Social inflation, or nuclear verdicts, has emerged as one of the biggest threats facing insurers today — even with a looming pandemic. But it was about 10 years ago when the wave began, Don Keenan, principal at Keenan Law Firm and author of "Reptile: The 2009 Manual of the Plaintiff's Revolution," told ALM sister site the Daily Report. It was at that time when Keenan and the book's co-author, David Ball, released their "reptile theory," which relies on appealing to jurors' portion of the brain that evolved first and where survival instincts kick in whenever a threat is perceived.
Since then, insurers have been fighting savvy plaintiffs attorneys who leverage fear to win over juries.
"In court, juries may not know if the plaintiff had insurance to help offset any costs," wrote Claims magazine Editor-in-Chief Patti Harman. "However, insurers can still be responsible for paying above the policy value if a case goes to trial. How can this happen?… Sometimes there isn't enough insurance to cover a claim, and the insurer is willing to pay the policy limit. However, jurors don't always accept the policy limits, especially when they think the insurer can pay more."
As more and more juries award $10 million (the benchmark for a nuclear verdict) or more in lawsuits against insurers, insurance companies are increasingly aiming to settle cases out of court. The below infographic showcases 10 legal cases where insurers settled for millions of dollars without a jury trial. Hover over the graph for additional details.
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