The Top 3 Things Risk Managers Can Do to Minimize the Impact of Potential Litigation
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A bunk bed maker was hit with a $787 million verdict, after an Ohio jury decided they were at fault for the death of a two-year old who was caught between the top rung of the ladder and the bed.
This case, which was reported on by Bloomberg Law, is likely the highest wrongful death verdict the state has ever seen.
The story of record-breaking verdicts like this one has become commonplace. For the last ten to 15 years, nuclear verdicts (those over $10 million), have gone from being a rarity to a habitual occurrence. This trend of higher and higher awards is trickling down to small lawsuits as well.
“Cases that maybe should have settled for $100,000 are now settling for $300,000 or $400,000,” said Thomas Reed, Vice President of the North America Claims Group at Allied World.
Every sector — be it medical malpractice, product liability or any line involving personal injury — is being hit with these problems and it’s causing carrier appetites to shift. Insureds who once were able to build $100 or $200 million towers with several carriers, may need to work with a laundry list of insurers to ensure their liability coverage needs are met. As Reed put it, “It’s a heck of a lot more work to get the towers that you need.”
In this environment, risk managers should be taking every step possible to mitigate the impact of potential litigation. If they don’t, they could be in for a pretty terrible surprise when they reach trial: “Nobody wants to get hit with a $20 or $25 million, or even worse a $40 million verdict, especially when no one was anticipating it because that wasn’t what traditionally was the value of a certain case,” Reed said.
Here are three tips designed to help your company avoid this fate.
To learn more about Allied World please visit their website.