their third week of bankruptcy court mediation, attorneys for the insurance companies are the biggest group entering the doors of the federal courthouse in Minneapolis.

“Most people don’t appreciate the role that insurance has played in helping the church address clergy sex abuse,” said Tim Lytton, a professor at the Albany Law School in New York.

Insurance has paid out millions of dollars to victims, ranging from roughly 20 percent to 85 percent of total settlements, attorneys say.

Insurance companies also have been the driving force behind the church’s reforms to protect children, said Lytton, who said the insurers have required dioceses to put child protection policies in place to limit their own liability. The policies include employee background checks and the Virtus safe environment training used in the Twin Cities archdiocese and elsewhere.

“Insofar as the church has reformed, it’s largely informed by liability insurance companies,” argued Lytton, author of “Holding Bishops Accountable: How Lawsuits Helped the Catholic Church Confront Clergy Sexual Abuse.”

The search

Simply locating insurance policies has been the starting point — and the challenge — for religious institutions. Some dioceses, such as those in Davenport and in Gallup, N.M., have gone so far as to hire “insurance archaeologists” to dig up policies that can go back more than a half-century. It’s important, because many if not most of the abuse claims go back decades.

The old policies in St. Paul were located in the archdiocese’s archives, chancery files and attorney’s offices, said Lauren Lonergan, the attorney representing the archdiocese on insurance matters.

The archdiocese lawsuit against its insurers, now referred to bankruptcy court, names dozens of policies held with the who’s who of the insurance industry, such as Lloyd’s of London, Aetna and Colonial Penn. The policies, dating to 1952, differ on coverage periods, amount of coverage, exclusions, definition of “bodily harm” and more.

The older policies provided general liability coverage: Claims for negligent hiring or supervision based on alleged clergy abuse would be handled the same way as a claim from someone who slipped on the ice, said Wendy Voss, a Delaware attorney who has represented religious organizations in clergy abuse lawsuits.

The advantage of the older policies was that they rarely excluded sexual abuse claims and would cover a claim regardless of when it was made, she said.

“It doesn’t matter if the event happened in 1956,” Voss said. “They continue on.”

Newer policies: a Catch-22

The newer policies, say, from after the 1970s, typically covered only incidents that occurred during their calendar year, she said. But they had higher coverage limits.

“Today you might buy a policy for $2 million per incident and $5 million in the aggregate,” Voss said. “You wouldn’t have that kind of policy 30, 40 years ago.”

After the explosion of clergy sex-abuse filings in the 1980s, insurance companies began adding exclusions or stopped providing coverage altogether for clergy sex abuse, she said. Abuse claims could be denied, for example, if the abuse was not an “accident” or was a foreseeable occurrence as defined in the terms of the policy.

Church leaders found themselves in a Catch-22. They had to argue the abuse was not foreseeable, even as lawsuits claimed that victims had been abused by priests with previous histories of abuse.

“Different insurers have made different arguments,” said Bob Hartwig, president of the Insurance Information Institute in New York. “Some may have decided to just settle because of the cost associated with protracted litigation. Others may fight it to a jury trial, but that brings uncertainties.”

Religious organizations began self-insuring, or joining mutual groups, as clergy abuse lawsuits poured in during the late 1980s. Since 1990, the Catholic Mutual Group based in Nebraska has provided insurance coverage for the Twin Cities archdiocese, and only for claims that have taken place since then, Lonergan said.

Insurance policies are extremely important, she said. “The archdiocese is looking for ways to fund claims for victims and survivors,” she said. “Insurance provides a significant source of those funds.”

How significant? Jim Stang, a California bankruptcy attorney whose law firm has represented creditors’ committees for nine religious organizations — including dioceses in Davenport, Spokane, Wash., and San Diego — said insurance coverage has ranged from roughly 20 percent to more than 85 percent of settlements.

“I’ve seen it run as high as more than 70 percent in the Jesuits’ case,” said Stang, referring to a $168 million settlement reached by the Society of Jesus in Oregon. “In Helena [Mont.], it paid about $15 million of the $17 million. It can go as low as 30 percent, such as the Diocese of Fairbanks.”

Key questions

In the months ahead, attorneys for the Twin Cities archdiocese, the abuse victims and the insurance companies will be scouring policies to determine: Was there a per-incident coverage limit? What was the aggregate limit? Who is covered? (Only parish priests? Clergy from religious orders?) When exactly did the abuse occur?

“Most policies run on non-calendar years, June to June,” said Stang. “The first half of the year could be one insurance policy, the second half of the year, another. That’s why when the abuse occurred becomes very important.”

Another question: If an abuse survivor was repeatedly assaulted, how many claims is that?

“If Father Smith abused John five times a year for two years, was it 10 claims?” asked Stang. “Or one? Or two?”

As bankruptcy proceedings move forward, the archdiocese may be in a better position than other religious institutions facing clergy abuse claims.

Jeff Anderson, the St. Paul attorney representing the majority of abuse victims, said the archdiocese has “much more insurance” than other religious groups he has grappled with.

“They have layers of insurance with overlapping time limits, many carriers, over many policy periods,” he said. “They just have a lot of insurance.”