Thermonuclear Verdicts Fuel Demand for Excess Liability Insuranc

Rising jury awards and social inflation are pushing businesses to rethink liability limits.

All businesses across the U.S. are facing a sharp increase in jury awards, also known as nuclear verdicts – judgments of $10 million or more. According to a recent study by Gen Re, there were 89 nuclear verdicts totaling $14.5 billion last year.  

What’s even more alarming is the rise of thermonuclear verdicts, jury awards of $100 million or more. These extreme judgments are becoming more frequent, specifically in the transportation and trucking industries. Settlements in these industries now average $10 million, and verdicts reach upwards of $27.5 million. 

What’s Driving the Increase in Verdicts? 

Several factors are contributing to the escalation in liability claims, such as:  

• Social inflation: Shifts in public sentiment and higher expectations of compensation. 
• Litigation funding: Private equity firms financing lawsuits, increasing case volume and severity. 
• Aggressive plaintiff strategies: Trial attorneys pushing for maximum jury awards. 
• Erosion of tort reform: Weakening of past legal protections that capped damages. 

Altogether, these forces are fueling towards the nuclear and thermonuclear verdicts, which can easily drain a company’s primary liability insurance limits.  

Why Excess Liability Coverage Matters More Than Ever 

A standard Commercial General Liability (CGL) policy usually offers a $1 million per occurrence limit. With the current litigation patterns, this amount alone may not be enough to protect against such heavy losses.  

This is where your extra pocket of Excess Liability Insurance comes in, providing additional limits above your existing primary policy. When your primary coverage is exhausted, Excess Liability Insurance becomes your financial safety net.  

In early history, carriers often offered an excess liability layer of $25 million. However, now, insurers are more cautious and are splitting coverage into smaller increments – such as $2 million, $3 million, or $5 million to spread the risk. 

Real-World Impact of Thermonuclear Verdicts 

Claims can quickly spiral into the nine-figure territory. In 2024, a Missouri jury awarded $462 million in a trucking-related products liability case, which was later reduced to $120 million.  

Such escalating rewards are not only driving up the insurance premiums but are also increasing settlement amounts, since adjusters fear the possibility of even larger jury outcomes. Ultimately, the costs trickle down to consumers and businesses alike. 

The Risk of Being Underinsured 

If your business does not have sufficient liability limits, it is at risk of devastating financial losses – including bankruptcy. Even though Excess Liability Insurance has become more expensive, capacity is still available – and it still remains to be worth every penny spent.  

Looking Ahead 

States like Florida and Georgia are taking steps toward tort reform and requiring litigation funding disclosure during discovery. If more states step forward and adopt such measures, it could help control runaway jury awards. In the meantime, business owners should consider working with an experienced broker to review their liability limits and ensure that they are adequate, but also remember to consider worst-case scenarios and not the best while structuring coverage.  

As trusted risk advisors, we can help build a proactive risk management strategy to also reduce exposure and help you find the insurance plan that suits you best. Contact us today to set your strategy & insurance at the right path.