A New York Supreme Court recently held that Fair Credit Reporting Act (“FCRA”) damages are not punitive in nature and therefore do not fall within the scope of an insurance policy fines and penalties exclusion.  Navigators Ins. Co. v. Sterling Infosystems, Inc., No. 653024/2013 (N.Y. Sup. Ct. July 28, 2015).  The insured, Sterling Infosystems, Inc. (“Sterling”), had tendered a claim for defense costs and indemnity in connection with an underlying action involving alleged violations of the FCRA.  Rejecting the insured’s tender, the insurer, Navigators Insurance Co. (“Navigators”), argued that the statutory damages awardable under the FCRA were punitive in nature and therefore excluded.  While the errors and omissions policy at issue included coverage for “damages,” defined in relevant part as “any compensatory sum,” the policy also excluded “fines, penalties, forfeitures or sanctions.”  On cross-motions for summary judgment, the court considered whether statutory damages under the FCRA constitute a covered compensatory sum, or instead an excluded penalty, and concluded that such damages are compensatory in nature and therefore covered “damages” under the policy.  The court provided three rationales for its decision.  First, the fact that the FCRA permits the recovery of either compensatory or statutory damages, but not both, supports the presumption that they are intended to serve the same purpose.  Second, the statutory damages serve to facilitate litigation in instances in which actual compensatory damages are difficult or impossible to calculate.  And third, the FCRA separately provides for punitive damages.