Nuclear Jury Verdicts and Insurance Protection

The rise of “Nuclear” and “Thermonuclear” jury verdicts in recent years demonstrates that no business or individual is totally immune from civil lawsuits that weaken or destroy traditional business arrangements.

“Nuclear Verdicts” are defined as those that surpass $10 million.

Extensive research by Marathon Strategies, an independent communications and research firm, states that “2024 was the biggest year yet for supersized verdicts against companies. 135 lawsuits against separate defendants resulted in a nuclear verdict, a 52% increase over 2023. The total amount of these verdicts reached $31.3 billion, a 116% increase over calendar year 2023.”

This suggests that juries now tend to punish defendants for alleged wrongdoing by significantly impacting their financial standing.

Products liability and intellectual property claims are the two leading categories in both size and frequency. However, motor vehicle incidents, wrongful death, workplace negligence or safety claims, and other areas are also contributing factors. No type of business is immune from traditional manufacturers to contractors and all other types of business entities.

On a positive note, the good news for Fedeli Group clients is that many of the risks faced by our loyal client base are insurable through our extensive network of “top tier” insurance carriers in the standard markets. These include Chubb Group, The Cincinnati Insurance Company, Travelers, Zurich, AIG Companies, Global Aerospace, Westfield, and many others.

Proper risk management techniques and the selection of higher amounts of insurance protection allow Fedeli Group clients to transfer liabilities from their corporate balance sheets to the well-funded balance sheets of top insurers. This includes potential damage awards and legal defense costs, which, in some policies, are paid in addition to damages and are unlimited. The key is to select the appropriate limits of protection.

FACTORS AFFECTING JURIES

It is important to identify the issues influencing juries: corporate mistrust, social pessimism, the erosion of tort reform, and public desensitization to large financial figures are all contributing factors. Additionally, there is a growing distrust of corporations and professionals, with a prevailing sentiment to hold them accountable.

Jury pool demographics are also shifting. A higher percentage of jurors are now millennials and Gen Z individuals, many of whom believe they know more than the expert witnesses, or even the judge, at trial. This trend has led to “apportioned” verdicts, ones that may not favor the plaintiff but still place blame on the defendants.

HOW TO PROTECT YOUR BUSINESS AND PERSONAL ASSETS

For business and corporate concerns, allow The Fedeli Group to conduct a preliminary risk management assessment to identify separate risks within your industry and your individual business. Then, The Fedeli Group can benchmark your industry and organization based on financial size and net worth.

Simultaneously, you should evaluate your company’s net worth by thoroughly reviewing your corporate financial statements, including all entities on a comprehensive, global basis. Mature businesses are especially vulnerable to loss, as they often have more to protect—and more to lose.

Finally, select an appropriate amount of insurance protection, whether globally or by individual risk category, to build a high-limit insurance program with The Fedeli Group’s guidance.

From a personal standpoint, the process is similar. Start by identifying your risks: Do you have a swimming pool? A trampoline? Popular recreational vehicles like electric bicycles, scooters, or ATVs? Then, a comprehensive review of your personal assets and liabilities will help determine your level of exposure. Our team of corporate advisors and personal lines experts can help you design a tailored risk management and insurance strategy that fits your needs. Contact us today.