The Office of General Counsel issued the following informal opinion on May 30, 2002, representing the position of the New York State Insurance Department.
Re: Insurance coverage of intentional criminal acts
Will liability insurance cover damage resulting from intentional criminal acts?
Generally, intentional criminal acts are excluded from liability insurance coverage. However, whether a particular insurance policy covers a particular fact pattern is a contract issue that must be decided by a court of law.
The inquirer stated that the inquirer is the victim of the intentional criminal acts described in the inquirers letter to this office. The inquirer wanted to know if the perpetrators liability insurance policy would cover for the injuries and damages that resulted from the perpetrators criminal acts. The inquirer indicated that the perpetrator is a member of organized crime.
N.Y. Ins. Law § 1101(a)(1) (McKinney 2000) states in the relevant part:
. . . "Insurance contract" means any agreement or other transaction whereby one party, the "insurer", is obligated to confer benefit of pecuniary value upon another party, the "insured" or "beneficiary", dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event.
N.Y. Ins. Law § 1101(a)(2) (McKinney 2000) defines "[f]ortuitous event" to mean " . . . any occurrence or failure to occur which is, or is assumed by the parties to be, to a substantial extent beyond the control of either party." By definition, insurance contracts in New York, generally, may not be written to insure a person for that persons intentional criminal acts. Generally, ". . . public policy precludes indemnifying an insured for intentionally inflicted injuries." Town of Massena v. Healthcare Underwriters Mutual Insurance Company et al., 281 A.D.2d 107, 724 N.Y.S.2d 107 (App. Div. 3rd Dept. 2001).
However, "[t]he duty to defend is a very broad one . . . , arising whenever the allegations contained in the pleadings, together with such other underlying facts as have been "made known to the insurer . . . create a reasonable possibility that the insured may be held liable for some act or omission covered by the policy." Id. Language of liability policies may vary, including the language of the exclusions of such policies. "[E]xclusions from coverage are not favored and will be strictly construed. . . . " Slayko v. Security Mutual Insurance Company, 285 A.D.2d 875, 728 N.Y.S.2d 282 (App. Div., 3rd Dept. 2001).
"Literal compliance with the provisions of the policy and statutes is the rule and any ambiguity in language is strictly construed against the insurer." Government Employees Insurance Company v. Mizell, 36 A.D.2d 452, 320 N.Y.S.2d 936 (N.Y. Sup. Ct. 1971). "A policy of insurance represents a contract between the insured and the insurer. Like any other contract, a meeting of the minds with respect to the terms is essential." Hartford Fire Insurance Company v. Bonsera, Inc. et al., 177 Misc. 2d 55, 675 N.Y.S.2d 827 (N.Y. Sup. Ct. 1998).
In conclusion, whether the harm caused by an alleged intentional act is covered by a policy constitutes a valid contract issue for a court of law to decide.
For further information you may contact Senior Attorney Susan A. Dess at the New York City Office.