Commercial Auto: How Nuclear and Thermonuclear Verdicts Are Adversely Impacting the Market

• By: Olivia Overman
• September 8, 2025

Mounting costs from nuclear verdicts are a significant challenge to the trucking industry and insurers. Trucking companies across the U.S. faced $165 million in nuclear verdicts—jury awards over $10 million—in 2023. These verdicts accelerated in size in the 2000s and have continued to skyrocket, becoming “thermonuclear verdicts,” which are verdicts greater than $100 million. The number of thermonuclear verdicts increased to a record high of 49 in 2024, compared to 27 in 2023, according to Marathon Strategies.

“The trucking industry is vulnerable to nuclear verdicts and large jury awards,” says Mark Gallagher, transportation practice leader, Risk Placement Services (RPS). “A lot of the incidents end up being high profile, whether it’s caused by adverse weather conditions or fatalities that occur from unfortunate situations where large trucks are involved. That also leads to another issue in the industry: litigation financing.”

The insurance industry continues to be impacted by investments by companies that finance U.S. commercial lawsuits in exchange for a percentage of recoveries. Why is the increase in litigation funding a concern for the insurance industry? Social inflation.

Defined by the Insurance Information Institute, social inflation refers to the “trend of rising insurance costs due to increased litigation, plaintiff-friendly judgments, and higher jury awards.” These judgments and awards are impacting the insurance industry, with some industry leaders stating that social inflation has contributed to general liability and medical malpractice lines, in particular, experiencing seven consecutive years of underwriting losses, according to a report by Swiss Re.

“Those verdicts continue to attract outside influences in the form of third-party litigation financing (TPLF),” Saeger says. “Generally, TPLF involves third parties, often hedge funds or other financiers, investing money in trial cases and earning returns on the outcome.”

“Nuclear verdicts are one of the outcomes of legal system abuse that pervades the industry,” says Nick Saeger, assistant vice president of products and pricing for transportation, Sentry Insurance. “In addition, the need for rate increases is exacerbated by the increasing number and size of nuclear verdicts.”

An analysis of verdicts in the trucking industry from 2005 to 2019 found that the number of cases with verdicts over $1 million increased by 235% when comparing verdicts between 2012 and 2019 to those between 2005 and 2011, according to a 2023 report from the U.S. Chamber of Commerce Institute for Legal Reform.

Furthermore, a review of 154 trucking litigation verdicts and settlements from June 2020 to April 2023 revealed a mean plaintiffs’ award of $27.5 million and a median award of $759,875, according to the report. For settlements, the mean award was $10.6 million and the median award was $210,000.

“One claim in Florida in August 2021 saw the jury award $1 billion in damages,” says Roman Atkielski, national transportation practice leader, Jencap. “In this instance, there’s no insurance limit for $1 billion out there—carriers don’t have $1 billion, and the owners of the companies don’t have $1 billion. The judge and jury were sending a message by awarding such a large amount of money.”

As a result, trucking companies, already operating on thin margins, are forced to find innovative ways to control costs and to mitigate risks—or to pull out of the industry altogether.

In a market marred by persistent lawsuit abuse, agents play an important role in helping their clients to manage their expectations when it comes to the specific challenges posed by truck accident litigation.

For agents and their clients, “communication is vital,” Saeger says. “It can be difficult to deliver rate increases year after year, which has been the operating mode for most of the commercial auto industry. But if agents can explain what’s going on in the broader industry and that all of their customers could be susceptible to the issues, it can become a more productive conversation.”

Agents can also ensure clients understand the importance of tort reform at both the state and federal level. To assist agents, the Big “I” released the Trusted Choice® Legal System Abuse Toolkit to help independent insurance agents educate customers about how legal system abuse can drive up insurance costs.

In June, Charles Symington, Big “I” president and CEO, participated in a panel, “Public Policy and the Future of Risk,” along with the executives of the other major property and casualty trade associations, where they discussed legal system abuse and reform efforts at the state and federal level.

At the state level, about half of all states have at least considered legislation this year to address concerns about third-party litigation financing. Georgia, Kansas and Oklahoma have already adopted rules to regulate the litigation-finance industry.

“The industry recently had a legislative win in Georgia where two bills established limits on noneconomic damages, caps on medical damages, bifurcated trials and disclosure of TPLF, among other things,” Saeger says. “At the federal level, there are ongoing discussions regarding increased tax rates on income earned via TPLF, both domestically and foreign funded.”

Olivia Overman is IA content editor.  

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