Austin: (512) 562-7000
Midland: (432) 755-0990

A word on punitive damages

In some personal injury cases, there is an element of damages called punitive damages. 

What are they?

Punitive damages are unique in that they do not arise from the injured person’s loss.  Instead, they arise from the person’s conduct who caused the injury.  Punitive damages are meant to punish defendants who have acted purposely, maliciously and/or with gross indifference.

Generally, most accidents resulting in injury do not involve punitive damages.  However, for example, in an automobile accident, punitive damages can arise if the defendant was driving while under the influence of drugs or alcohol.  Other examples that may give rise to punitive damages would be a driver operating a vehicle without a license; a truck driver knowingly driving without the required amount of rest; loaning your vehicle to someone you know to be impaired; or knowingly operating a vehicle that had a serious mechanical malfunction.  While this is not an exhaustive list, it gives you an idea of the difference between a common automobile accident and one that may give rise to punitive damages.

Not all defendants are punitive damage targets

An important aspect of punitive damages is that punitive damages are not covered by insurance.  Punitive damages are intended to punish bad behavior.  If insurance covered punitive damages, then the bad actor would not be punished, his/her insurance company would be.  Therefore, paying punitive damages is solely the responsibility of the defendant wrongdoer.  However, many times, defendants who face punitive damages are judgment proof; damages cannot be collected from them because they have no assets.  In those cases, Plaintiffs can only recover their normal damages of compensatory and non-economic damages.

However, even in cases that involve insolvent defendants, all is not lost.  Generally, insurance companies will pay more in bodily injury settlements in cases that have a punitive damages aspect.  They do that for two reasons: 1) in cases involving punitive damages there can be a tendency for juries to award higher amounts of compensatory damages and pain and suffering damages because the jury becomes upset with the Defendant’s bad behavior; and 2) the insurance company has a fiduciary duty to their insured to resolve a lawsuit against the insured for within the policy limits.  While the insurance company has no duty to pay punitive damages, they will often pay extra in settlement for the underlying bodily injury claim in order to prevent their insured from facing the personal exposure of punitive damages.

Contact us

If you believe that you have a case involving punitive damages or any other case, please contact us.

Locate Us

Ely & Reed

p Austin: (512) 562-7000
pMidland: (432) 755-0990

Email Us

From (Email Address):
Hello, my name is I am interested in scheduling an appointment with Ely & Reed and would like to receive information about
Please call me at at your earliest convenience. Thank You!