Skip to main content

As the situation in Ukraine evolves, businesses should be mindful of potential risks to their people, assets, operations, or supply chains in the region and globally. Marsh, as part of the Marsh McLennan family of companies, has created a page with information, tools, and resources related to the Russia-Ukraine conflict. Please visit the page for the latest information.

August 30, 2023

Transportation litigation trends

J Foster

The trucking and transportation industry plays a big role in the movement of products and materials across the country. Land transportation comes with its share of challenges, including occasional on-the-road accidents. However, a new trend has been rising in the form of costly litigation cases against truck drivers and their companies.

These cases result in large fines, which can heavily impact smaller trucking and transportation companies. Insurance rates and premiums are also affected by these cases. Your trucking company should do what it can to avoid possible accidents and the legal fines and insurance costs they bring. 

Litigation aimed at the industry

Nuclear verdicts”—verdicts costing over $10 million in damages—are common in trucking accident cases. Looking at trucking litigation data between 2006 and 2019, the first five years of data showed 26 cases over $1 million. However, in the last five years of that data set, nearly 300 cases cost over $1 million. More recently, a study from the U.S. Chamber of Commerce Institute for Legal Reform showed that between 2020 and April 2023, the average award was $27.5 million.

Powering these cases are lawyers who use specific methods to paint truck drivers and companies in a bad light. One move focuses on third-party litigation. This tactic happens when wealthy financiers give attorneys big paydays, which helps fund their suits against trucking companies. When trucking companies pay, the financiers and attorneys split the reward.

Another method involves the use of reptile theory. Here, plaintiff attorneys use the threat of unsafe driving allegedly caused by truck drivers to paint them as dangerous to the community. This tactic can also be pushed through different forms of media. Crafted by law firms that specifically take on cases involving accidents with 18-wheelers, these ads are angled to place blame on truck drivers while promising their clients big court payouts.

Of course, truck drivers aren’t always at fault in every accident. For example, a Werner Enterprise driver was involved in an accident after a pickup truck swerved in its path. Investigating officers did not find fault with the Werner driver since they had been driving below the speed limit. The jury thought otherwise, resulting in a massive verdict against the company.

Rising premiums and rates

More litigation increases costs for insurance companies paying claims. As a result, insurance premiums rise for truck drivers. One state that feels the effects of predatory court cases is Texas. The state saw 55,300 motor vehicle lawsuits in 2019. There has been a 400% increase in coverage above primary or self-insurance limits, while medical providers' insurance rates are increasing 20 times above the charged rates.

The nation is also seeing growing insurance premiums. The American Transportation Research Institute noted that almost all motor carriers saw rises in insurance costs from 2018 to 2020. Premiums rose across all fleet sizes and sectors. Small fleets, in particular, paid more than three times as much as large fleets per mile.

Addressing these concerns

How can you prepare your business for these challenges with rising insurance costs and litigation aimed at trucking companies? One move is to become more aware of reform attempts happening across the country. Most of these reforms aim to give drivers more benefit of the doubt in trucking litigation cases and jury awards.

This year, different states are looking to help trucking companies. In Iowa, the state senate created a bill to put a $5 million limit on non-economic damages a person could win in court in accidents involving a trucking company. Non-economic damages can include pain and suffering as well as mental anguish. The state of Florida and the Florida Truck Association introduced a bill in March to ensure protection against the "…predatory practices of trial attorneys." The bill also alters a bad-faith framework, cuts out one-way attorney fees, and helps drivers not be held liable if the person suing was more at fault.

You can use various tools and services to protect your drivers. One example is the Federal Motor Carrier Safety Administration (FMSCA). Following the FMSCA’s regulations and advice will be essential in securing your drivers. Keeping track of medical and driving records will also be vital. If an accident happens, you want to ensure your drivers have all their medical and driving records up to date.  

Technology can help protect your trailers and drivers in court if an accident happens. Dashcams on the front and back of the vehicle can provide a clear image of what happens during an accident. These tools can be valuable in showing fault should a driver have to go to court. You can keep track of your workers using telematics, which combines telecommunications and computer processing.

Where Marsh McLennan Agency can help

While you work to protect your business and drivers in a litigation-heavy industry, Marsh McLennan Agency can provide a helping hand. Work with specialists who know the trends the trucking and transportation industry trends face. Get help following the FMSCA and other regulatory bodies while using solutions and carriers tailored to your business. Are you looking to go beyond traditional insurance? A captive program can act as an alternative risk transfer solution, offering lower costs and more control over your risks.

Learn more about litigation and other current trends in our Business Insurance Trends Report.

Contact a Marsh McLennan Agency trucking and transportation specialist today.

Disclaimer: This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication, or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affected if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change. d/b/a in California as Marsh & McLennan Insurance Agency LLC; CA Insurance Lic: 0H18131. Copyright © 2023 Marsh & McLennan Agency LLC. All rights reserved.