Block on Trump's Asylum Ban Upheld by Supreme Court
The California Supreme Court issued a ruling in the highly watched Liberty v. Ledesma matter, and it may have insurers across the state upset. The case reached the California Supreme Court thanks to the Ninth Circuit's certifying the question to the state's high court.
In short, the court held that when an employee intentionally inflicts harm on a third party, an employer's insurer may actually have to cover the loss as an accident. The case that brought this issue to the court's attention involved the rape of a minor by a school employee. That employee had been hired by his brother-in-law, the school's owner, despite being on the sex offender registry.
The decision explains that general liability insurance policy must consider an employee's intentional acts as an employer's accident. Although the court did not go into the specifics of which types of intentional acts would lead to insurable consequences, the decision sets forth the basis for doing so.
As the court noted, causes of action for negligent hiring, supervision and retention related to an employee's intentional act seek to hold the employer (not the employee) liable. The employer did not act intentionally, or directly, to cause the harm. However, the employer is not out of the causal chain that led to the harm.
The California Court concluded that if insurer's could deny coverage when employee's acted intentionally, it "would leave employers without coverage for claims of negligent hiring, retention, or supervision whenever an employee acted intentionally." As the court reasoned, that sort of a result would be "inconsistent with California law."
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