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Nossaman Partners Joan Cotkin and Steven Knott Quoted in Law360 on Negligent Hiring Insurance Coverage Issue

06/06/2018 Law360

Partners Joan Cotkin and Steven Knott were quoted in the Law360 article, “Calif. Employers Get Coverage Relief On Negligent Hire Suits.”  The article reviewed the recent California Supreme Court ruling in Liberty Surplus Insurance Corp. et al. v. Ledesma & Meyer Construction Co. Inc., in which they found that even if an employer is negligent in hiring, retaining or supervising a worker who intentionally injured a third party, this can trigger a general liability policy’s coverage for an accident, or “occurrence.”  Ms. Cotkin agreed with the court’s decision, noting that a ruling in Liberty’s favor would have damaged more than 50 years of California legal precedent, including the seminal 1966 ruling in Gray v. Zurich that allows an insurer’s defense duty to be triggered by the potential for claims against a policyholder to fall within a policy’s coverage. “Obviously, we were on pins and needles with this case,” Cotkin said, explaining that “if it had gone the other way, it would have been a huge U-turn from Gray v. Zurich and the decades of case law that followed.”

She went on to say that the California justices were correct in denying Liberty’s efforts to narrow the definition of an accident. She explained that this was critical, because “the insurance industry has been waging an all-out assault on occurrence-based coverage and trying to narrow the concept of an occurrence in these policies to exclude any volitional conduct.” She elaborated that “volitional conduct is involved in even the simplest circumstances that result in an injury. A driver may intend to turn left, but not intend to cause an accident.”

Partner Steven Knott concluded the article by summarizing the ramifications of the case for future insurance recovery-related matters: “The big picture is: If an insurer wants to add an exclusion to coverage, it needs to add an exclusion." He continued, "Insurers shouldn’t be trying to add exclusions in after the fact.”

The full article can be read here (Paid Subscription Required).

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