Where Crime Victim Injured Due to Intentional Act of Third Person, Insurance Coverage May Not be Available

The Superior Court of Pennsylvania ruled on November 18, 2008 that public policy prohibits insurance coverage for restitution imposed as part of a criminal conviction.

In Brethen Mutual Insurance Co. v. McKernan, McKernan killed her boyfriend in a heated argument. She was convicted of reckless endangerment and simple assault. As part of her conviction she was ordered to make restitution by paying for her boyfriend’s funeral.

Later, the estate of the decedent sued her for civil damages. However, the insurance company for McKernan refused to defend or indemify her arguing that there was no coverage for intentional torts.

Although the Court denied defendant’s motion on this basis because they opined that since the conviction was based on negligence theories (recklessness), they nevertheless held that permitting insurance coverage in this situation would be against public policy.

According to the Superior Court criminal restitution is imposed for its effect on the defendant in an effort to rehabilitate the convicted person. Insurance coverage for this restitution would defeat this purpose entirely, according to the Court.