Opinion ID: 670306
Heading Depth: 2
Heading Rank: 4

Heading: Coverage for Willful Conduct

Text: Finally, we reject the Insurers' argument that California law precludes coverage because the Policyholders' conduct toward the tenants' was willful. A clear line of authority in California directs that even an act which is intentional or willful within the meaning of traditional tort principles will not exonerate the insurer from liability under [Sec.] 533 unless it is done with a preconceived design to inflict injury. Zurich Ins. Co. v. Killer Music, Inc., 998 F.2d 674, 679 (9th Cir.1993) (citations and internal quotations omitted). The possibility that Sec. 533 might operate to exclude coverage does not excuse [the Insurers'] initial decision to deny coverage. [I]n order to rely upon Section 533 ... [the Insurers] must show that information available to [them] at the time demonstrated that [the tenants in the underlying suit were] required to establish that [the Policyholders] intended [to harm them], not merely that [the Policyholders] intended to act. Id. (citations and internal quotations omitted). No showing of intent was required to succeed on the negligence claim. 2