Punitive Damages

[Carol J]

Does anyone know of a Punitive Damage indemnification whereby an insurer will reimburse for punitive damages paid by the insured? The primary policy is silent on punitive so it will respond where allowed by State Law, however, I thought that there were some off shore indemnification contracts that would provide reimbursement for punitive damages that are not insurable by State Law. Thank you.

[CSP]

In 31 years in the business, I have never seen a company reimburse for punitive damages.

[mnicks]

Carol J you are looking for a Punitive Damages Wrap. Can only get it through Bermuda domicled insurer. Policy will "drop down" and provide punitive damage coverage. Important to note, if your policy has a specific punitive damage exclusion then the wrap policy will not apply. Some carriers like ACE will provide a wrap quote from their Bermuda affiliate, otherwise go to your London or Bermuda broker. US Wholesalers usually can't help because they cannot do business with Bermuda due to surplus lines regulations. You may run into an issue on filing the taxes if you don't have a surplus license, some states allow the insured to file taxes as independently procured. Good Luck.

[Uncle Art]

I have - offshore insurers will readily provide punitive damages insurance

[Carol J]

Thank you - do you know of a specific broker I could approach for this? It will have to be monoline. The primary policy is already in place and silent on the punitive, so it will respond where allowed.

[mnicks]

Try Price Forbes www.priceforbes.com or Lloyd & Partners Limited www.lloydandpartners.com. You could also check with your favorite wholesaler and see if they can refer you to their London broker. Since they can't do the placement they might be willing to point you in the direction.

[LadyBroker]

US Wholesalers can trade with Bermuda companies. You just pay a Federal Excise Tax in lieu of your state's Surplus lines tax.