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Bad Faith Conduct, Managing Agent Decisions Justify Punitive Damages

Jul. 31, 2019

When insurers act in bad faith, California law permits insureds to recover punitive damages if the insurer’s conduct is egregious enough to constitute oppression, fraud, or malice. See Cal. Civ. Code Section 3294(a).  Punitive damages are awarded “for the sake of example and by way of punishing” an insurer that acts in bad faith, id., and awards of punitive damages can often well exceed the amounts that the insurer otherwise owes under the contract. See, e.g., Mazik v. GEICO Gen. Ins. Co., 35 Cal. App. 5th 455, 462-65 (2019) (affirming award of punitive damages totaling approximately three times amount of compensatory damages award); Amerigraphics, Inc. v. Mercury Cas. Co., 182 Cal. App. 4th 1538, 1566 (2010) (punitive damage award equaling 3.8 times amount of compensatory damages).  Full article at 190731 LADJ- Insurer Managing Agents and Punitive Damages

Shaun H. Crosner
Named to The Best Lawyers in America list for work in insurance law (2021 - Present)

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