Call Us Today For A Free Quote | 866.940.1101
Professionals Insuring Professionals

Many an insured has received an unpleasant surprise finding out after a court has awarded attorney’s fees or punitive damages that these awards are not covered by their malpractice insurance policy.  Yes the act(s) that were alleged were covered and yes your insurance carrier paid your defense costs and the award for damages.  But the largest portion of the award may be the punitive damages and attorney’s fees.

The time to check for coverage is not after the punitive damage award.  So how can you determine whether a particular malpractice insurance policy covers punitive damages?  Punitive damage awards are normally awarded for egregious acts with a few malpractice policies providing coverage but most do not.  One needs to read their Professional Liability Insurance policy to determine if there is coverage.  But finding the ‘exclusion’ can be tricky.  Just because it is excluded does not mean you will find it in the ‘exclusion section’.

One of the more common places to find the punitive damages ‘exclusion’ is where it is in the Wesco Lawyers Professional Liability Insurance policy definition of damages:

E.    “Damages means  judgments,  awards  and  settlements  if  negotiated  with  the  assistance  and  approval  of  the Company.  Damages do not include:


4. punitive or exemplary amounts and any multiplied portion of multiplied awards;…”


But sometimes the ‘exclusion’ is in the insuring agreement or the ‘exclusion’ section of the policy. 

The more difficult task is determining if a policy does cover punitive damages.  It is rarely explicitly stated that damages include punitive damages.  Normally you are left with a thorough reading of the entire policy to determine whether a ‘punitive damage exclusion’ exists.

Even after you have done all of this to find if a policy that will cover punitive damages, there is one more place to check.  That is to determine whether the payment of punitive damages is allowed in your particular state.  Even if the policy either states or does not exclude punitive damages, the policy must conform to the laws and court rulings for your particular state.  In almost 50% of the states, it is not permitted to insure for punitive damages.                    

One site to check is:

Punitive Damages permitted by state

Punitive damages and sanctions (attorney’s fees) can be substantial; if you have concerns about these being awarded against you review the policy in question and then determine if in your state allows insurance coverage.


Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive

View Mobile Version
Quick Contact
We love referrals! And thank you even more for your continued business.
Customer Service
Self policy service any time of the day, directly from our website.
Join Our Newsletter
Stay in touch with the latest events, news and offers we have.
From Our Blog From Our Customers
Read More Read More
Stay In Touch With Us Helpful Site Links Read the News
Sign up now to receive new and updates Stay up-to-date with the latest industry, community and agency news through our newscenter. We also provide handy hints on how to save on your insurance.

Read More
We have the expertise to find you the right coverage at the right price 
Powered by Insurance Website Builder