Defeating the Intentional Act Exclusion

Eric Dinnocenzo, American Association for Justice, May, 2019

Insurance policies commonly exclude coverage for intentional torts such as assault, battery, or false imprisonment, leaving injured ­plaintiffs and their attorneys with the difficult task of tracking down and executing on the defendant’s assets, if any exist.¹ As a result, trial lawyers sometimes turn away potential clients when liability is clear, just because the harm was intentionally caused. But by closely analyzing the policy language and the law of your jurisdiction, you can overcome the intentional act exclusion.

As a rule, commercial general liability and homeowners insurance policies provide coverage for an “occurrence­,” which the policy defines as an “accident” resulting in bodily injury. Insurance policies do not list categories of covered events, such as ­slip-and-falls or inadequate security. Instead, they provide coverage generally, which means the scope of coverage hinges on how courts in a particular jurisdiction have defined the broad legal terms “occurrence” and “accident,” if at all.

After laying out the scope of coverage, insurance policies then list exclusions that preclude coverage. The insured’s intentional acts, often defined in the policy as acts that cause bodily injury “expected or intended” by the insured, are usually excluded.

Some states have established this scheme by statute. The California Insurance Code, for example, provides that “an insurer is not liable for a loss caused by the willful act of the insured.”² In other states, it is part of the common law. Although some courts have rationalized that it is against public policy to provide insurance coverage for intentional acts,³ the opposing argument is that the people who have been injured should be compensated when the intentional tortfeasor has an insurance policy.⁴ It is doubtful that limiting the scope of intentional acts covered by insurance has the effect of discouraging them.⁵

Be aware that once you file suit against a responsible entity other than the intentional actor, that constitutes notice to the insurance carrier and typically triggers coverage for a negligence cause of action—for example, when an injured person sues a nightclub after being assaulted by staff or another patron. However, there is not always coverage in these instances. Some insurance policies issued to nightclubs contain an intentional act exclusion for bodily injury “expected or intended from the standpoint of any insured, or its employees, patrons, customers, agents or any other person.”

Because insurance policies provide coverage for “accidents,” you must understand how the courts in your jurisdiction have defined this term. Depending on the facts of your client’s case, the policy terms, and your jurisdiction, the intentional act exclusion can be overcome if the insured—even if acting in an intentional manner—did not expect or intend the nature or degree of injury that your client suffered.

Coverage for ‘accidents.’ Courts have held that an “accident” includes not only an unexpected event—such as a car crash—but also an intentional act that causes an unintended harm. For example, the New York Court of Appeals has defined an “accident” as “an unintentional or unexpected event . . . and an intentional or expected event which unintentionally or unexpectedly has that result.”⁶

Applying this definition, a New York state appellate court later found that—after an insured grabbed the plaintiff and fell with him through a store window—coverage was available because the insured “did not expect, intend or foresee that ­plaintiff would end up crashing through the plate glass window or be injured in any way when [the insured] placed him in a bear hug.”⁷

The Massachusetts Supreme Judicial Court has similarly held that an intentional act is an “accident” if the insured “does not specifically intend to cause the resulting harm or is not substantially certain that such harm will occur.”⁸ Other states have forged a similar path, including the Minnesota Supreme Court, which has held that an “accident” may include an intentional act when “the resulting harm was unintended or unexpected by the insured.”⁹ The court ruled that it was an “accident” when—without intending to injure the plaintiff—the defendant pulled on the plaintiff’s ankles when he was hanging by his hands from a basketball rim, causing him to fall and suffer injuries.¹⁰

Subjective v. objective analysis. The typical intentional act exclusion precludes coverage for bodily injury that is expected or intended from the ­standpoint of the insured. Many courts use a subjective standard to analyze whether the insured expected or intended the resulting harm to occur.¹¹ In one Massachusetts case, for example, a 16-year-old boy threw a rock at a car, injuring two passengers.¹² The insured admitted to throwing the rock, but the state high court ruled that there were questions of fact about whether he expected or intended to harm the two passengers and reversed the trial court’s grant of summary judgment to the insurer.¹³

In a case in Indiana, an 18-year-old insured who was smoking marijuana and firing a pellet gun at objects such as signs and bottles eventually turned his fire on vehicles on a nearby highway, injuring a driver. The court denied the insurer summary judgment because it could not be said as a matter of law that the insured expected to harm the driver.¹⁴

Be aware that some insurers, perhaps in response to decisions applying subjective analysis, have enlarged the intentional act exclusion in their policies to encompass different harm or damage than the insured expected or intended. This enlarged exclusion may, for example, be seen in an HO-3 policy, or homeowners insurance special form. For instance, in a Pennsylvania case involving a Travelers Insurance policy, the intentional act exclusion precluded coverage for bodily injury “expected or intended by an ‘insured’ even if the resulting ‘bodily injury’ . . . is of a different kind, quality or degree than initially expected or intended.”¹⁵

Using an objective analysis, some courts have adopted a strict approach, assessing whether the policyholder knew or should have known that harm or damage would occur. In a case involving two teenagers shooting .22 caliber rifles in the direction of traffic on a highway, a Tennessee state appellate court found that—even though the insurer did not argue that the teenagers intended to injury anyone—the intentional act exclusion applied because they “intended or expected that some type of harm would result.” ¹⁶ The fact that the teenagers caused much greater harm than they expected was “irrelevant.”¹⁷

But when courts use the objective analysis, the problem is that they may ignore policy language stating that an exclusion only applies to harm that the insured expected or intended, substituting a reasonable person standard instead of more properly evaluating the insured’s state of mind. ¹⁸ Either way, researching whether your jurisdiction typically uses a subjective or objective approach gives a good indication of the uphill battle you may face.

