What happened: A Florida appeals court reversed punitive damages against Federal Insurance Company and its employee over an alleged scheme to collect DNA from a water bottle during a deposition.
Who’s involved: Federal Insurance Company, Chubb, and the Perlmutters in ongoing Palm Beach County litigation.
What’s at stake: Whether the insurer can face punitive damages vicariously for an employee’s alleged intentional misconduct under Florida’s section 768.72.
Why it matters: The court reinforced that vicarious punitive exposure requires proof that a “managing agent” - not just any employee - knew of and condoned the misconduct.
Where it stands: Affirmed in part, reversed in part, and remanded. Not final pending any motion for rehearing.
DNA allegedly taken from a water bottle at a deposition sparked a punitive damages fight that reached the Florida Supreme Court.
Florida’s Fourth District Court of Appeal ruled on October 7, 2026, that Federal Insurance Company cannot face punitive damages for its employee’s alleged role in what the Perlmutters’ counterclaim calls a “DNA theft scheme.” The court also reversed the punitive damages amendment against the employee.
A third co-appellant - the insured who allegedly orchestrated the scheme - was not as fortunate. The court affirmed the order allowing the Perlmutters to pursue punitive damages against him.
The case arrived on remand from the Florida Supreme Court, which in Perlmutter v. Federal Insurance Co., sent it back with clarified standards for when courts should allow amendments to seek punitive damages under section 768.72, Florida Statutes.
The counterclaim alleges the insured enlisted Chubb - a separate corporate division of Federal - and its employee to “form a conspiracy to collect, test, and disclose the Perlmutters’ genetic information without the Perlmutters’ knowledge or consent.” The alleged purpose: “intimidation and retaliation,” including damaging Isaac Perlmutter’s financial connections with Disney.
The court found two independent reasons to reverse as to Federal.
First, the Perlmutters’ vicarious liability theory rested on employee misconduct. With the employee’s amendment reversed, the claim against Federal fell with it.
Second - and this is the piece claims teams should flag - the court held that even if the employee’s conduct had met the bar, the Perlmutters failed to show a “managing agent” of Federal knew of and condoned the alleged misconduct. Under Florida caselaw, a managing agent is not a mid-level employee or claims adjuster. It must be someone at the corporate-president level whose acts can be treated as the corporation’s own.
On the employee, the court found the counterclaim lumped all defendants under the collective label “the Conspirators” without specifying which acts he personally committed with intent to harm the Perlmutters. The evidence also failed to show he had “actual knowledge” that collecting contact DNA from an abandoned object violated Florida’s genetic information statute.
For claims and coverage professionals, the managing agent threshold is the takeaway: an insurer’s vicarious punitive exposure in Florida turns on who inside the company knew, not just what an employee allegedly did.
The ruling is not final pending any timely motion for rehearing. The underlying litigation continues, and no court has ruled on the merits of the allegations.
