Nuclear verdicts are now a concern of almost all forms of insurance in various markets. Nuclear verdicts entail an enormously high amount given to a plaintiff by a jury, often beyond logic and fairness. They usually exceed the $10 million mark and can even go higher.

The Impact of Nuclear Verdicts

In 2019, jury awards ranged from an incredible $2.6 million to $17 million and have grown since then. Talking of specific sectors, there has been a sharp rise in nuclear verdict cases relating to the trucking industry. Pharma, construction, and manufacturing are also in the firing line with a growing number of such verdicts being handed down.

Let’s look at some examples from recent years that illustrate the effects of nuclear verdicts:

One striking example in Texas involved a pickup truck driver who collided with a tractor-trailer. The FTS International Services were ordered by the jury award to pay $101 million but later reduced it to settle at $32 million.

During the winter of 2014, an awful snowstorm caused a collision between a truck and an enterprise trailer. Tragically, the child who was in the truck when it happened died instantly upon impact. However, Werner Enterprises was sued for $90 million in damages even though it was the other driver’s fault.

Another case involved a girl who was assaulted by a private security guard working at her apartment complex. The company had claimed to have done all required background checks as per law and even argued that human behavior cannot be predicted. The family was awarded with 1 billion dollars in damages and other awards.

Following one of these instances, a motorcyclist in Florida received $411 million in damages after being involved in an interstate pileup.

The impacts of nuclear verdicts on businesses

Although it is just and right for businesses to make amends and pay fairly when they are at fault, there is a gray area sometimes where businesses are exploited and expected to cough up amounts that would cripple them financially. There can be tremendous financial strain. Many of these businesses end in bankruptcy protection. Additionally, the damage to reputation and loss of consumer trust can have more long-lasting effects even if one survives the financial struggles of their business. Nuclear verdicts can be a major blow to future sales, partnerships, and opportunities. The trucking industry, manufacturing sector, healthcare, and real estate top the list of industries high on the vulnerability scale towards nuclear verdicts.

How to protect your small business from a nuclear verdict

As a manager of a small business, you would want to do everything possible so as not to lose anything in terms of your commercial enterprise, assets as well as people. Here are the minimum covers you should consider :

It is important that your business has general liability insurance which covers you against bodily injury claims, property damage or accidents inside the workplace. In case you have this cover and one of your employees gets injured in the workplace, the costs of their treatment will be met by the policy, and he/she cannot sue you for it. Without it, the employee could rightly file a lawsuit that could escalate into a massive award against you.

If your company is involved in a lot of logistics and uses cars or other vehicles to transact its business dealings, then commercial auto insurance may be required for you. This cover protects you from loss or damage caused to your vehicle in an accident, damage to other people’s property that happens during an accident as well as liability and medical expenses arising from such accidents.

An umbrella liability plan goes beyond conventional liability or commercial auto insurance policies just like its name suggests; it provides additional protection from various lawsuits which safeguards businesses.

Product liability insurance is intended to safeguard your enterprises against complaints from individuals who assert that the products or services produced or sold by your firm resulted in injuries, damages, or loss of property. Such insurance will cater for legal charges and compensations as a result of litigation.

Professional liability (errors and omissions) is meant for organizations whose mistakes lead to a financial loss. It protects them against their clients’ claims made due to the client’s fault, negligence, bad piece of advice, or failure to meet the client’s standards.

Directors and officers’ insurance insulates directors and officers in an organization from lawsuits filed against defamation, mismanagement, and fraud among other criminal activities.

Nuclear verdicts have averaged around $36 million in the last ten years alone; so if you want to protect yourself and your business from nuclear claims that are very real, reach out to us.