News and Articles


 

article image 2-28-22.jpg”Nuclear Verdicts” Impact Transportation Industry

February 28, 2022

The trucking industry is undergoing tremendous changes, and truckers feel uncertain about their futures going forward. Aside from monumental shifts in the way the industry does business, trucking carries greater risk for drivers and transportation companies with the onset of nuclear verdicts in court cases.

With crowded roadways, traffic safety is becoming a significant issue. The trucking industry is being held accountable for truck accidents, with enormous damage amounts awarded in wrongful death suits. The result could be a raft of bankruptcies sending the transportation industry to the brink. This is the reason why transportation insurance remains a lifeline for companies and drivers confronted with this harsh reality.

How Did Nuclear Verdicts in Trucking Get to This Point?

The insurance industry coined the term “nuclear verdict” because of the devastating nature of these large damage awards. The question is, how did it get to the point that these verdicts seem warranted? Much of the answer lies with an overburdened trucking industry weathering major shifts.

One serious problem is retiring truckers. Many drivers no longer want to deal with the long hours or personal price that trucking demands. Furthermore, there is no trained pool of drivers to replace retirees and few prospects for new drivers. This places a burden on the remaining drivers. When new drivers sign on, some may lack the proper qualifications to make them roadworthy. Tired, overworked, and inexperienced drivers lead to poor outcomes on long driving shifts.

Understanding the Impact of Nuclear Verdicts on the Trucking Industry

Trucking accidents are devastating. When trucks collide with other vehicles, there is little protection against catastrophic outcomes. Statistics show a 43% increase in fatalities in truck accidents since 2010. This dramatic rise in deaths leads litigators to ask for exorbitant damages to point out that someone needs to pay for this problem. General inflation stemming from increased labor rates and medical costs, plus lack of parts and supplies and recent social justice initiatives, all contribute to the overall settlement costs.

This is a crippling outcome for independent operators and trucking companies. Between 2010 and 2018, there was a 1,000% increase in the size of damage awards. If a verdict is $20 million and insurance covers only a quarter of the settlement amount, the business owner assumes the rest. This situation is untenable for almost all businesses shouldering these massive verdicts.

A Possible Path Forward

Insurance companies and the trucking industry are lobbying lawmakers for reasonable caps on settlements. Insurers believe nuclear verdicts evolved from these issues: mistrusting corporate motives, financing of litigation, and increasing social pessimism.

In the face of these circumstances, some operators consider cutting back on transportation insurance coverage, except for what’s required by law, to save on premiums. Most truckers understand the price of that decision is too high. They realize the best path forward is to improve the situation for overwhelmed drivers and get legislative support for realistic verdicts. ◼


news pic 9-23-22.jpg

How Inflation Affects Management Decisions

September 23, 2022 | Effective business managers always have an eye on the bottom line. One of the most critical factors for industries to monitor is inflation… more 

news pic 9-14-22.jpg

Planning Construction Around Severe Weather

September 14, 2022 | The progress of a construction project is influenced by a wide range of factors, including employee speed and adherence to the schedule… more 

news pic 9-2-22.jpg

How Technology is Shaping Healthcare

September 2, 2022 | Few industries have been revolutionized by technological developments quite the way that healthcare has. Technology has become a central feature… more