Commercial trucking consists of many things: moving freight, maintaining your fleet, hiring and maintaining drivers, and fleet safety. Maintaining a fleet focused on safety and data-driven information can be the best defense when a potential nuclear verdict arises. A few weeks ago, we participated in an online seminar that talked in depth about nuclear verdicts in the trucking industry; below is our summary of that seminar.
Over the past few years, the trucking industry has been experiencing a higher number of insurance claims with nuclear verdicts.
What are nuclear verdicts?
Nuclear verdicts have been a hot topic in the industry relating to higher insurance claims and the rising costs of truck insurance. What are nuclear verdicts, and why does the frequency increase year over year? Many trucking insurance carriers will describe a nuclear verdict differently; however, the most consistent seems to be any auto liability claim that exceeds the standard $1,000,000 Combined Single Limit policy that most motor carriers hold. Many variables come into play when nuclear verdicts are considered. Location of accident, jury pools, and more. As a trucking specialist, we are constantly looking for ways to bring value to your company and fleet other than just providing insurance quoting. As technology evolves and more information becomes available to the public, we as an industry must strive to consistently do all we can to minimize risk and loss to the communities we travel through.
Semi-truck engines have constantly evolved over the last twenty years; they are more powerful, get better miles per gallon, and have more technology than before. Engine technology has come a long way in capturing data for engine performance and driver tendencies of operating the vehicle. I can recall an incident when I was the Risk Manager for a publicly-traded trucking company in 1998 when I first learned how much data these trucks produce. When we were involved in a catastrophic claim, we gathered and kept a list of items to compile that helped us determine the potential claim exposure we might experience. We would gather the data from the truck quickly after an incident because the information is always fresher shortly after an accident. A term closely associated with nuclear verdicts is reptile theory. The term reptile theory is based on the human instinct to fear reptiles such as crocodiles. This term could be used in several situations, but in my experience handling large truck insurance claims, this theory is often practiced by plaintiff attorneys during a deposition or a trial involving a motor carrier and an injured party. If a plaintiff's attorney can successfully instill fear in the minds of a jury, then they increase the chance of securing a nuclear verdict. The data collected from your fleet and drivers and what you do with that data is the best defense in the event of a large potential claim.
How do I plan for potential nuclear verdicts?
Consistency is key, and safety must be a state of mind to stay ahead of large claims. Organize and analyze your data, set standards, and take action. Always be prepared to defend your actions based on your procedures and or manuals.
Go above and beyond the standards set by Federal Motor Carrier Administration when it comes to data collection. The basic guidelines for FMCSA are 65%, so set a more aggressive review. Once their threshold has been exceeded by more than 10%, have procedures to address the situation. After a major loss, your company is on full display from how you dispatch, growth, safety procedures, fleet maintenance, pre-trip inspections, and more. In my experience, there is no way to completely bulletproof your fleet from the reptile theory or high verdicts.
Having a top-tier safety program and adhering to the safety guidelines set and being consistent will go a long way in protecting your fleet and keeping the community safe.
As always, thank you for the continued trust you place with Thomas Wilson Group.