Nuclear Verdicts: Why Businesses Need Stronger Liability Protection
A liability claim that once would have stayed within standard insurance limits can now create millions of dollars in unexpected exposure.
Across industries, businesses are facing a growing challenge: nuclear verdicts.
These unusually large jury awards are becoming more common, increasing the risk that a serious claim could exceed a company’s primary liability coverage and create significant financial consequences.
According to research from Marathon Strategies, nearly 200 corporate verdicts reached at least $10 million in 2025, representing a 40.7% increase from the previous year and the highest annual total since 2009.
Those verdicts totaled approximately $25.6 billion, including 40 “thermonuclear verdicts” exceeding $100 million, with four surpassing $1 billion.
For businesses, the message is clear: liability risks are becoming more severe, and coverage limits should be reviewed accordingly.
Why Are Liability Claims Becoming More Expensive?
Several factors are contributing to the increase in large jury awards.
Social Inflation and Changing Jury Expectations
Social inflation refers to factors that cause liability claims to increase beyond traditional economic inflation.
These factors can include:
- Changing public attitudes toward corporations
- Higher jury awards
- Increased willingness to assign large damages
- More aggressive litigation strategies
Research from Marathon Strategies found that 72% of Americans believe jurors should “send a message” to corporations to improve their behavior, showing how perceptions can influence liability outcomes.
Third-Party Litigation Funding
Another factor affecting claims is third-party litigation funding.
This allows outside investors to provide financial support for lawsuits in exchange for a potential return from the outcome.
While this can help plaintiffs continue pursuing claims, it can also increase the time and resources involved in litigation.
For businesses, longer legal battles can mean higher defense costs and greater uncertainty.
How Nuclear Verdicts Impact Business Insurance
Many businesses assume that if they have liability insurance, they are fully protected.
However, large claims can quickly challenge standard coverage limits.
Commercial General Liability (CGL) insurance can help respond to covered third-party claims involving:
- Bodily injury
- Property damage
- Personal injury claims
However, when a claim exceeds the limits of a primary policy, businesses may need additional protection through Excess Liability Insurance.
Excess coverage provides additional limits above underlying liability policies, helping protect businesses from catastrophic losses.
Why Businesses Should Review Their Liability Limits
A common misconception is that a liability limit represents available protection for every possible claim.
However, policy terms, exclusions, and underlying coverage requirements can affect how and when excess coverage responds.
Businesses should review:
- Primary liability limits
- Excess liability limits
- Policy exclusions
- Coverage restrictions
- Industry-specific risks
For example, a company may have significant excess coverage but discover after a claim that certain exposures have different requirements or limitations.
Understanding the details before a loss occurs is critical.
Industries Facing Increased Liability Exposure
Nuclear verdicts can affect businesses across many sectors.
Industries that may face increased liability concerns include:
- Healthcare organizations
- Manufacturing companies
- Transportation businesses
- Professional service firms
- Construction companies
- Technology companies
Any organization that interacts with customers, employees, products, or the public can face liability exposure.
The size of the business does not eliminate the risk.
Risk Management Can Help Reduce Exposure
Insurance is an important part of protecting a business, but prevention matters too.
Companies should consider:
Reviewing Safety Procedures
Strong workplace safety programs can help reduce the likelihood of preventable incidents.
Maintaining Accurate Documentation
Clear records of training, procedures, contracts, and risk controls can become important when defending against claims.
Reviewing Insurance Limits Regularly
Business operations change over time. Revenue growth, additional employees, new locations, and expanded services can all impact liability exposure.
Working With an Experienced Advisor
Understanding how coverage responds before a claim occurs can help businesses avoid surprises.
The rise of nuclear verdicts highlights a changing liability environment where businesses cannot rely on yesterday’s coverage decisions to address today’s risks.
As claims become more severe and litigation becomes more complex, companies should regularly evaluate whether their liability limits, excess coverage, and risk management strategies still match their exposure.
The goal is not simply having insurance. It is having the right protection when the unexpected happens.
At Professional Liability Insurance Group, we help businesses evaluate their liability risks, understand their coverage options, and identify potential gaps before they become costly problems.
If your business has grown, changed operations, or has not reviewed its liability limits recently, Shayne Bevilacqua can help you assess whether your current coverage aligns with your risks.
Reach out today for a coverage review.
