Best Review’s monthly insurance magazine highlights the general trepidation of insurers being ‘on the hook’ for high dollar claims that are funded by third party litigation investors. There are those that argue obscene, high-dollar awards are a threat to the judicial system and therefore have the ability to diminish access to justice. Furthermore, litigation finance is blamed for insurance premium spikes–in some cases premiums have increased 25%. 

The $300B shock verdict referenced above relates to trucking insurance. The award could potentially be the largest damages verdict in United States history. This, as the insurance industry has worked to clamp down on trucker insurance coverage. Best Review notes that insurance contracts for trucking operations previously allowed for $50M in coverage. Today, insurers have reduced many trucking insurance contracts down to only $1M coverage options. 

Best Review references that savvy insurers continue to approach the problem of social inflation with a barrage of solutions, including lobbying dollars on tort reform. Overall, it would appear that insurers are targeting sophisticated third party investors who likely hold a variety of portfolios that include insurance claims.