A federal court in South Carolina recently held a criminal acts exclusion in a homeowners’ policy precludes coverage for a lawsuit against the named insureds arising out of alleged sexual abuse committed by the insureds’ son based on the policy’s joint obligations provision. Allstate Indemnity Co v. Tilmon, 2014 WL 1154666 (D. S.C. Mar. 21, 2014). 

The named insureds and their son were sued for injuries arising out of alleged sexual abuse of a minor committed by the son, and the insurer sought declaratory relief that the homeowners’ policy issued to the named insureds precluded coverage for all claims asserted due to the policy’s criminal acts exclusion. The policy also included a joint obligations provision, providing that the acts and failures of one insured would be binding on all other insureds. Granting the insurer’s motion for summary judgment, the court held that the policy’s joint obligation provision meant that the sexual battery abuse by the son was attributable to the named insureds, his parents, and that all claims asserted in the underlying lawsuit were excluded by the policy’s criminal acts exclusion.