In a major win for policyholders, the California Supreme Court recently held that a negligent hiring, supervision, or retention claim arising out of an employee’s intentional misconduct constitutes an “occurrence,” giving rise to coverage under a general liability policy. In the case, the insured was a general contractor, which was hired to perform a renovation on a California middle school. The work was done while the middle school was still open and, in the course of the construction, a worker on the project molested a child at the school. The child’s family sued the contractor for negligent hiring and the contractor submitted the claim to its insurer for coverage. The insurer filed a declaratory judgment against the contractor, based on the position that the intentional conduct of the employee could not give rise to an “occurrence” because it was not accidental. The court disagreed, finding that, although the employee’s conduct was intentional, the employer’s conduct was negligent and therefore covered as an “occurrence.”
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Jun 25, 2018
William S. Bennett