Inside This Article:
- “Nuclear” verdicts increased 40.7% in 2025, reaching their highest annual total since 2009, according to Marathon Strategies.
- The nearly 200 verdicts of at least $10 million in 2025 totaled approximately $25.6 billion.
- Claims that have previously stayed within primary insurance limits are increasingly reaching Excess Liability Insurance layers.
- Business owners are encouraged to closely review policy terms and implement strong risk management practices.
What were once considered extraordinary jury awards have become increasingly common in commercial liability lawsuits. In 2025, nearly 200 corporate verdicts reached $10 million or more — the threshold for so-called “nuclear verdicts” — marking a 40.7% increase from the prior year and representing the highest annual figure since 2009, according to research by Marathon Strategies recently reported by Insurance Journal. In the same year, there were 40 “thermonuclear verdicts” — those totaling $100 million or more — which included four that exceeded $1 billion. In all, these massive verdicts totaled $25.6 billion.
“It is wild how big these verdicts are getting,” said Brooks Crawford, Broker, Burns & Wilcox, Brokerage Division, Atlanta, Georgia. “It is almost like make-believe money being pulled out of the sky.”
It is wild how big these verdicts are getting. It is almost like make-believe money being pulled out of the sky.
As verdict amounts continue to grow, businesses face a greater risk that a large claim could exceed their Casualty Insurance limits. A company’s Commercial General Liability (CGL) Insurance can respond to third-party injury and property damage claims, while Excess Liability Insurance can provide additional limits when a loss exhausts the underlying policy’s limits.
“From a Casualty standpoint, what is particularly concerning is how losses that have historically stayed within the primary limits can now reach Excess layers,” said Amanda McKanna, Underwriting Manager, Excess Casualty, Burns & Wilcox, Farmington Hills / Detroit, Michigan. “It is a completely different environment. We have to think about what a lawsuit potentially costs in today’s environment.”
What is particularly concerning is how losses that have historically stayed within the primary limits can now reach Excess layers. It is a completely different environment.
Third-party funding, other factors behind escalating verdicts
According to the Marathon Strategies report, third-party litigation funding, corporate mistrust, social pessimism, and weakening tort reforms are among the factors contributing to the growth in nuclear verdicts. The report also pointed to survey results showing 72% of Americans believe jurors should “send a message to corporations to improve their behavior,” a double-digit increase in that sentiment from 2022 results.
Third-party litigation funding allows outside investors to finance lawsuits in exchange for a potential return from their outcomes. North Carolina became the first state to ban commercial litigation funding in June, and 20 states have enacted laws regulating the industry — including 13 states that have passed restrictions within the past two years, Insurance Journal reported Aug. 20.
“In today’s environment, aggressive plaintiff strategies and third-party litigation funding can all affect the cost and duration of claims,” McKanna said. “We are not just dealing with economic inflation, but also social inflation and a litigation environment where the value of liability claims has definitely changed.”
For example, third-party funding can give plaintiffs the ability to continue pursuing a case, Crawford said. “If it takes five years to fight this case, they cannot afford to do that without getting paid. They are getting the third-party funding to supplement,” Crawford said, adding that he expects the practice to remain a significant factor. “I do not see any end in sight.”
Juror perceptions regarding insurers can also influence how liability claims are viewed. “When you have a lot of jury sentiment around pointing the finger at insurance companies and them being the big pockets, or the bad guys, it is very easy to spend someone else’s money,” he said. “That is a direct reflection of what the juries are doing.”
The role of Excess Liability Insurance
Nuclear verdicts can impact businesses across a wide range of industries. In February, a federal judge upheld a $243 million jury verdict against Tesla stemming from a fatal 2019 crash involving its Autopilot system, Reuters reported. In March, a Texas jury ordered a Rocket Companies subsidiary to pay $175 million in a trade-secrets lawsuit, according to Bloomberg Law.
Nuclear verdicts affected 68 industries in 2025, the Marathon Strategies report found. Product liability cases accounted for 29 nuclear verdicts totaling about $12 billion, while workplace negligence and intellectual property disputes also generated a large share of awards, Insurance Journal reported.
In addition to CGL Insurance, Excess Liability Insurance can also provide higher limits above underlying Auto Liability Insurance, Employers Liability Insurance, Liquor Liability Insurance, and other policies, McKanna said. However, policy wording should be reviewed closely.
“There is often the misunderstanding that if someone has a $10 million limit, they have $10 million for every loss — and that might not be true,” she said. “Excess Liability Insurance policies can have their own provisions or exclusions. We have our own guidelines that we have to follow.”
There is often the misunderstanding that if someone has a $10 million limit, they have $10 million for every loss — and that might not be true. Excess Liability Insurance policies can have their own provisions or exclusions.
For example, an underlying policy may have a lower sublimit for assault and battery and the Excess Liability carrier may require a higher underlying limit. In this case, the business could be responsible for the difference before its Excess Liability policy responds. “Underlying coverage requirements differ by carrier,” McKanna explained.
Business owners should understand how differences in policy terms and exclusions could affect their coverage, Crawford said. “Finding an educated broker or agent to explain coverages to you is probably the most important thing to make sure you are properly covered,” he said. “Having someone actually explain it to you can help prevent holes in your coverage.”
Finding an educated broker or agent to explain coverages to you is probably the most important thing to make sure you are properly covered.
Securing coverage in a tightening market
Businesses seeking higher liability limits face a tightening Excess Liability Insurance market. According to McKanna, some carriers are reducing the limits they will offer, which can make obtaining coverage more complicated and require several insurers to provide Excess Liability layers as part of an insurance tower.
“A lot of carriers are pulling back on limits, and that can make things more challenging,” she said. “That can make insurance more expensive because different carriers are coming in at different layers.”
Accurate, current information about a company’s operations is also important during underwriting, Crawford said. When purchasing coverage, companies with prior losses should be prepared to share how they have addressed vulnerabilities, whether through updated training, property maintenance, or other safety measures.
“That would be my first line of defense, to make sure that they have a good risk management strategy in place, because obviously we prefer to not even have the claim happen if at all possible,” McKanna said.
The right level of insurance coverage ultimately depends on each company’s operations, resources, and tolerance for risk, Crawford said. “You can never have enough insurance,” he said. “How much is peace of mind worth to you? That is different for everybody.”
