Jury awards exceeding $10 million, known as nuclear verdicts, are on the rise in the trucking industry – and those decisions are making it tougher for transportation companies to stay in business.
According to a 2020 report from the American Transportation Research Institute (ATRI), average verdicts in the U.S. trucking industry soared from just over $2.3 million to nearly $22.3 million between 2010 and 2018 – a 967% increase – and these settlements are still spiking after courts started reopening following COVID-related shutdowns.
When companies face a judgement exceeding their insurance limits, it results in higher prices for liability insurance coverage, increased consolidation of larger companies absorbing smaller businesses, and it increases the odds that companies either go bankrupt or are forced to sell.
This trend is also fueling higher prices for Truckers Auto Liability Insurance and reducing access to Excess Liability Insurance – two critical types of coverage because of the severity of many trucking accidents. When these market changes occur, some operations are forced to close, leaving many in the industry worrying how a single, severe loss could potentially impact their bottom line. These upward trends align with an increase in fatal trucking accidents, with the National Safety Council reporting a 43% increase in deadly crashes involving large trucks between 2010 and 2019. If companies don’t have high enough insurance limits they risk losing their business, and the judgement will have to be paid one way or another. As these types of insurances become less affordable, we’ll see more companies go out of business, leading to more consolidation across the industry.
Original article provided by: https://www.ccjdigital.com/business/article/15281138/spike-in-nuclear-verdicts-driving-costs-risk-in-trucking
