Keosian Law Practice Areas

Punitive Damages & Corporate Misconduct

Holding insurers accountable for egregious conduct

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Overview

In cases where an insurance company's conduct rises to the level of oppression, fraud, or malice, California law permits the recovery of punitive damages. These damages are designed not to compensate the victim but to punish particularly egregious conduct and deter similar behavior in the future—sending a clear message that corporate misconduct will not be tolerated.

At Keosian Law LLP, our Los Angeles punitive damages attorneys have the experience and resources to uncover evidence of systematic insurer misconduct and present compelling cases for substantial punitive awards. We understand that pursuing punitive damages requires meeting a higher evidentiary standard, and we are prepared to conduct the thorough investigation and aggressive litigation necessary to meet that burden.

From our Sherman Oaks office, we represent policyholders throughout the greater Los Angeles area and across California. If your insurance company has engaged in conduct that goes beyond mere negligence—conduct that is oppressive, fraudulent, or malicious—you may be entitled to punitive damages in addition to the compensatory damages for your denied claim or delayed payments.

Types of Egregious Insurer Conduct

  • Systematically denying valid claims as corporate policy
  • Deliberately misrepresenting policy provisions to policyholders
  • Destroying or concealing evidence related to a claim
  • Training adjusters to deny or lowball claims regardless of merit
  • Retaliating against policyholders who challenge denials
  • Ignoring court orders or regulatory directives
  • Knowingly using biased experts to justify claim denials
  • Engaging in fraud or deceit in the claims process
  • Refusing to settle within policy limits despite clear liability
  • Creating unreasonable barriers to prevent legitimate claims from being processed

When Punitive Damages Apply

Under California Civil Code Section 3294, punitive damages are available when the defendant has been guilty of oppression, fraud, or malice. In the insurance context, this means the insurer's conduct must go beyond mere negligence or a reasonable dispute over coverage. Courts examine:

Oppression

Despicable conduct that subjects the policyholder to cruel and unjust hardship in conscious disregard of their rights. Examples include deliberately delaying critical claims knowing the policyholder is in financial distress, or threatening policyholders who seek legal counsel.

Fraud

Intentional misrepresentation, deceit, or concealment of material facts. This includes misrepresenting policy terms, hiding the true reasons for a denial, or fabricating justifications for claim rejection.

Malice

Conduct intended to cause injury or despicable conduct carried out with a willful and conscious disregard of the policyholder's rights or safety. Corporate policies that incentivize claim denials may demonstrate institutional malice.

Importantly, for corporate defendants like insurance companies, punitive damages require proof that an officer, director, or managing agent authorized or ratified the wrongful conduct. Our attorneys know how to use discovery tools to uncover this evidence, including deposing corporate executives and obtaining internal policy documents.

What You Can Recover

In a punitive damages case, you may recover multiple categories of damages:

  • Compensatory Damages: The full value of your denied or underpaid claim, plus any consequential losses.
  • Emotional Distress: Compensation for anxiety, sleeplessness, depression, and other psychological harm caused by the insurer's conduct.
  • Attorney Fees & Costs: Recovery of the legal expenses incurred in fighting the insurer.
  • Punitive Damages: An additional award based on the egregiousness of the insurer's conduct and the insurer's net worth. In significant cases, punitive awards have reached into the millions of dollars.

California juries in the Los Angeles Superior Court have a strong track record of holding insurers accountable with meaningful punitive awards. The threat of punitive damages alone often motivates insurers to offer significantly higher settlements during negotiations.

The Legal Process for Pursuing Punitive Damages

Pursuing punitive damages requires a strategic, methodical approach:

  1. Case Evaluation: We assess whether the insurer's conduct meets the legal threshold for punitive damages during our free initial consultation.
  2. Filing the Complaint: We file a detailed complaint in Los Angeles Superior Court outlining the insurer's wrongful conduct and seeking punitive damages.
  3. Motion for Leave to Amend: Under California Code of Civil Procedure Section 425.13, claims for punitive damages against certain defendants may require a motion to amend, which we prepare with substantial evidence.
  4. Aggressive Discovery: We depose adjusters, managers, and executives. We subpoena internal training materials, claims manuals, and corporate communications revealing institutional misconduct.
  5. Financial Discovery: We obtain the insurer's financial statements to establish appropriate punitive damage amounts—ensuring the award is significant enough to punish and deter.
  6. Trial: We present compelling evidence to a Los Angeles jury, demonstrating why the insurer's conduct warrants punishment beyond compensatory damages.

Why Choose Keosian Law for Punitive Damages Claims

Pursuing punitive damages against an insurance company requires an attorney who is not afraid to take on corporate giants. Here is what sets Keosian Law apart:

  • Trial Experience: We have tried complex insurance bad faith cases before juries in Los Angeles and throughout California. Insurers know we will go the distance.
  • Investigative Resources: We invest in the forensic investigation necessary to uncover corporate misconduct—reviewing thousands of documents and deposing key executives.
  • Deep Legal Knowledge: Our attorneys understand the nuances of California punitive damages law, including the evidentiary standards and procedural requirements unique to these claims.
  • Contingency Representation:No attorney fees or costs unless we recover for you.
  • Local Presence: Based in Sherman Oaks, we are deeply connected to the Los Angeles legal community and experienced before the judges in the Van Nuys Courthouse East and the Stanley Mosk Courthouse downtown.

If your insurance company has acted with oppression, fraud, or malice, do not let them escape accountability. Contact our experienced attorneys today for a free case evaluation.

Frequently Asked Questions

Find answers to common questions about our legal services and processes.

Punitive damages are monetary awards designed not to compensate the victim but to punish the insurance company for egregious misconduct and deter similar behavior in the future. Under California Civil Code Section 3294, punitive damages require proof that the insurer acted with oppression, fraud, or malice. These awards can be substantial—sometimes millions of dollars—and are in addition to any compensatory damages.

California does not set a fixed formula for punitive damages. Juries consider the reprehensibility of the insurer's conduct, the ratio between punitive and compensatory damages (the U.S. Supreme Court has suggested single-digit ratios are generally appropriate), the insurer's financial condition, and any prior similar misconduct. For large insurance companies, significant punitive awards may be necessary to serve as an effective deterrent.

Punitive damages require 'clear and convincing evidence'—a higher standard than typical civil cases. Key evidence includes internal corporate documents showing policies that encourage claim denials, communications revealing knowledge of wrongful conduct, patterns of similar bad faith behavior across multiple claims, evidence that executives authorized or ratified the misconduct, and prior regulatory sanctions or lawsuits for similar conduct.

Yes, any insurance company—regardless of size—can be subject to punitive damages if their conduct meets the legal standard. However, larger insurers are more frequently targeted because their systematic practices affect more policyholders and they have greater financial resources, meaning larger awards may be needed to serve as an effective deterrent.

Yes, unlike compensatory damages for physical injuries (which are generally tax-exempt), punitive damages are considered taxable income by both the IRS and California's Franchise Tax Board. We advise clients to consult with a tax professional regarding the tax implications of any punitive damage award.

While not awarded in every bad faith case, punitive damages are pursued when the insurer's conduct is particularly egregious. California courts have historically been willing to impose substantial punitive damages on insurers that engage in oppressive or fraudulent practices. The possibility of punitive damages significantly strengthens settlement negotiations, as insurers prefer to settle rather than risk a large jury verdict.
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"After our basement flooded, our insurance company offered only a fraction of what was needed. Keosian Law stepped in and negotiated a settlement that covered everything."

Michael J.

Sherman Oaks, CA

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