Whiten v Pilot Ins Co, License & Financial Gain

wilsonchan18wilsonchan18
in Land.Cases

Hi,

On the Wiki from the titled case, I read the below:
punitive award should not been seen by the insurer as a "License" (no financial gain for insurer)

May I know what does it actually mean?

Thanks and Cheers,
Wilson

Comments

  • grahamgraham

    If the insurer has to pay only a small amount, they won't have incentive to treat their customers better next time. (They would continue treating their customers poorly by denying valid claims if they know there is only a small penalty.) They would see this penalty almost as a "licensing fee" as a normal part of doing business.

    But if the fine is large enough to negatively impact the insurer's profits, then they will have incentive to improve their behaviour. (They would be less willing to deny valid claims because they know there will be a meaningful penalty.)

  • wilsonchan18wilsonchan18

    Oh, it actually means that. Thanks Graham! :)

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