Can insurance protect plans against punitive damages?
By Susan R. Huntington Since the recent $120 million jury award in California against Aetna U.S. Healthcare, I have gotten a number of calls from insurance brokers working with HMOs, asking, “Do I have coverage for these types of claims? If not, can I get it?” What they want is protection against punitive damages but, unfortunately, there is no simple answer to their questions. Aetna U.S. Healthcare, in fact, is suing six of its liability insurers just to find out who pays what. There’s a lot at stake: more than $76 million in coverage, by some estimates. Although punitive damage awards are relatively rare (less than 6 percent of winning plaintiffs get punitive damage awards according to recent U.S. Department of Justice statistics), most punitive damage verdicts soar to the level of millions of dollars — large multiples of the amount of the actual or compensatory damages. Punitive damages is the money usually awarded by a jury that is above the amount required to compensate an injure
