Recent Marquee Cases

• Pennsylvania jury awarded $250 million to a former Roundup user and also ordered $2 billion in punitive damages from the company.
• Texas Jury awarded almost $90 million in a wrongful death case that has been in ongoing appeals for over a decade.
• St. Louis jury last week reached a $462 million verdict against trailer manufacturer Wabash National in a case stemming from a May 2019 fatal crash.

Understanding the Magnitude

According to a 10-year study by the U.S. Chamber of Commerce Institute on Legal Reform, nuclear verdicts are becoming more frequent and severe, significantly impacting businesses and insurers.

Key findings from the study include:

• 1,288 reported nuclear verdicts occurred between 2013 and 2022.
• The median size of nuclear verdicts increased from $21 million to $36 million in product liability cases—a 50% rise over the decade.
• The average (mean) nuclear verdict is now $89 million, reflecting the growing trend of extreme jury awards.
• Four states—California, Florida, New York, and Texas—account for 50% of all nuclear verdicts, despite making up only about one-third of the U.S. population.

Understanding the impact of nuclear verdicts is crucial for businesses and individuals alike. By taking proactive steps to manage risk and working with the right insurance provider, you can safeguard your financial stability.

–Ryan Newman, President of TRB Insurance

What’s Behind the Surge in Nuclear Verdicts?

Several factors are contributing to the increase in these large jury awards:

• Changing Jury Attitudes: Today’s juries are more inclined to award large sums, often influenced by media coverage and public sentiment about corporate responsibility.
• Legal Strategies That Increase Payouts: Attorneys use tactics that encourage jurors to award higher damages, such as suggesting extreme settlement amounts as a psychological anchor.
• Increased Lawsuit Financing: Third-party investors fund lawsuits in exchange for a portion of the payout, leading to higher settlement demands and prolonged litigation.
• Expanding Legal Liabilities: Changes in laws and court rulings have made it easier to sue businesses, increasing their exposure to costly litigation.

What This Means for Businesses and Individuals

The financial impact of nuclear verdicts goes beyond the courtroom. It affects your insurance rates, business operations, and even the cost of everyday services:

• Higher Insurance Premiums: As insurers adjust to increased claim payouts, businesses and individuals are paying more for coverage, particularly in auto, business liability, and general commercial insurance.
• Reduced Coverage Options: Insurance companies are tightening underwriting standards, limiting coverage options, and increasing deductibles.
• Increased Out-of-Pocket Costs: For businesses facing litigation, a verdict exceeding insurance limits can mean paying out of pocket, jeopardizing financial stability or the company’s viability.
• Broader Economic Impact: As businesses and insurers absorb these rising costs, the increased expenses often trickle down to consumers in the form of higher prices on goods and services.

How to Protect Yourself

While nuclear verdicts may be unpredictable, there are steps you can take to safeguard your financial future:

• Review Your Insurance Coverage: Work with an experienced insurance provider to ensure you have adequate liability coverage and umbrella policies that protect against large claims.
• Strengthen Risk Management: Implement proactive safety measures, compliance programs, and employee training to reduce the likelihood of liability claims.
• Engage Legal and Insurance Experts: Seek guidance from professionals who can help you navigate complex liability issues and structure your policies accordingly.
• Stay Informed: Understanding industry trends and legal developments can help you make informed decisions to protect your assets.

Beyond Nuclear Verdicts: The Broader Impact of Claims Inflation

While nuclear verdicts dominate discussions, the broader landscape of insurance claims is also experiencing significant cost increases. Claims that once settled for $100,000 are now reaching $300,000. A $500,000 claim today could easily settle over $1 million.

• According to the American Property Casualty Insurance Association, the median personal injury judgment increased 320% in ten years, from $39,300 in 2010 to $125,366 in 2020.
• Additionally, a 2020 study by the American Transportation Research Institute found that the average verdict size for lawsuits involving truck crashes exceeding $1 million rose nearly 970% from 2010 to 2018, jumping from $2.3 million to $22.3 million.

These trends highlight the rapid rise in insurance premiums, making risk management more critical than ever for both individuals and business owners.

Partnering with TRB Insurance

At TRB Insurance, we work with our clients to navigate the challenges posed by nuclear verdicts and rising insurance costs. We provide tailored coverage options and strategic guidance to ensure you’re protected.

“Understanding the impact of nuclear verdicts is crucial for businesses and individuals alike. By taking proactive steps to manage risk and working with the right insurance provider, you can safeguard your financial stability.” – Ryan Newman, President of TRB Insurance

For expert guidance on managing liability exposure and securing the right insurance coverage, contact TRB Insurance today.

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