Public Policy Arguments Do Not Block Coverage For Sex Trafficking Claims

The Pennsylvania Supreme Court addressed certified questions from the Third Circuit concerning whether Pennsylvania public policy bars insurance coverage when an insured is alleged to have enabled or profited from sex trafficking. Samsung Fire & Marine Ins. Co., Ltd. v. RI Settlement Trust, et. al., J-65-2025 (Pa. Jul. 21, 2026).

The case arose from civil suits alleging that minor plaintiffs were victims of sex trafficking at various hotels in Philadelphia and that the hotel’s owners, operators and managers negligently failed to stop the trafficking. Several insurers instituted declaratory actions alleging that they had no duty to defend or indemnify the policyholders, arguing that providing coverage would violate Pennsylvania’s public policy against human trafficking as reflected in Pennsylvania’s human trafficking law. The District Court agreed and found that Pennsylvania public policy barred insurance coverage under the circumstances.

The Pennsylvania Supreme Court rejected the District Court and insurers’ reliance on Minnesota Fire & Casualty Co. v. Greenfield, 855 A.2d 854 (Pa. 2004), where a plurality of the Pennsylvania Supreme Court found that public policy barred insurance coverage for liability arising from a policyholder selling heroin to an individual in his home who later overdosed and died. While the Court recognized the State’s expressed policy against sex trafficking, the Court concluded that the criminal statute alone did not authorize courts to create an unwritten insurance exclusion where the policies themselves were silent. The Court also noted important factual differences distinguished the underlying litigation from Greenfield, including that the policyholders had not been convicted of or admitted to criminal conduct and that the underlying plaintiffs were victims, not voluntary participants in illegal activity. The underlying plaintiffs themselves filed an amicus brief arguing these points in support of the policyholders.

The Pennsylvania Supreme Court held that neither an insurer’s duty to defend nor its duty to indemnify is abrogated on public-policy grounds merely because the insured is alleged to have enabled or profited from sex trafficking. Reaffirming that coverage disputes are generally resolved by comparing the complaint with the insurance policy, the Court declined to act as a “super-scrivener” to insert coverage exclusions that could have been made part of the insurance policy when drafted. It was not within the Court’s purview to rank the magnitude of the public policy underlying the various crimes; instead, insurance carriers can draft policies that exclude coverage for damages arising out of violations of the law.

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