The unwillingness of the insurance sector to adapt its claims and defense methodologies is allowing plaintiffs' attorneys to secure increasingly larger nuclear verdicts, as highlighted during a recent panel discussion at InsuranceFest 2026. Titled Claims & Courtroom Chaos: Surviving Nuclear Verdicts®, the session featured insights from brokers, claims specialists, and legal experts, emphasizing a growing divide between well-funded plaintiff firms and an industry still employing outdated tactics.
Challenges in the Defense Strategy
Ashley Fetyko, a partner at Tyson & Mendes, pointed out that insurers and defense teams are struggling to keep pace with plaintiffs' attorneys who are leveraging litigation funding, artificial intelligence, and advanced jury strategies. "The biggest problem is us," she stated, suggesting that the industry itself could be hindering its own progress.
According to Fetyko, defense strategies that may have proved successful five or ten years ago are proving inadequate in today's landscape, where plaintiffs are utilizing data-driven approaches to tailor their cases dynamically. This imbalance is exacerbated by the difficulties defense teams face in securing funding for essential trial preparations.
Redefining Nuclear Verdicts
The panel shifted the traditional understanding of nuclear verdicts away from merely exceeding a set monetary limit to assessing disproportionality in awards. Fetyko noted that a $3 million verdict might be considered nuclear if the actual medical expenses were merely $2,000, highlighting the disconnect between jury awards and underlying evidence.
Caryn Siebert, vice president of carrier engagement at Gallagher Bassett, added that jurors are increasingly driven by emotional responses and a desire to penalize companies. "It's emotionally driven," Siebert emphasized, detailing how plaintiffs' lawyers strategically frame defendants as negligent corporations, stirring public sentiment against them.
The Risks Begin Early
Crucially, the risk of cases turning nuclear can arise as soon as the initial notification of loss is made. Inconsistent responses during discovery, lackluster witness preparation, or evasive conduct can bolster the narrative that a company prioritizes profits over safety, potentially swaying jurors. Siebert underscored the importance of early fact-finding and transparent communication among brokers, carriers, and defense teams to address issues before they escalate.
Impact on Casualty Pricing
The financial implications of these trends are evident in casualty pricing. Moderator Adil Husain, founder of The Intelligence Council, revealed that casualty renewals have surged by 20% to 30%, a stark contrast to a softening property market. He identified ongoing underwriting losses in commercial auto liability, which have persisted for 14 consecutive years, as particularly concerning, indicating that rating strategies are lagging behind actual severity trends.
Litigation Financing Shakes the Claims Environment
Brandon Schuh, senior vice president at Christensen Group, highlighted litigation financing as a transformative element in the claims arena. This external capital enables even smaller plaintiffs' firms to pursue complex cases and prolong litigation without the pressure to settle early. “A case that might have never seen the light of day 20 years ago… is now well-funded if it has merit,” Schuh noted.
Defense Strategies for the Modern Landscape
Addressing these shifts, the panel argued for a more proactive defense approach. Schuh urged defense teams to initiate earlier interventions and strengthen collaboration to address claims effectively. Insurers have been reluctant to take cases to trial, often opting for the path of least resistance, which can result in more tenuous cases making it to court.
Fetyko advised that defense teams should present their own damage figures early, disrupting the plaintiffs' attorneys' narratives before they can take root. Plaintiffs’ attorneys frequently begin shaping juror perceptions during jury selection, which complicates the defense's position.
The Role of Brokers in Defense
To facilitate better outcomes, Siebert posited that brokers play a vital role in helping clients navigate their exposures and should work to connect them with specialized legal counsel before situations escalate. Schuh described brokers as the "quarterback" in these scenarios, coordinating efforts among the insured, carriers, and legal experts. He emphasized the need for a strategic rather than purely tactical approach, particularly in complex sectors like trucking, where significant financial implications often arise.
“Clients must have a clear strategy for defending these cases, aligning their goals with those of their insurance carriers,” Schuh stated, warning that without such alignment, clients might need to consider exploring different policy options as a means of strengthening their defensive posture.
