In the high-stakes world of trucking, the looming threat of serious accident litigation is a constant reality for many companies. When such situations arise, it’s crucial for owners and executives to understand that the future of their company may be at stake. This was a key takeaway from the recent address by Rob Moseley, a
Trucking Companies Look for Relief after Years of Insurance Premium Increases
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Year after year, insurance premiums for the trucking industry continue to increase, but now there appears to be hope for trucking companies.
Nuclear Verdicts – What are they and how are they affecting trucking companies?
Nuclear verdicts are lawsuit verdicts that award millions of dollars in damages. A study by the U.S. Chamber of Commerce Institute for Legal Reform found that not only have the number of nuclear verdicts increased in recent years, but the median amount of damages awarded of those verdicts has increased 27.5%. These high award amounts consist mostly of subjective punitive (pain and suffering) damages versus economic compensation (loss of wages, medical bills, etc.).
So why is this wreaking havoc on the trucking industry in particular? After all, according to the National Highway Traffic Safety Administration, accidents involving large trucks represent only 8.9% of traffic accidents. However, because of their size, accidents involving tractor-trailer trucks can result in a higher injury and death rate, resulting in the high likelihood that these accidents will end up in court. And because tractor-trailer trucks are most often owned by commercial entities, the threat of a nuclear verdict can be all too real for owners. In fact, “about one in four auto accident trials that resulted in a verdict of $10 million or more involved a trucking company.”
As you can imagine, this has had a dramatic effect on insurance rates for the trucking industry. Insurance rates for trucking companies have risen a remarkable 47% in the last 10 years, primarily because insurance companies have had to scramble to make up for losses due to unexpected nuclear verdicts. While this is obviously a major issue for trucking companies, it actually has a large impact on the economy as a whole. With increased insurance costs, transportation companies must charge more for their services, which drives up the cost of goods, bringing the bearing of the weight of these astronomical settlements onto the everyday consumer.
Why might the increase slow in 2023?
While it’s doubtful that insurance rates will decrease any time soon, the once rapidly increasing rates have started to slow from what we’ve seen at the end of 2022 and the beginning of 2023. Trucking companies are beginning to use safety mitigations to better protect themselves and their drivers, which in turn promotes less of a risk to insurance companies. In turn, some insurance companies are starting to recognize these precautions and are offering upfront discounts to companies who have mitigation techniques in place.
Other ways trucking companies can fight rising costs
While the insurance market does appear to be softening, it is still facing factors such as inflation, economic pressures, and those ever-persistent nuclear verdicts. However, there are things trucking companies can do to fight rising costs. Having a good risk-management plan in place is a start. Investing in technological devices that can help explain why an incident happened is also helpful in the event a company finds itself facing litigation. Specifically, simply having video can go a long way toward minimizing risk. Having video evidence of an incident “can change how a report gets written up, which can make a big difference in court.”
Another way trucking companies mitigate the potential costs of personal injury cases is with knowledgeable and experienced legal counsel. Luckily, Hughes Lawyers has extensive experience defending trucking companies in traffic cases. Tell us about your case or learn how you can prepare against potential litigation by contacting us today.
