What do Nuclear Verdicts Mean for Fleets and the Fleet Insurance Ecosystem?

Upward-trending nuclear verdicts should be very concerning to the entire fleet insurance ecosystem around commercial auto/trucking, in addition, of course, to the fleet itself. Across the country, we are clearly seeing a tremendous increase in negative financial judgments, often with settlements and verdicts not reflective of evidence in the case.

So what exactly are nuclear verdicts? The nuclear verdict definition encompasses an exceptionally high jury award beyond a rational amount, typically exceeding $10 million. A commercial vehicle auto accident does not even have to involve a specific safety violation as plaintiff attorneys now aggressively create a “reptile theory”, seeking to paint an overall picture of fleet corporate irresponsibility in trucking litigation


nuclear verdicts


From Fleet Owner, August 2021, Steve Bryan —

“These trial lawyers and their beloved reptile theory get to the emotion and the inflammation of anger in the jury to punish the motor carrier,” Bryan stressed. “It is rarely about the specific incident of that crash. The crash is simply an opportunity for the plaintiffs, with their private equity backers, to open those doors and convince juries that you have a terrible, unethical corporate citizen here and that the only way we’re going to get them on track is to punish them, punish them, punish them.”

The bottom line on the impact of nuclear verdicts and the reptile theory approach in truck accident litigation  on insurance is that, at best case, your fleet is going to pay a lot more for insurance in the future, find excess and reinsurance costs greatly increased, and have to absorb a much higher deductible.  At worst case, you will be subjected to the reality of nuclear verdicts, facing a financial reality that often leaves no other option than putting the fleet out of business.  

Plaintiff attorneys are clearly on the lookout for fleets that are not taking responsible steps to avoid accidents through the use of proven, reasonably priced solutions.  They seek to paint a picture of the fleet just seeking a minimum level of safety compliance when litigating truck accident cases, with the ultimate conclusion being to question if the fleet really cares about preventing accidents.

How big are these “Nuclear Verdicts”?

Most recently in Florida, two trucking companies both bore liability for a $1 billion dollar verdict.  Traffic on a freeway was stopped when one truck (driver admitted cell phone distraction) overturned his vehicle.  The accident ultimately contributed to another accident that lead to the loss of life to one driver who was stationary in the resultant traffic jam.  A second trucker had slammed into this vehicle stopped on the freeway, applying his brakes only 1 second before the high speed impact.  This at-fault rear end collision is the obvious fingerprint of distracted driving, also commonly involving cell phone misuse.

While a financial award was clearly in order with clear fault associated with both companies, the magnitude of the award simply put the two trucking companies out of business.  Another verdict  emphasizes the extent of nuclear trucking verdicts even when the fleet driver did nothing wrong.

One of the largest stemmed from a 2014 crash in Odessa, Texas, involving Werner Enterprises. During a winter storm, the driver of a pickup truck lost control and crossed the median, striking a tractor-trailer head-on. The accident killed a 7-year-old passenger and seriously injured three others. The family successfully sued and was awarded $90 million. The case is currently under appeal. 

“If an accident like this is the fault of the driver who was hit by the out of control vehicle, think about what that means for every motorist on the roads,” Werner Enterprises said in a statement.

“In most states there’s a disconnect between your level of negligence and your level of liability,” said Dan Murray, senior vice president of the  American Transportation Research Institute. “There are states where you can be identified as 10% or 15% negligent and still be vulnerable for 100% of the financial liabilities.”

What is the effect of a huge Nuclear Verdict?

Whether or not the fleet is even involved in an accident, the huge negative verdicts we are commonly seeing now, lead to the following:

  •       Greatly increased insurance premiums for fleets
  •       Higher fleet insurance deductibles, self insured retentions for fleets (fleets take on more financial risk)
  •       Greatly increased costs for reinsurance and excess coverage as this layer of coverage can now be hit with more frequency and must be priced accordingly
  •       Greatly increased likelihood of fleet or captive going out of business as available insurance coverages are not sufficient to cover awards
  •       Departure of many insurers from fleet/transportation coverage

What is the answer for fleets to avoid Nuclear Verdicts?

Commercial fleets face a grim future of fewer insurance options at higher prices while being exposed to the threat of negative verdicts that may significantly exceed the amounts that they are actually insured for. While professional onboarding, testing, training, fleet safety technology should be applied to the fleet’s efforts to control risk exposure, the specific problem of cell phone distraction is a clear example of risk exposure that must be addressed.  

Cell phone misuse has become the poster boy for negative financial judgements. Note how many large awards are based on driver distraction. Twenty percent of commercial vehicles will have an accident in the next 12 months. Twenty five percent of those accidents will involve cell phone distraction. Managing cell phone distraction with proven, reasonably priced technology, has become a “must have” in the fleet’s approach to avoiding large legal losses. 

For fleets, captives, insurers, brokers, excessive coverage suppliers and reinsurers, it is becoming more critical to use or incentivize/mandate available and proven technology to manage exposure to risk.  The problem begins first with a fleet driver who is guilty of unsafe driving practices but ultimately also extends to the overall approach of the fleet in addressing safety issues.

About Alan Mann

Driver risk scoring/coaching/cell phone distraction avoidance/driver behavior expert.
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