An insurer wants out of an assault claim against a company it covered - and it is stacking policy exclusions to get there.
Argonaut Insurance Company has gone to federal court to argue it owes nothing to Adir International, the company doing business as Curacao, over a lawsuit moving through California state court. The coverage complaint was filed June 4, 2026, in the Central District of California.
The dispute traces back to a state-court suit. According to Argonaut's filing, a woman sued Adir - named there as "Curacao, a California corporation" - along with two men in San Bernardino County Superior Court on or about May 22, 2025. The complaint says her case rests on allegations that, on June 20, 2021, she was lured into a company van and assaulted by the two men. They are defendants in that state-court case, not in Argonaut's coverage suit.
Per the complaint, the underlying plaintiff's claims against the two men include sexual battery, assault, intentional infliction of emotional distress and false imprisonment. Against Curacao, the filing says she brought a single claim: negligent hiring, supervision, and retention of the two drivers.
That one negligence claim pulled the insurer in. Adir asked Argonaut to defend, and Argonaut agreed - but under a full reservation of rights, which let it pay now while preserving the right to bow out later and recover what it spent. It is now trying to do exactly that.
The argument runs through the policy text. The Commercial General Liability policy, number CPO9406047-02, covered October 1, 2020, to October 1, 2021, with limits of $1,000,000 per occurrence and $2,000,000 in aggregate. Argonaut leans on several exclusions.
The auto exclusion blocks coverage for injury "arising out of the ownership, maintenance, use or entrustment to others of any" auto owned, operated, rented or loaned to any insured. Crucially, the policy says it applies "even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others" - language built to catch negligent-hiring claims that involve a vehicle.
The Abuse Or Molestation Exclusion endorsement is the second pillar. It removes coverage for injury arising out of "the actual or threatened abuse or molestation by anyone of any person while in the care, custody or control of any insured," and also for negligent employment, investigation, supervision, reporting and retention of such a person. Argonaut also points to the personal and advertising injury exclusion and a punitive damages exclusion.
For claims professionals, that is the takeaway: a single fact pattern that lets an insurer fire both the auto exclusion and an abuse-or-molestation endorsement at the same negligent-hiring claim. Argonaut also invokes Buss v. Superior Court and Blue Ridge Ins. Co. v. Jacobsen, the California rulings insurers use to recoup defense costs spent on claims that were never even potentially covered.
For now, these are allegations and an untested coverage position. Adir has not yet responded in the federal case, and no court has ruled. The complaint says Adir disagrees with the insurer and contends coverage is possible under the policy.
