In the case of Clay v. Sun Insurance Office, Ltd., 1963, the U.S Supreme Court addressed a dispute over an insurance claim. The plaintiff, Clay, had taken out a policy with Sun Insurance to cover his restaurant in Florida against loss by fire. When the restaurant was destroyed by arson committed by one of its employees without Clay's knowledge or involvement, he filed for compensation under his policy. However, Sun Insurance refused to pay on grounds that it was exempt from liability due to a clause in their contract excluding losses caused intentionally by employees. The lower courts ruled in favor of Sun Insurance but upon appeal at the Supreme Court level; this decision was reversed and remanded back for further proceedings consistent with their opinion. The court held that since there were no explicit provisions within Florida law allowing insurers to exclude coverage based on intentional acts committed by employees without owner’s participation or direction; such exclusionary clauses are unenforceable as they contravene public policy.

In the dissenting opinion for Clay v. Sun Insurance Office, Ltd., Justice Harlan disagreed with the majority's decision to allow an insurance company to deny coverage based on a clause in their policy that was not explicitly defined or explained. He argued that this approach undermined basic principles of contract law and could lead to unfair outcomes for consumers who may not fully understand the terms of their policies. Furthermore, he expressed concern about the potential implications of allowing insurers to avoid liability through vague or ambiguous language in their contracts. In his view, if an insurer wants to exclude certain risks from coverage, it should be required to do so clearly and unambiguously.