Posts Tagged ‘punitive damages’

$18.5 Million Sex Abuse/Molestation Verdict

Boy Scouts lose with huge punitive damages awarded

An Oregon man was awarded an $18.5 million jury verdict against the Boy Scouts of America organization. The ruling cited reckless and outrageous conduct in allowing an assistant scoutmaster to participate after admitting to a scout official that he had previously molested 17 other boys.

Evidently the compensatory dBoy Scouts lose molestation caseamages that were awarded amounted to $1.4 million and the punitive damages were $17.1 million. This verdict was only against the national Boy Scouts organization and does not include potential damages against local councils and other individual defendants.

This verdict should serve as a wake-up call to youth sports and recreation organizations to shore up their risk management plans. It also illustrates the need to carry high limits of General Liability coverage, including coverage for sex abuse and molestation and punitive damages.

Current Sadler Sports & Recreation clients can take advantage of our free risk management videos on abuse/molestation  awareness and prevention training, as well as our abuse/molestation risk management plan template.

Source: Associated Press Release

Punitive Damages Exclusion in General Liability Insurance

State laws determine whether punitive damage are insurable

The punitive damages exclusion on a General Liability policy can have a devastating effect for sports teams, leagues, recreation departments, camps, etc. and their directors, officers, employees, and volunteers. General Liability policy forms containing this exclusion should be avoided since coverage for punitive damages is generally available in the market place.

States determine laws on punitive damagesMost lawsuits that arise in the sports and recreation context for participant and spectator injuries ask for punitive damages in addition to regular compensatory damages. This is why the lawsuit documents use such high-voltage words such as wanton, willful, grossly negligent, acting with reckless disregard for the safety of others, etc. to describe the wrongful conduct Punitive damages are meant to punish the wrongdoer by making an example out of them to others.

Since most lawsuits ask for punitive damages, it makes sense that coverage for them is desirable in order to reduce the worry factor.

Punitive damages may not be insurable in some states as such coverage may be considered a violation of public policy. Various state statutory codes that limit coverage for punitive damages often distinguish between directly-assessed punitive damages and vicariously-assessed punitive damages. Directly-assessed punitive damages are awarded directly against the wrongdoer. On the other hand, vicariously-assessed punitive damages are assessed against a defendant who was not directly negligent but instead had liability imputed under agency principal law. For example, a corporation may be vicariously liable for the acts of its employees.

The following states have laws that limit the insurability of punitive damages that are directly assessed against the defendant:













New Jersey

North Dakota

New York





Rhode Island




The following states have laws that limit the insurability of punitive damages that are vicariously assessed against the defendant:

 New York




 A number of states are currently undecided on the issue of insurability of punitive damages.