We are often asked by our clients whether they can punish the insurance company or take actions to make sure the insurance company will not engage in the same conduct toward others. Generally, punishing a wrongdoer in Wisconsin is reserved for criminal cases (cases where a defendant has been charged with a crime). Insurance companies are rarely charged with crimes. But, in limited circumstances, policy holders may be given a chance in a civil case to ask that a jury punish an insurer and impose a penalty sufficient to deter the insurance company to refrain from misconduct.
The remedy is punitive damages. These are damages that jury may award to punish and deter bad conduct by an insurance company (or other wrongdoer). According to Wisconsin law: “The plaintiff (policy holder) may receive punitive damages if evidence is submitted showing that the defendant (insurance company) acted maliciously toward the plaintiff or in an intentional disregard of the rights of the plaintiff (policy holder).” Wis. Stat. § 895.043. This standard has been the subject of much debate. Policy holders often believe the standard is too difficult while insurers believe it is too easy to meet.
Importantly, a judge ultimately determines whether a policy holder may even request punitive damages from a jury. The judge acts as a gatekeeper.