$23.8 million.
That’s the median nuclear verdict size in 2023, according to research published by the Institute of Legal Reform (ILR). And while this number is staggering, the phenomenon of even larger ‘thermonuclear’ verdicts is beginning to trend.
What are thermonuclear verdicts? These are verdicts against corporations that exceed $100 million—surpassing the $10 million damage award of nuclear verdicts. In 2023, 27 courts awarded thermonuclear verdicts to plaintiffs, and research by Marathon Strategies indicates that juries are poised to award more in the future.
This trend underscores a significant threat to insurers’ profitability. Insurance carriers seek solutions that will address these concerns in tangible ways as the severity of claims, social inflation and jury politics continue to influence reward amounts.
Telematics data—accessible and readily available to insurers—can profoundly impact their ability to predict and assess risk that might result in a nuclear verdict, driving data-forward underwriting risk assessments that may lead to profitable growth.
What you'll read:
Leverage Data to Empower Underwriting
Why Nuclear Verdicts Are Going Viral
Telematics and Thermonuclear Verdict Prevention
Innovating and Adapting for a Profitable Future
Leverage Data to Empower Underwriting
Insurers underwrite customers based on the expected cost of known risks—location, mileage, business industry, vehicle type and maintenance, etc. When a nuclear verdict occurs, it introduces unexpected costs that may exceed a reasonable compensation (more on that later). These costs result in social inflation and leave insurance companies—particularly those of commercial fleets—to navigate a complex and evolving risk landscape. From 2013 to 2022, auto accidents involving commercial trucks had the second-highest share of nuclear verdicts (23.2%), making the commercial auto market susceptible to future nuclear and thermonuclear verdicts.
“1 in 4 auto accident trials that resulted in a verdict of $10 million or more involved a commercial trucking company.”
– Institute of Legal Reform, Nuclear Verdicts Study, pg. 8
During the underwriting process, this data can play a pivotal role by filling information gaps to help identify high-risk outliers. Predictive data can also:
- Enable insurers to build better risk profiles through a combination of historical and more real-time behavioral driving data, like telematics.
- Identify patterns and predict the likelihood of a claim and its severity through vast datasets—allowing insurers to price premiums more accurately.
- Unburden teams with administrative work and streamline data collection to drive efficiency of the underwriting process.
- Reduce premium leakage and underwriting fraud by validating mileage, garaging and areas of operation.
Implementing new data sources can be vital for insurers because it enables a proactive approach to risk mitigation. For example, when an insurer utilizes telematics data, they are able to identify high-risk driving behavior before accidents occur. They can work with operators to implement targeted training, reducing accident frequency and severity that may contribute to a nuclear verdict.
Predictive data can also help insurers identify fleets outside of their risk appetite who are more likely to be involved in a severe accident. By focusing on low-risk customers, insurance companies can reduce their exposure to nuclear verdicts and maintain stable pricing.
While this data-led approach can be a powerful tool for underwriters and commercial auto, it doesn’t address the underlying societal shifts contributing to the dramatic rise in nuclear and thermonuclear verdicts.
“Plaintiff’s lawyers have become adept at utilizing the threat of a nuclear verdict to change the landscape of or attempt to change the landscape of the claim.”
– Francine Minervini, SVP of Arch Insurance
Having an awareness of factors driving these jury awards will become crucial for insurers seeking to navigate this landscape outlined by Minervini. The rise in severity of car accidents reflects a merging of forces that are redefining commercial litigation.
Why Nuclear Verdicts Are Going Viral
No longer a statistical anomaly, there’s a stark reality associated with a nuclear verdict—from monetary impact to reputational risk. Insurance companies can no longer afford (quite literally) to turn a blind eye to the threat of nuclear verdicts.
Empower Your Underwriters | Create a Plan to Combat Nuclear Verdicts
Why are states like California and Florida virtually tied for states generating the most nuclear verdicts? And why does data indicate a significant upward shift in award levels? Here are some common reasons we’ve seen:
Plaintiff Attorney Strategies
A common and often-heard strategy used in nuclear verdicts is the reptile theory. What is the reptile theory? It’s a tactic used to appeal to a jurors’ instinct to seek safety and security, playing on emotions. An attorney may argue that this company is dangerous to the public; they’re dangerous to the jury.
“The mind is like Velcro for negative experiences, and Teflon for positive ones.”
The reptile theory ignores someone’s ability to make decisions rationally and taps into emotional triggers, such as the flight or fight response, eliciting a thermonuclear verdict.
