If my insurance company wrongfully denies my benefits can I sue for bad faith and get punitive damages? Under ERISA you can’t sue for bad faith and get punitive damages. As a result there’s very little incentive for the insurance companies to treat you fairly when you’re trying to apply for your disability insurance benefits life insurance benefits or your medical insurance benefits that you got as a result of your employment. Under consumer protection laws you can many times get punitive damages when you sue for bad faith. However state consumer protection laws don’t apply to ERISA plans.