Insurance 101 – Chapter 11 – Volume 12 – Punitive Damages Explanation

Punitive Damages Explanation

Insurance contracts require that each party reposes an element of trust and confidence in the other to perform the terms and conditions of the contract. One party’s right to indemnity, standing alone, does not give rise to a fiduciary relationship. Therefore, it can be argued that in California, punitive damages may not be awarded for a breach of an insurance contract and the plaintiff must prove actual tortious conduct that complies with all of the requirements for proof of punitive damages. Applying the Exxon, case the punitive damages should never exceed, if they are awarded at all, more than a 1:1 ratio of compensatory damages.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

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The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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