Section 8.46 Sanctions

• Library: Insurance Practice 2015

Coverage for sanctions can be a difficult issue. Carriers have attempted to exclude coverage for sanctions through either an exclusion or a definition of damages that provides that sanctions are not a “covered damage.”

The rationale for not providing coverage is based on public policy concerns. Some jurisdictions will not allow an insured to obtain insurance coverage to pay punitive damages or sanctions.

A difficulty has arisen as a result of the 1983 amendments to Rule 11 of the Federal Rules of Civil...