A few years ago, those in the insurance industry were concerned about the rise of nuclear verdicts. A nuclear verdict describes when a jury awarded a plaintiff at least $10 million in damages.
Often, it is the business’s insurance company that is responsible to pay all or part of this award.
Now, insurers must worry about thermonuclear verdicts, that is, jury awards of over $100 million.
To be fair, there were only 27 thermonuclear verdicts across the United States in 2023.
However, having to pay even one of these whopper verdicts can noticeably hurt the performance of even a large, established insurance company. These verdicts could ruin a smaller insurance carrier.
Moreover, the very threat of nuclear verdicts and thermonuclear verdicts can compel insurance carriers to settle other legal claims against their customers for much higher dollar amounts than they otherwise would.
Over time, carriers must account for higher payouts in some fashion, and simply increasing premiums is not always a viable solution.
A good frontline defense against nuclear verdicts is important
There are many reasons nuclear verdicts and thermonuclear verdicts are on the rise.
Aside from broad social and cultural trends, many plaintiffs and their lawyers are relying on third party litigation funding to front the cost of maintaining a potentially lengthy and complicated case.
Moreover, the plaintiffs’ bar is relying on more aggressive advertising to get out the message that victims need a lawyer early in the process or they will likely get taken advantage of. Those who live in or visit the greater Denver area may have noticed some of this advertising.
Insurance carriers can take steps internally to prevent nuclear verdicts by improving the service and care they offer victims and by honestly assessing the strengths and weaknesses of their cases. For the latter step, the advice of local counsel can be critical.
Retained counsel is also an insurance carrier’s frontline defense against nuclear verdicts. Plaintiffs often use effective trial tactics to secure a nuclear verdict. A quality defense team with knowledge of the Colorado courts and laws and rules can head off many of these tactics at the pass or, at a minimum, be prepared to respond to them.