The question in this case is whether the rule barring insurance coverage for acts of intentional discrimination applies to allegations of disability discrimination on a failure-to-accommodate theory.
The New York form general liability insurance policy provides coverage, in effect, for damages caused by an accident but not an intentional act. In the context of discrimination, this rule affects coverage differently depending on the type of discrimination alleged. For instance, an insured typically cannot be indemnified for damages caused by its disparate treatment discrimination, since that type of discrimination requires a showing of intentional discrimination. But an insured may be indemnified for damages caused by its disparate impact discrimination, since that type of discrimination does not require a showing of discriminatory intent.
Failure-to-accommodate disability discrimination falls somewhere between these two examples. A plaintiff asserting such a claim need not establish discriminatory intent, but must nevertheless show an intentional (i.e., non-accidental) act–that is, the defendant’s refusal to make a reasonable accommodation. The question certified by the Second Circuit in this case is whether damages resulting from disability discrimination on a failure-to-accommodate theory are the product of an intentional act such that they cannot, under state law, be covered by the form general liability policy.
In this case, plaintiff Brooklyn Center for Psychotherapy (BCP) refused to provide a sign-language interpreter when requested by a deaf patient, and was later sued for disability discrimination on a failure-to-accommodate theory. BCP prevailed after trial, but its insurer refused to provide a defense in that dispute, and BCP sued the insurer for breach. The district court dismissed the coverage action, concluding in relevant part that the discrimination alleged against BCP was premised on the intentional act of refusing to accommodate the patient’s disability, and thus did not trigger coverage under the policy or the insurer’s duty to defend. The Second Circuit certified that question to the Court of Appeals, finding that construction of the state’s policy form raised “important public policy choices that the New York Court of Appeals is better situated than we to make.”
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