News and Articles
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. ◼
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