Punitive Damages Amendments

Changed the standard for holding an employer liable for punitive damages from a general prohibition to specific requirements proving the employer was willful, malicious, reckless, or ratified the employee's actions.

Added a new subsection stating that the bill's provisions apply only to claims arising on or after the effective date of May 6, 2026.

Added a reference to Section 63G-7-603, which generally limits the liability of state and local government entities.

Reformatted the underwriting limitations section to use a consistent list style for the types of risks insurers cannot insure against.

Removed the Chief Sponsor's House Sponsor name, which was left blank in the new version.

Condensed the 'Highlighted Provisions' list by removing references to death-injury exceptions, specific dollar caps, and rules about jury instructions.

Replaced the detailed list of bill provisions with a brief statement that the bill makes 'technical changes' alongside the insurer and employer liability rules.

Added a new section establishing a cap on punitive damages (generally 2x compensatory damages up to $2.5M, or 4x up to $5M for specific acts) with an exception for injuries resulting in death.

Added a prohibition on courts disclosing the punitive damage cap to juries during instructions.

Added a legislative finding that punitive damages unduly burden the economic and personal welfare of Utah residents.

Updated the bill title and header to reflect the new substitute version and removed the House Sponsor name.

Insurers are now strictly prohibited from considering the likelihood or exposure to punitive damages when underwriting policies, setting rates, or classifying risks.

A new rule establishes that employers are generally not liable for an employee's punitive damages unless the employer itself acted with willful malice or reckless disregard for safety.

The liability exception for employers explicitly includes cases involving drunk driving or drug-impaired driving.

The document format was updated from a raw amendment excerpt to a formal substitute bill structure with a long title and general description.

The effective date of the bill was changed from May 6, 2026, to February 23, 2026.

A new requirement was added stating that the new punitive damages provisions are subject to Section 63G-7-603, the state's general immunity statute.

Added provisions preventing insurers from refusing coverage or adjusting premiums based on the risk of punitive damages.

Added rules allowing courts to award punitive damages against employers only if they authorized the misconduct or acted recklessly in hiring the employee.

Modified the punitive damages cap for motor vehicle cases to include a $200,000 floor and specific calculations based on economic and noneconomic damages.

Added a new definition for 'managing agent' to clarify who can be held liable for employee misconduct.

Added an effective date of May 6, 2026, for the new provisions.