Can an insurance policy exclude punitive damages?

Usually, punitive damages are awarded only if there has been proof of intentional bad acts, and most insurance policies also exclude coverage for damages caused by intentional acts of the insured.

What is a punitive damages exclusion?

PUP 813 1-1-03. PUNITIVE OR EXEMPLARY DAMAGES. EXCLUSION. This policy does not apply to a claim or indemnification for "punitive or exemplary damages." "Punitive or exemplary damages" means damages imposed to punish a wrongdoer and to deter others from similar conduct.

Under what circumstances can an insured seek punitive damages against an insurance company?

Insureds may seek punitive damages if the insurer acted with malice, oppression or fraud. [15] Due process sets a ceiling on the amount of punitive damages that a plaintiff can recover, and the punitive damages award must bear a reasonable relationship to the amount of compensatory damages.

What is a punitive loss in insurance?

Punitive Damages — damages in excess of those required to compensate the plaintiff for the wrong done, which are imposed in order to punish the defendant because of the particularly wanton or willful nature of his or her wrongdoing.

Do umbrella policies cover punitive damages?

As with any insurance policy, don't expect an umbrella policy to cover your intentional acts that cause damage, nor will it pay for punitive damages in judgments against you or restitution you owe if convicted of a crime. Umbrella policies also don't cover damages from any businesses you run.

FAQ: Can you please explain the 'your work' exclusion on my general liability insurance policy?

What is not covered by an umbrella policy?

An umbrella insurance policy does not cover your own injuries or damages to your own home, car or property. Personal umbrella insurance also will not cover intentional acts, criminal behavior, damage caused while you're performing business activities, or damage from certain dogs or vehicle types.

Can punitive damages be covered by insurance in California?

Punitive damage claims raise another issue that counsel need to be aware of. California law prohibits indemnifying punitive damage awards as a matter of public policy. But the policy is grounded in the legal showing of "fraud, oppression or malice" required under California law for a punitive award.

Are punitive damages insurable in OK?

3d 1080 (Okla. 2005). Insurable?: No, unless for vicarious liability. It is against public policy to allow a wrongdoer to escape punishment by insuring himself against a punitive damages award.

Why are punitive damages capped?

A justification for imposing caps on punitive damages is that it will reduce the vari- ability of jurors' damage awards (Zoebel, 1996).

What must the claimant prove in order to secure punitive damages from the insurer?

In many states, claimants must meet a higher burden of proof to succeed on a punitive damage claim, offering clear and convincing evidence that a defendant's conduct justifies such an award.

Are bad faith damages punitive damages?

In California, because of the “special relationship” between an insured and an insurer, where an insurance company acts in bad faith and the misconduct is egregious, punitive damages are available.

Are punitive damages insurable in PA?

In Pennsylvania, public policy and long-standing precedent prohibit the insurability of punitive damages unless the insured's liability for the punitive damages awarded is solely vicarious.

Are punitive damages insurable in NY?

In New York, in 1979 the Court of Appeals determined that punitive damages were not insurable because they are designed to punish the wrongdoer and deter further misbehavior.

What's the difference between compensatory and punitive damages?

Compensatory And Punitive Damages

The compensatory damages awarded to plaintiffs are designed to give justice to them after being wronged. Punitive damages are designed to prevent others from being hurt by the same or similar actions.

What is a punitive wrap policy?

Key Takeaways. A wrap-around insurance program is a policy that provides punitive damages coverage for employment practices liability claims. It is also referred to as a wrap-around policy because it "wraps around" an admitted Employment Practices Liability Insurance (EPLI) policy.

What are some examples of punitive damages?

How often are punitive damages awarded?

However, statistical studies by law professors and the Department of Justice have found that punitive damages are only awarded in two percent of civil cases which go to trial, and that the median punitive damage award is between $38,000 and $50,000.

What do most states use as a general guideline for punitive damages?

In most states, the jury is instructed to consider both objective and subjective factors. These factors include the reprehensibility of the defendant's misconduct, the amount of punitive damages that would deter the defendant based on the defendant's wealth, and the nature of the plaintiff's injury.

How many states have caps on punitive damages?

Punitive damages are capped in 27 states, either by a particular amount or a punitive-to-compensatory damages ratio. Punitive damages are not inherently based on a plaintiff's economic and non-economic damages.

What are consequential damages in insurance?

Consequential Damages — consequential damages are an indirect result of a direct loss. Lost profit, lost rents, and lost business opportunities are examples of consequential damages that could be incurred as a result of a direct physical loss to property.

Are punitive damages covered by insurance in Alabama?

“Because of the oddity of the Alabama Wrongful Death Act, “[a] standard liability policy that excluded coverage for punitive damages in a wrongful death case would contravene Alabama law.” See also Alabama Attorney Gen. Op. 2 (Feb.

What are exemplary damages in insurance?

Exemplary Damages — damages in excess of that amount needed to compensate for the plaintiff's injury, awarded to punish the defendant for malicious or wanton conduct.

Does an umbrella policy cover a lawsuit?

An umbrella policy is a form of personal insurance, so it won't protect you from lawsuits related to a business you own.

Which of the following are standard exclusions for umbrella and excess policies?

What are some risks that umbrella insurance covers that other insurance policies do not?

Umbrella insurance provides coverage for claims that may be excluded by other liability policies including claims like false arrest, libel, slander, and liability coverage on rental units you own.