Insurance Law Lesson 100: Liability for the Intentional Acts of an Employee

2018 was a big year for this issue.

May brought the Wisconsin Supreme Court’s decision in Talley v. Mustafa, where the insured was sued after an employee punched a customer, breaking his jaw. 2018 WI 47 (May 11, 2018). The court held that “when the negligent supervision claim pled rests solely on an employee’s intentional and unlawful act without any separate basis for a negligence claim against the employer, no coverage exists.”

One month later came the opinion in Liberty Surplus Ins. Co. v. Ledesma & Meyer Constr. Co., 5 Cal.5th 216 (2018). The California Supreme Court was considered whether a business was covered when its employee molested a young girl. The court considered that the decision to hire the employee had been intentional, and the injury was caused by the employee’s intentional act. But, the business did not intentionally hire an employee to injure the young lady. As such, the court held that coverage was owing.

This issue has not been directly considered by the Michigan Supreme Court. But, like the California court in Ledesma, our Court has held that the “occurrence” analysis is from the standpoint of the insured. Allstate Ins. Co. v. McCarn, 466 Mich. 277 (2002).


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