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Combatting The Rise of Nuclear Verdicts in the Transportation Industry

Safety directors and fleet managers have a lot of weight on their shoulders when it comes to screening and hiring the right drivers, implementing safe operations and establishing a strong culture of safety across their fleet.

With the increase in driver risk and the growing threat of nuclear verdicts year after year, their success in their role becomes more critical to proactively protect their drivers, brand and bottom line.

Download Now | From Crisis to Control: Protecting the Commercial Auto Insurance Ecosystem 

An Increase in Crashes Involving Large Trucks

Large trucks are characterized by NHTSA as both commercial and non-commercial trucks with a gross vehicle weight greater than 10,000 pounds.

In 2020, there were a reported 4,444 truck-involved fatal crashes and 101,000 incidents involving injuries. The number of fatal crashes involving large trucks that year amounted to 13.49 crashes per million people in the U.S. – a 27% increase from 10.60 in 2010.

In 2021, fatalities in crashes involving large trucks rose 13%. This was the highest number of fatalities since 2005 and the largest annual percentage increase in the Fatality Analysis Reporting System’s history.

This paired with an overall rise in driver risk across the nation is inevitably increasing a company driver’s chances of being involved in a crash and expensive claim.

The Rise in Nuclear Verdicts for Trucking

A nuclear verdict is a large verdict, oftentimes in excess of $10 million.

The size of verdicts has increased over time by a relatively large amount, regardless of the factors of the crash. Cases with awards over $1 million have increased dramatically over the last 14+ years. From 2010 to 2018 specifically, the average verdict for truck crashes increased 1000%, from $2.3 million to a shocking $22.3 million.

Nuclear verdicts substantially impact motor carrier operations, resulting in bankruptcy filings and higher insurance premiums. A particular motor carrier publicly reported an increase in a single year’s insurance rates from $340,000 per year to $700,000 per year – more than 100% of their initial rate. This cost increase ultimately forced the motor carrier out of business.

So what are the factors that are influencing these larger verdicts? American Transportation Research Institute (ATRI) interviewed a number of subject matter experts for its 2020 study, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry.” The study breaks the influencing factors down into six categories:

  • Prevention
  • Crash-related details
  • Post-crash/pre-litigation stage
  • Litigation strategies
  • Unfavorable practices
  • Additional factors

The factor we want to focus on in more detail in this blog is “prevention.”

Preventing Nuclear Verdicts

Many of the experts ATRI interviewed offered responses with variations of, “The only way to prevent nuclear verdicts is to prevent the crash from happening in the first place.” Interviewees stated that the more safety activities motor carriers are engaged in to prevent crashes, the lower the likelihood that a nuclear verdict will result.

They also noted that many motor carriers don’t allocate enough resources toward safety and crash prevention. So, what does this mean for companies facing litigation?

Juries tend to be less forgiving when plaintiffs can document that reasonable steps to prevent a crash could have been taken, regardless of the trucking company’s compliance with Federal Motor Carrier Safety Regulations (FMCSR). FMCSRs are typically framed as minimum standards.

But, if defense attorneys can document that a company was involved in safety activities that exceed FMCSRs, it can carry great weight with juries.

The best way to establish an added layer of protection is by establishing and enforcing a strong driver safety program – one that includes a well-crafted (and enforced) safety policy, frequent driver training, intervention strategies and more. These proactive safety measures showcase a company’s dedication and legitimate efforts to minimize risk across its entire driver population.

Proactive Steps to Avoid Litigation

fa strong defense may help companies dodge a nuclear-sized verdict, an effective risk management strategy can get to the root of the issue and address poor driving behavior before a crash and an expensive claim even occurs. In this white paper we explore the causes and repercussions of nuclear verdicts, their impacts on the commercial auto insurance industry and how a driver safety program can help policyholders and their carriers protect themselves. Click the link below to download now.

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