A federal District Court in Washington has held that a mental health risk retention group has the duty to defend a nonprofit mental healthcare provider despite a sexual misconduct exclusion in the general liability insurance policy. A client sued the provider for alleged offensive, humiliating and degrading acts, some involving possible sexual misconduct, and the risk retention group claimed it had no duty to defend because of the exclusion of coverage for bodily injury arising out of sexual misconduct. The Court said that Washington state law makes clear the difference between a duty to defend and a duty to indemnify and pay damages. The duty to defend arises based on “the insured’s...