Are You Covered for Punitive Damages?

What are punitive damages? Simply stated, punitive damages are a monetary award given to a plaintiff for the sole purpose of punishing a defendant for wrongful acts. They are not awarded in every case; acting maliciously or having an intentional disregard for the rights of the plaintiff are reasons for such an award. Gross negligence is a factor.

Punitive damage awards are above and separate from normal compensatory damages a plaintiff receives such as medical bills, lost wages, pain and suffering, etc.

This Journal Sentinel article outlines a case in Wisconsin where a $100,000 award for punitive damages was upheld. It involved a restaurant customer finding hair in his steak that was put there intentionally by a cook. The lawsuit claimed that the cook had done it before. The jury’s verdict was a punishment for the restaurant not taking corrective actions with the cook sooner.

Unfortunately for defendants, many insurance carriers have excluded punitive damages in their policies. It is worthwhile knowing which carriers have this exclusion, and it is shocking just how many there are!

Society Insurance does not have this exclusion. In states where insurance carriers are allowed to pay for punitive damage awards, this is a unique topic of interest that some carriers cannot address.  As a Society agent, you can!

Learn more about the small details that make a big difference when it comes to your business coverage.

-Tom Ermers

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