Nuclear verdicts, meaning exceptionally high jury awards, continue to be on the rise in the commercial transportation industry. Both the number of occurrences and the dollar amounts are climbing. As a result, insurance rates are also increasing, making coverage less affordable for transportation businesses.
While it has become commonplace to assign blame to aggressive plaintiffs’ attorneys for pursuing high-dollar litigation, companies themselves are providing these attorneys and their clients with plenty of courtroom ammunition. To protect themselves from the fallout of nuclear verdicts, commercial transportation companies need to focus on diffusing the situation before it even begins.
Cutting corners on safety
The COVID-19 pandemic caused an explosive rise in the popularity of e-commerce, amplifying many long-standing challenges in transportation. Labor retention issues and shortages, and the lack of underwriting capacity from insurance companies, have been in the spotlight since the beginning of the global health crisis.
As companies raced to keep up with unprecedented demand, operational policies and procedures that enforced safety regulations often went by the wayside. For some companies, pursuit of profit led to negligence, creating avoidable hazards. The result: litigation and nuclear verdicts.
While cutting corners can be tempting, businesses can end up with costly legal headaches. Meeting the current industry challenges head-on is the best way forward.
Mitigating nuclear verdict risks
By prioritizing safety and clearly documenting your efforts, you benefit both the business (by reducing incidents) and your defensible position when accidents do occur. A judge wants to see a well-documented, consistent, and demonstrated focus on safety. A plaintiff’s attorney will dig for any shortcoming in your policies and procedures (or enforcement of them).
Nuclear verdict cases often have a common thread — “grossly negligent operations” provide fuel for a high plaintiff payout. A defense that shows “this business did everything it could to ensure safety” helps mitigate your risk.
While incidents that result in major injury or death have the potential to spark nuclear verdicts, taking the following steps can drastically lower the chances of a nuclear scenario:
Driver Hiring and Retention
- Thoroughly vet the skills and experience of new hires. Then, stick to those guidelines without making exceptions. You don’t want an insurance adjuster to find “skeletons in the closet” during claims discovery. Implement adequate discipline and follow through on it. Also, provide competitive pay and benefits to help keep the best drivers behind the wheel.
Continuous Mentorship and Training
- Follow up-to-date regulation standards and provide a longer period of driver mentorship / training. These actions show you prioritize safety and prepare your drivers thoroughly for challenges on the road. Continuous documentation of such programs also conveys your company’s concern for safety.
Implementing Technology
- Enforce the use of four-way directional cameras and telematics. Use GPS to optimize daily routes and improve overall operational efficiency. Beyond improving driver performance, embracing technology provides essential points of data for better overall operations. Plus, it allows you to monitor driver behavior and incidents that may occur. Choosing not to use such technology provides another arrow in the quiver of a claimant’s attorney, who wants to plant seeds of doubt about your operation.
Creating positive change industry-wide
A business that is willing to do what it takes to help “disarm” the nuclear verdict bomb can have a lasting impact on commercial transportation as a whole. As other companies follow your lead, you pave the way for safer practices across the industry. Reducing both the frequency and payout of adverse verdicts will help stabilize an insurance market that has struggled to keep up with staggering courtroom settlements.
For more information, connect with the Risk Strategies Transportation Team: transportation@risk‐strategies.com.
About the author
Bryan Paulozzi specializes in insurance and risk management for courier, last-mile, home delivery, expediting, freight forwarding, and brokering businesses. He and his team help transportation companies identify and mitigate safety risks, with the goals of reducing insurance costs and avoiding nuclear verdicts.