Another way to defeat a policy exclusion is to argue that the insurance company has failed to properly invoke it. When denying coverage, insurers are supposed to send a denial letter to the insured and, in some states, a copy to the injured person. The failure to send a reservation of rights or disclaimer letter invoking the intentional act exclusion, or even a delayed mailing, can amount to a waiver of the exclusion.¹⁹

For example, a federal court held that an intentional acts disclaimer was invalid because it was sent to the insured 105 days after receiving notice of the claim, violating a statutory requirement for prompt notice. ²⁰ In a New Jersey Supreme Court case, the insurance company was prevented from asserting the intentional act exclusion on the basis of estoppel—the insured promptly informed the insurer of an assault that he committed, but the insurer delayed disclaiming coverage until after the plaintiff filed suit 17 months later.²¹

Regardless, expect insurance carriers to argue any waiver of the intentional act exclusion is immaterial because the underlying incident is not an “accident”—meaning it does not fall within the scope of coverage in the first place. Indeed, some courts have denied insurance coverage for intentional acts, not by applying the exclusion but by holding that an “accident” did not occur.

In a New York case, for example, the insured physically assaulted the plaintiff, causing him serious injury. The state appellate court held that a timely disclaimer based on the intentional act exclusion was immaterial: The underlying incident did not constitute an “accident” because the insured knew injuries could result and, in fact, pleaded guilty to third-degree assault.²²

File all meritorious causes of action, and don’t omit those that assert intentional torts. If the case goes to trial and the negligence claim fails, you will want to have pleaded assault, battery, or other claims in the alternative (if permitted in your jurisdiction). The fact that intentional torts are included in the complaint does not allow the insurance company to stop defending the case. If there is a valid negligence claim, then the insurer must provide a defense. Keep the claims to established causes of action; attempts to create hybrid causes of action such as “negligent assault” are not typically successful.²³

In one declaratory judgment action I handled, the trial court held that because the complaint contained a negligence cause of action (in addition to assault and battery), the insurer had a duty to defend in the underlying personal injury action, with the issue of indemnification to be determined at trial. After appealing the trial court’s decision on the duty to defend issue, the insurer made a settlement offer for a portion of the policy limits due to the continued expense of defending the underlying action, at least while the appeal was pending.

To the extent possible, tie your case’s facts to the relevant legal definition of an “accident.” If your jurisdiction holds that an “accident” encompasses an intentional act with unintended or unexpected consequences, tie this or similar language to the facts of your case. Don’t be conclusory or just repeat legal jargon—make sure to set forth the facts in a manner that supports coverage.

Through careful review of your jurisdiction’s case law and meticulous lawyering, you can defeat the intentional act exclusion.

Eric Dinnocenzo is the founder of the Law Offices of Eric Dinnocenzo in New York City. He can be reached at eric@dinnocenzolaw.com .

1. Although insurance coverage is available for some categories of intentional harms such as employment discrimination, wrongful eviction, defamation, and trademark infringement, this article focuses more generally on typical intentional tort cases and common insurance policies.
2. Cal. Ins. Code §533 (West 2019).
3. Voorhees v. Preferred Mut. Ins. Co. , 607 A.2d 1255 (N.J. 1992); Melrose Hotel Co. v. St. Paul Fire & Marine Ins. Co., 432 F. Supp. 2d 488 (E.D. Pa. 2006).
4. Voorhees , 607 A.2d 1255; Univ. of Illinois v. Continental Cas. Co., 599 N.E.2d 1338 (Ill. App. Ct. 1992).
5. See, e.g., Harrell v. Travelers Indem. Co. , 567 P.2d 1013, 1017 (Or. 1977).
6. See, e.g., Auto. Ins. Co. of Hartford v. Cook , 850 N.E.2d 1152, 1156 (N.Y. 2006) (internal citation omitted).
7. Clayburn v. Nationwide Mut. Fire Ins. Co. , 58 A.D.3d 990 (N.Y. App. Div. 2009).
8. Quincy Mut. Fire Ins. Co. v. Abernathy , 469 N.E.2d 797, 799 (Mass. 1984).
9. Am. Fam. Ins. Co. v. Walser , 628 N.W.2d 605, 612 (Minn. 2001).
10. Id.
11. See Domtar, Inc. v. Niagara Fire Ins. Co. , 563 N.W.2d 724 (Minn. 1997).
12. Quincy Mut. Fire Ins. Co. , 469 N.E.2d 797.
13. Id. at 801–802.
14. Bolin v. State Farm Fire & Cas. Co. , 557 N.E.2d 1084 (Ind. Ct. App. 1990).
15. Travelers Home & Marine Ins. Co. v. Stahley , 239 F. Supp. 3d 866, 872 (E.D. Pa. 2017).
16. Metro. Prop. & Cas. Ins. Co. v. Buckner , 302 S.W.3d 288 (Tenn. Ct. App. 2009).
17. Id. at 298.
18. Note that an act that is intentional or willful under tort law may not be intentional or willful for purposes of an insurance contract. See, e.g., Prudential Prop. & Cas. Ins. Co. v. Swindal, 622 So. 2d 467 (Fla. 1993).
19. Vill. of Brewster v. Va. Sur. Co., Inc. , 70 A.D.3d 1239 (N.Y. App. Div. 2010).
20. Jewish Cmty. Ctr. of Staten Island v. Trumbull Ins. Co. , 957 F. Supp. 2d 215 (E.D.N.Y. 2013).
21. Griggs v. Bertram , 443 A.2d 163 (N.J. 1982).
22. United Srvs. Auto. Assn. v. Iannuzzi , 138 A.D.3d 638 (N.Y. App. Div. 2016).
23. United Nat’l Ins. Co. v. The Tunnel, Inc. , 988 F.2d 351 (2d Cir. 1993).