Excess judgment refers to a legal term that refers to a judgment or award in a lawsuit that exceeds the insurance policy limits of the defendant. In such cases, the defendant may be personally responsible for paying the excess amount out of their own assets, beyond what is covered by their insurance policy. This can be financially devastating for the defendant, especially in cases involving significant damages.
Excess judgments can occur in cases where the plaintiff’s damages are substantial, such as in cases of catastrophic injuries or wrongful death, and the defendant’s insurance policy limits are not high enough to cover the full amount of damages awarded. It is important for both plaintiffs and defendants to understand the potential risks and consequences of an excess judgment in a personal injury case.
Examples of Excess Judgment:
Here are some examples of how excess judgments would work:
- Car accident: A driver causes a car accident that results in serious injuries to the other driver. The at-fault driver’s insurance policy has a limit of $100,000, but the injured driver’s damages are assessed at $200,000. The injured driver sues the at-fault driver and is awarded $200,000. The excess $100,000 is an excess judgment.
- Medical malpractice: A patient is injured during surgery due to the negligence of the surgeon. The patient’s damages are assessed at $1 million, but the surgeon’s malpractice insurance policy only covers up to $500,000. The patient sues the surgeon and is awarded the full $1 million. The excess $500,000 is an excess judgment.
- Premises liability: A customer slips and falls on a wet floor in a grocery store, sustaining serious injuries. The store’s liability insurance policy has a limit of $500,000, but the customer’s damages are assessed at $750,000. The customer sues the store and is awarded $750,000. The excess $250,000 is an excess judgment.
In each of these examples, the damages awarded to the plaintiff exceed the amount of insurance coverage held by the defendant, resulting in an excess judgment.