Opinion ID: 1801833
Heading Depth: 5
Heading Rank: 3

Heading: Availability of insurance or alternative courses of conduct

Text: Next, we may assume that standard business liability insurance is available to cover instances of negligent misrepresentation or nondisclosure as alleged in count three of the complaint, but is not available for the fraud or intentional misconduct alleged in count four. (See Ins. Code, § 533; Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 16-18 [44 Cal. Rptr.2d 370, 900 P.2d 619].) Perhaps more significantly, defendants had alternative courses of conduct to avoid tort liability, namely, (1) writing a full disclosure letter revealing all relevant facts regarding Gadams's background, or (2) writing a no comment letter omitting any affirmative representations regarding Gadams's qualifications, or merely verifying basic employment dates and details. The parties cite no case or Restatement provision suggesting that a former employer has an affirmative duty of disclosure that would preclude such a no comment letter. (4) As we have previously indicated, liability may not be imposed for mere nondisclosure or other failure to act, at least in the absence of some special relationship not alleged here. ( Garcia, supra, 50 Cal.3d at p. 734; see Rest.2d Torts, § 315.)