How to Prevent Nuclear Product Liability Verdicts

Atomic bomb with wooden gavel, 3D rendering isolated on white background
Inspired by insights from “Product Liability Verdicts Are on the Rise, but There Are Ways to Avoid Them” by William Rabb, Insurance Journal, published December 1, 2025
In today’s legal landscape, product liability claims are becoming increasingly risky—and expensive. Driven by a combination of aggressive legal tactics, evolving public attitudes, and third-party litigation funding, jury awards in product liability cases are reaching record levels, often referred to as “nuclear verdicts.”
But manufacturers and their insurers are not powerless. As discussed in a recent Travelers-hosted webinar, proactive risk management strategies—from product design through post-sale monitoring—can significantly reduce exposure.
Let’s take a closer look at what’s fueling these massive verdicts and how businesses can protect themselves.

A Shifting Legal Climate: Why Nuclear Verdicts Are on the Rise

According to Elise Schreier, VP of Liability Claims at Travelers, “It feels like it’s coming to a boiling-over point,” as nuclear verdicts grab headlines and reshape how juries respond to injury claims.
Key contributing factors include:
  • Plaintiff attorneys are leveraging public sentiment, often portraying corporations as prioritizing profits over people.
  • Litigation financing which allows plaintiffs to extend cases longer, raising costs and reducing incentives to settle.
  • Mass advertising campaigns and claims aggregators which flood courts with new plaintiffs, raising the stakes for companies.
  • The evolution of the tort system into an investment vehicle, rather than just a dispute resolution process.

Defensive Playbook: What Manufacturers Should Be Doing Now

While the litigation environment may be changing, many claims are preventable—or at least defendable—with the right approach. Travelers’ panelists outlined several best practices that manufacturers and insurers should adopt immediately.

1. Eliminate “Bad Facts” in Internal Communication
Juries often respond more to how companies behave than to the facts of the incident. During discovery, internal emails that appear cold, dismissive, or self-protective can significantly increase the chance of punitive damages.
“Be sensitive in emails, not calloused,” said Alexandra Lahav, law professor at Cornell. “Tone matters.”

2. Avoid Cost-Over-Safety Decisions
Cutting costs on materials or components may save short-term dollars—but it can come back to haunt you. Reese Cann, AVP of Risk Control at Travelers, emphasized the importance of:
  • Early product hazard assessments
  • Comparing your warning labels and safety messaging to competitors
  • Ensuring you select vendors that meet the same safety standards your company upholds

3. Respond Quickly and Humanely After an Incident
When an injury does occur, prompt, empathetic communication can help avoid escalations. Manufacturers should:
  • Immediately notify insurers and legal teams
  • Collect evidence
  • Show genuine concern and take steps to prevent similar injuries in the future
This approach doesn’t just reduce the risk of litigation—it also protects your brand.

4. Reassess Vendor Agreements and Liability Gaps
In today’s market, some vendors are reducing their insurance coverage, which can leave your company on the hook. Cann and Schreier both noted the need to:
  • Review vendor contracts carefully
  • Make sure fault allocation is clearly documented
  • Keep detailed records of all safety testing, design decisions, and communications

The Role of Post-Sale Monitoring and Social Media

Your responsibility doesn’t end when the product leaves your facility.
Cann recommends regular monitoring of consumer feedback, especially on social media. Plaintiff lawyers do this too—and may argue that the company “should have known” about certain dangers based on public posts.
When issues arise, manufacturers must act swiftly to:
  • Update product instructions or warnings
  • Issue recalls, if necessary
  • Correct misuse of educational materials

Litigation Is Sometimes Inevitable – Be Ready

Empathy and transparency go a long way—but when plaintiffs demand unreasonable settlements, going to trial may be the only option.
Schreier noted that Travelers achieved a 73% trial success rate between August 2024 and August 2025. This success was largely attributed to companies that followed proactive risk management protocols—long before the claim ever hit the courtroom.

Tort Reform and the Bigger Picture

While individual companies can do a lot to reduce exposure, lasting change will require legislative action. Schreier pointed out that states like Florida and Georgia have passed recent tort reform measures that are helping curb excessive verdicts—but many others have yet to follow suit.
Industry groups and commercial interests must continue to push for reasonable legal reforms that protect both injured parties and businesses from runaway costs.

The Hidden Influence of Litigation Funding

Third-party litigation funders are playing a larger role in prolonging lawsuits. Schreier and Lahav highlighted that some funders offer high-interest loans to plaintiffs, which can accumulate quickly. By the time a reasonable settlement is offered, plaintiffs often can’t accept without losing money.
This raises a key point: these arrangements may distort incentives and prevent fair resolutions.

In Our Opinion: How Risk Managers Should Respond

At Sadler Insurance, we believe the key to protecting your company from nuclear verdicts lies in a comprehensive, prevention-first strategy. That includes:
  • Conducting product risk audits
  • Ensuring contractual risk transfer is airtight
  • Investing in employee training on proper documentation and communications
  • Maintaining clear, caring customer relations—even when things go wrong
These aren’t just legal strategies. They’re essential components of long-term business health.

Let’s Talk Product Liability Strategy

If you’re a product manufacturer, distributor, or insurer looking to shore up your risk management program or reevaluate your current liability coverage, reach out to Sadler Insurance. We’ll help you:
  • Review existing liability limits
  • Identify gaps in vendor and supplier coverage
  • Explore custom coverage solutions for emerging product risks
Call 800-622-7370 and ask for John Sadler to start the conversation.

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