Insurability of Punitive Damages

Insurance-Certificate-Glasses_15701162As a matter of public policy, Pennsylvania (like a number of other states) prohibits insuring against punitive damages.  But what happens if an insurer refuses to settle a case against a policyholder within policy limits and the policyholder then sustains an award of punitive damages?  That was the question decided by the Third Circuit in Wolfe v. Allstate Property & Casualty Insurance Co.
Continue Reading Third Circuit Holds That Under Pennsylvania Law An Insured Against Whom Punitive Damages Have Been Imposed May Not Recover Those Punitive Damages As Compensatory Damages In Bad-Faith Action Against His Insurer