March 20, 2008

Insurance for Punitive Damages?

David Johnson writes about the recent Texas Supreme Court opinion in Fairfield Insurance Co. v. Stephens Martin Paving, LP which paves the way for at least some punitive damages to be insurable. Johnson contends that the opinion does not mean all punitive damages are insurable: "In Fairfield, the Court once again expressed language that would favor the enforcement of punitive damage insurance agreements where the insured was a business, but the opinion also contained language that would not have favored the enforcement of the same provisions against individual insureds. One could glean that the Court is continuing to follow its recent trends against equitable/policy arguments trumping express insurance provisions and in continuing to side with business insureds against insurers but not so much for individual insureds." We previously blogged about this case here.