Nuclear verdicts, meaning exceptionally high jury awards, continue to be on the rise in the commercial transportation industry - both in prominences of occurrence and absolute dollar amounts. As a result, insurance rates are rising in tandem, and the risk of transportation businesses not being able to afford their insurance has grown higher than ever.
While it has become commonplace to assign blame to aggressive plaintiff’s attorneys for pursuing high-dollar litigation, companies themselves are providing these attorneys and their clients with all the courtroom ammunition they need. To protect themselves from the fallout of nuclear verdicts, commercial transportation companies should focus on trying to diffuse 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 issues 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. The pursuit of profit put blinders on to the types of negligence that create situations directly leading to both litigation and nuclear verdicts.
Cutting corners can be tempting, but it can also lead to 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 well-documented, consistent, and demonstrated focus on safety can change the common rhetoric found in nuclear verdict cases where grossly negligent operations provide fuel for a high plaintiff payout. A defense that can show this business did everything it could to ensure safety can help shift the perspective toward the company’s mitigation strategies.
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 significant nuclear fallout scenario:
- Driver Hiring and Retention: Thoroughly vetting the skills and experience of new hires and sticking to those guidelines without making exceptions can help to avoid “skeletons in the closet” being found during claims discovery. Implementing adequate discipline and following through on it can also help to do the same. Providing competitive pay and benefits can also help to keep the best drivers behind the wheel as well
- Continuous Mentorship and Training: Following up-to-date regulation standards, as well as a longer period of driver mentorship/training, will ensure safety is prioritized and that drivers are well-prepared for challenges on the road. Continual documentation of such programs will also go a long way in helping to demonstrate your company’s concern for safety.
- Implementing Technology: Enforcing the use of 4-way directional cameras, telematics and GPS optimizes daily routes and improves overall operational efficiency. Beyond improving driver performance, embracing technology provides essential points of data for better overall operations, and for monitoring driver behavior and incidents that may occur. Choosing not to follow through on the use of such technology only provides another arrow in the quiver of a claimant’s attorney when it comes to planting 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 before it begins can have a lasting impact on commercial transportation as a whole. Other companies following suit will provide a similar benefit, leading to safer practices across the industry. Lessening the impact of lower nuclear verdicts both in frequency and payout will help to stabilize an insurance market that has struggled to keep up with this dramatic shift in courtroom settlements.
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The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.