Quick answer: In June 2026 the Florida Supreme Court lowered the evidence plaintiffs must show early in a lawsuit to pursue punitive damages. For Florida businesses, that means punitive exposure, and the settlement pressure that comes with it, can surface sooner. Punitive damages are generally uninsurable in Florida, so your best protection is strong liability limits, good claims practices, and early legal counsel.
Key Takeaways for Florida Business Owners
- The Court’s June 11, 2026 decision in Perlmutter v. Federal Insurance lowered the early-stage evidentiary bar for punitive damages claims.
- Defendants may face earlier discovery into their financial worth, which can increase settlement leverage for plaintiffs.
- Punitive damages remain uninsurable under Florida policies and are statutorily capped at three times compensatory damages.
- Compensatory exposure still sits on your general liability, commercial auto, and umbrella policies, so limits matter.
What Did the Florida Supreme Court Decide?
As reported by Insurance Journal, the case grew out of a dispute in which former Marvel Entertainment head Isaac Perlmutter sued his Palm Beach neighbor. A jury returned a $50 million verdict in November 2025 against the defendant and Federal Insurance Co. In its June 11, 2026 ruling, the Court held that plaintiffs do not have to meet the trial-level “clear and convincing evidence” standard just to proceed with a punitive damages claim early in litigation. Trial courts still act as gatekeepers, but they only ask whether reasonable evidence supports the claim.
Why This Matters Even If You Are Not a Neighbor in Palm Beach
Although the dispute was personal, the rule applies to Florida civil litigation broadly, including claims against businesses after a serious injury, a vehicle crash, or a property incident. Defense attorney Brett Carey told Insurance Journal that insurers must be more vigilant in identifying cases with punitive damages potential and plan aggressive dispositive motions early. For a business owner, the practical effects can include:
- Earlier financial discovery: Once a punitive claim is allowed to proceed, a plaintiff may seek information about the company’s net worth sooner.
- Settlement pressure: Uninsured punitive exposure can push defendants to settle cases they might otherwise fight.
- Tension with your carrier: Because punitive damages are not covered, your interests and your insurer’s can diverge. Understand your policy’s reservation-of-rights process.
How to Protect Your Florida Business
- Review your liability limits. Compensatory damages in a large verdict can exceed a primary policy quickly. See how low commercial auto limits can bankrupt a business.
- Add or increase umbrella coverage. An umbrella or excess policy sits above general liability, auto, and employer’s liability.
- Document safety and training. Written procedures, inspections, and incident records help show reasonable care.
- Report incidents quickly. Late notice can complicate coverage.
- Call counsel early on serious claims. Ask about punitive exposure at the outset, not after discovery begins.
- Revisit coverage structure at renewal. Market conditions are shifting; read our overview of Florida commercial insurance trends for 2026.
Related Florida Risk Lessons
Large losses often expose coverage gaps. Our look at Surfside’s insurance gap shows how structure and limits shape outcomes after a catastrophic claim.
Frequently Asked Questions
Are punitive damages covered by business insurance in Florida?
Generally no. According to Insurance Journal’s reporting, punitive damages remain uninsurable under Florida policies, and they are capped by statute at three times compensatory damages.
What did the Florida Supreme Court change in 2026?
It lowered the evidence required at the early stage for a plaintiff to move forward with a punitive damages claim, rather than requiring the “clear and convincing” standard needed at trial.
Does an umbrella policy help with punitive damages?
An umbrella helps pay compensatory damages above your primary limits. It will not typically pay punitive awards, so risk management and early counsel remain important.
How much liability insurance should a Florida business carry?
It depends on your industry, contracts, fleet, and assets. A licensed agent can benchmark your limits against your exposures.
Talk to Highlight Risk Services
Highlight Risk Services helps Florida businesses stress-test liability and umbrella limits before a claim happens. See what we do or contact our team for a liability review.
This article is for general information only and is not legal or insurance advice. Consult a licensed Florida attorney and insurance professional about your situation.