Is the claim for punitive damages insured?
As usual, insurance is the 110 pound gorilla in the room. It is one thing to be a crusader and secure a 10 million dollar punitive damages verdict for your client, but a whole other beast to actually translate the judgment into money your client can take to the bank. Unfortunately, it appears claims for punitive damages are generally uninsurable in New York. New York’s Court have ruled the public policy underlying a claim for punitive damages – that tortfeasors actually endure punishment in order to deter future bad conduct – is eradicated if insurance companies simply pick up the tab. The law firm McCullough, Campbell & Lane, LLP created a detailed list of the rules governing the interplay of punitive damages and insurance in all 50 states, including New York: Directly assessed punitive damages are not insurable in New York. See Public Service Mut. Ins. Co. v. Goldfarb, 425 N.E.2d 810 (N.Y. 1981); Hartford Accident & Indem. Co. v. Village of Hempstead, 397 N.E.2d 737 (N.Y. 1979); Soto
