Police quotas are ticket to liability

Ordinarily, insurance policies don’t cover willful improper conduct by the insured. At the same time, if an employer retaliates against employees who blow the whistle on unlawful behavior, or who refuse to engage in unlawful behavior, that appears to be a willful act. Does that mean retaliation claims are uninsurable under California law? A court of appeal analyzed that question after an insurance company refused to indemnify against a retaliation claim.

Where there is willfulness, is there a way to insure?

California Insurance Code section 533 provides “an insurer is not liable for a loss caused by the willful act of the insured” Does that prohibit defense and indemnification for retaliation claims against employees who report activity they have reasonable cause to believe is unlawful, or for refusing to participate in activity that actually is unlawful?

This is an important question whose answer will influence enforcement of our employment laws because retaliation claims are the most common employment claims in California since 2016.

Can insurance company avoid wrongful termination liability?