The $300B Shock Verdict and Social Inflation

[Gunnar Larson]

Check out my new article:
https://litigationfinancejournal.com/the-300b-shock-verdict-and-social-inflation/

The $300B Shock Verdict and Social Inflation

A $300B damage award is serving as an example of shock verdicts driving the
notion of social inflation. Preserving the ecosystem of litigation finance
from shock verdicts is a priority for some in the industry.

Best Review’s monthly insurance magazine
<https://news.ambest.com/articlecontent.aspx?AltSrc=104&RefNum=317590>
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.

-- 
*Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>*
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G at xNY.io
+1-646-454-9107
New York, New York 10001
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