Recently, the California Supreme Court, in a 7-0 decision applying California principles of insurance policy interpretation, concluded that an exclusion of coverage for the intentional acts of  “an insured,” read in conjunction with a severability or “separate insurance” clause … creates an ambiguity which must be construed in favor of coverage that a lay policyholder would reasonably expect.

Specifically, in this unanimous decision, the California Supreme Court answered “no” to the certified question asked by the United States Ninth Circuit Court of Appeal: “Where a contract of liability insurance covering multiple insureds contains a severability clause, does an exclusion barring coverage for injuries arising out of the intentional acts of ‘an insured’ bar coverage for claims that one insured negligently failed to prevent the intentional acts of another insured?”

• Minkler v. Safeco Insurance Company Appellate Brief Filed April 8, 2009 (.pdf)
• Minkler v. Safeco Insurance Company California Supreme Court Decision Filed June 17, 2010 (.pdf)