50 State Guide to Punitive Damages – Can My Professional Liability Policy Cover?
A frequently asked question for certain firms concerns insurance protection for punitive damages. More than one firm has determined which insurance policy to choose based on whether the policy language includes or excludes coverage for punitive damages. While this may be an important determination it could also be a mute question. Even if the policy provides coverage for punitive damages, consider the pertinent state laws. If not permitted by the state the policy language does not matter.
The law in this area is complex and evolving — individual cases may depend on policy language, choice-of-law provisions, and specific factual circumstances. Consult qualified insurance coverage counsel for any specific matter.
To summarize:
- ~20 states allow direct insurability — freedom of contract prevails (AL, AK, AZ, AR, DE, GA, HI, ID, IA, KY, LA, MS, MT, NV, NH, NM, NC, ND, OK, RI, SC, SD, TN, VT, VA, WV, WI, WY)
- ~10 states prohibit coverage but recognize a vicarious liability exception — the employer/principal can insure when liability derives from an employee’s/agent’s conduct (FL, IL, IN, KS, MN, NJ, PA, and partially OH, TX)
- ~5 states broadly prohibit all coverage including vicarious (CA, CO, ME, NY, OR, UT)
- 3 states + 1 territory do not allow punitive damages at all (MI, NE, WA)
- Certain jurisdictions remain unclear or conditional (CT, MA, MD, MO, D.C., TX)
The following table list by state a summary of what is or is not allowed:
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Punitive Damages Insurability Rules by U.S. Jurisdiction |
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General Legal Research Summary — Not Legal Advice |
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Last updated: April 2026. Consult qualified insurance coverage counsel for any specific matter. |
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State |
Insurability Rule | Vicarious Liability Exception |
Notes |
| Alabama | Insurable | N/A (directly insurable) |
Cap is greater of $1.5M or 3× compensatory (Ala. Code § 6-11-21) |
| Alaska | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Arizona | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Arkansas | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| California | Not insurable | No |
Public policy prohibition; PPG Indus. v. Transamerica Ins. Co. (1999); Cal. Civ. Code § 3294 |
| Colorado | Not insurable | No |
Public policy prohibition; beyond-a-reasonable-doubt standard; Lira v. Shelter Ins. Co. (1995) |
| Connecticut | Mixed/Conditional | Unclear |
Punitive damages limited to litigation costs only (Conn. Gen. Stat. § 52-240b); insurability is fact-specific |
| Delaware | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Florida | Not insurable (direct) | Yes |
Fla. Stat. § 768.72; Northwestern Nat’l Cas. Co. v. McNulty (5th Cir. 1962); vicarious claims may be insurable |
| Georgia | Insurable | N/A (directly insurable) |
GA Code § 51-12-5.1; 75% of award above $250K payable to state; cap of $250K (exceptions apply) |
| Hawaii | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Idaho | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Illinois | Not insurable (direct) | Yes |
735 ILCS 5/2-1115; vicarious punitive damages may be insurable; preponderance standard |
| Indiana | Probably not insurable | Yes (likely) |
Erie Ins. Co. v. Hickman (2001); 25% of award payable to state (IC § 34-51-3-6); vicarious claims may be insurable |
| Iowa | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Kansas | Not insurable (direct) | Yes |
Vicarious punitive damages may be insurable; clear and convincing standard |
| Kentucky | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Louisiana | Insurable | N/A (directly insurable) |
Punitive damages available only by statute (La. Civ. Code art. 2315.4); DUI and child exploitation cases |
| Maine | Not insurable | No |
Public policy prohibition; clear and convincing standard |
| Maryland | Limited/Conditional | N/A |
Punitive damages largely unavailable since Owens-Illinois v. Zenobia (1991); limited statutory exceptions; SB871/HB906 (2026) proposed to restore |
| Massachusetts | Mixed/Conditional | Unclear |
Punitive damages available only under certain statutes (wrongful death; Ch. 93A treble damages); insurability is fact-specific |
| Michigan | N/A | N/A |
Punitive damages not allowed in Michigan |
| Minnesota | Not insurable (direct) | Yes |
K.M. v. Fargo-Moorhead YMCA (2002); vicarious claims may be insurable; clear and convincing standard |
| Mississippi | Insurable | N/A (directly insurable) |
Miss. Code § 11-1-65; statutory cap applies; clear and convincing standard |
| Missouri | Unclear/Undecided | Unclear |
No definitive ruling; freedom of contract arguments available; fact-specific |
| Montana | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Nebraska | N/A | N/A |
Punitive damages not allowed; Neb. Rev. Stat. § 25-21,185.12 |
| Nevada | Insurable | N/A (directly insurable) |
Nev. Rev. Stat. § 42.005; clear and convincing standard |
| New Hampshire | Insurable | N/A (directly insurable) |
Punitive damages available only by statute |
| New Jersey | Not insurable (direct) | Yes |
N.J. Stat. § 17:28-1.1; Punitive Damages Act (N.J. Stat. § 2A:15-5.12); vicarious claims may be insurable |
| New Mexico | Insurable | N/A (directly insurable) |
Preponderance standard |
| New York | Not insurable | No |
Strong public policy prohibition; Home Ins. Co. v. American Home Products Corp. (1990); Zurich v. Shearson Lehman Hutton (1994); applies to direct and vicarious claims |
| North Carolina | Insurable | N/A (directly insurable) |
N.C. Gen. Stat. § 1D-25 |
| North Dakota | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Ohio | Not insurable (statutory) | Limited |
Ohio R.C. § 3937.182 prohibits for auto/casualty/liability policies; courts construe narrowly; malice-based awards uninsurable per public policy |
| Oklahoma | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Oregon | Not insurable | No |
ORS 31.735(1) (formerly ORS 30.925); statutory prohibition; 60% of award payable to state |
| Pennsylvania | Not insurable (direct) | Yes |
Esmond v. Liscio (Pa. Super. 1974); vicarious claims may be insurable |
| Rhode Island | Insurable | N/A (directly insurable) |
Freedom of contract |
| South Carolina | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| South Dakota | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Tennessee | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Texas | Conditional/Insurable (gross negligence) | Yes |
Fairfield Ins. Co. v. Stephens Martin Paving (Tex. 2008); gross negligence insurable; intentional conduct likely not; context-specific |
| Utah | Not insurable | No |
Utah Code § 31A-20-101; statutory prohibition; 50% of award above $20K payable to state |
| Vermont | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Virginia | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Washington | N/A | N/A |
Punitive damages generally not allowed; limited statutory exceptions (e.g., certain consumer protection claims) |
| West Virginia | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| Wisconsin | Insurable | N/A (directly insurable) |
Brown v. Maxey (1984) |
| Wyoming | Insurable | N/A (directly insurable) |
Clear and convincing standard |
| District of Columbia | Undecided | Unclear |
No definitive ruling on insurability; punitive damages require clear and convincing evidence of evil motive or willful disregard |
| Federal | Varies by statute/jurisdiction | Varies |
No uniform federal rule; depends on applicable statute (Title VII caps at $300K; ERISA; admiralty) and choice-of-law; BMW v. Gore (1996) and State Farm v. Campbell (2003) set due process limits on award amounts |
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DISCLAIMER: This table is a general legal research summary, not legal advice. The law in this area is complex and evolving. Consult qualified insurance coverage counsel for any specific matter. |
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