Insuring Statutory Damages

The original intent of the statutory damage could be described as a way for a plaintiff to have some level of recovery after being wronged in situations where it is difficult to provide evidence of the amount of the injury.  Now, the extent of the current statutory damage’s reach appears to be broader than that, turning what was once perhaps designed as mere compensation to more of a penalty in amounts that can be difficult to qualify or manage for the defendant.  Jones Day offers a summary of the popular types of statutory damages and their effects in today’s litigation. In their article, they suggest “statutory damages now have a life of their own.” 

Are the threats of statutory damages insurable?  For the professional liability insurance world, it varies by the type of the statute and the services the policy is designed to cover.   Generally, look first at the definition of damages.  If you find an exclusion for punitive, exemplary or multiplied damages, then it raises some doubt about the coverage for statutory damages.  In addition, check for exclusions relating to the statutory damage statutes such as exclusions for violations of consumer protection laws.