Another tactic often seen in these cases is the anchoring effect, a bias described as the human tendency to rely solely on the first piece of information offered. In a nuclear verdict case, an attorney will lead with an extremely high damage amount early in the trial, setting an "anchor" that ultimately influences jurors' judgment and decision-making.
Lastly, in cases where severe injuries or deaths occurred—like commercial auto accidents—attorneys will present and emphasize the plaintiff’s injuries and suffering, evoking strong emotional responses from jurors. This creates a sense of empathy and outrage, contributing to a higher reward amount.
Juror Biases and Perceptions
Jurors, as many of us do, carry their own inherent biases that may contribute to nuclear and thermonuclear verdicts. Outside of emotional decision-making that can sway verdicts, jurors’ may:
- Have negative perceptions of large corporations that don’t align with their own values or feel they’re held unaccountable for their negative actions.
- Not fully understand the financial implications of a large award on the insurance market, and ultimately consumer goods or services—driving economic volatility.
- Be influenced by outside media or social networks, which can create negative perceptions of those involved in the case.
Social Inflation
As a key driver behind the surge in nuclear verdicts, social inflation alters the civil litigation landscape, creating an environment where significant awards are more likely to occur. Think of it this way: a consistent history of nuclear verdicts leads to a higher probability of a similar (or more significant) verdict.
With litigation costs rising, attorneys are incentivized to increase the settlement amount and recoup their costs to generate a profit.
The general rise of economic inflation has increased the cost of medical care and vehicle repairs. The U.S. Centers for Medicare & Medicaid Services (CMS) reports that U.S. healthcare spending grew over 7% in 2023, costing $14,570 per person. These costs are often taken into consideration as verdicts are created.
Distracted Driving and Risky Driving Behavior
Speeding, distracted driving and road rage are becoming a large part of the conversation behind why juries award large verdicts. When a driver engages in reckless actions, it can increase the likelihood of future accidents—fueling massive jury awards.
For example, a Nassau County jury in 2024 reached a thermonuclear verdict of $141.5 million in the case of a logging truck crash that seriously injured three people. The truck driver had a lengthy criminal and traffic violation history, which was reported to be unverified or checked by the hiring company.
This example highlights the importance of adopting and utilizing driver data to verify information on a commercial fleet and address the consequences that can come from static (outdated) motor vehicle record (MVR) data versus leveraging solutions like continuous MVR monitoring.
Telematics Data and Thermonuclear Verdict Prevention
Beyond the benefits we’ve covered, insurers can leverage driver data, particularly telematics, for a more nuanced and strategic understanding of their risk portfolio. Telematics data can help insurance carriers identify broader trends and refine underwriting strategies.
With data readily available to forecast potential accidents, insurers can mitigate risk through targeted interventions and assessments—anticipating future losses. In the case of a nuclear verdict, telematics data can be helpful to prove non-liability or reduce the overall nuclear verdict amount by:
- Establishing a baseline of safe operations by providing a consistent record of safe driving and responsible behavior.
- Challenging claims of driver negligence by showcasing historical data of safe driving behaviors.
- Exonerating drivers effectively with in-vehicle camera data that is readily available through telematics data aggregation.
This data increases the consulting power of Risk Control teams and the quality of information available for renewal assessments. Telematics data can identify fleets or drivers exhibiting patterns associated with high-severity accidents, allowing for targeted risk control interventions long before a non-renewal decision becomes necessary.
This approach ensures that a carrier's renewed portfolio is less susceptible to incidents that can trigger nuclear verdicts and empowers them to adjust premiums based on real-time risk assessments rather than relying on historical data that may not reflect current insights.
Beyond assessing customer risk, insurers have a unique opportunity to empower fleet customers with data that can help improve overall driver safety.
Innovating and Adapting for a Profitable Future
As nuclear and thermonuclear verdicts continue to rise, insurance companies are responsible for continuously finding ways to adapt and innovate—leveraging data responsibly to address and mitigate risk.
With commercial auto accidents contributing to most nuclear verdicts, there's an opportunity to proactively develop underwriting risk strategies that implement telematics. At SambaSafety, our aggregated telematics data solution consolidates and harmonizes data across a large ecosystem of over 100 telematics providers, improving visibility into an insurer’s current book and addressing risks that could indicate a nuclear verdict.
As thermonuclear verdicts gain momentum, the question remains—can data empower insurers with knowledge of the human factors driving nuclear verdicts? Or are we merely reacting to the inevitable?
Discover how insurers can proactively implement strategies that leverage solutions, like those from SambaSafety, by downloading our comprehensive white paper, From Crisis to Control: Protecting the Commercial Auto Insurance Ecosystem from Nuclear Verdicts, below.
