By Nate Oland, Senior National Account Executive, Federated Mutual Insurance Company
Vehicle crashes can be expensive and devastating. Jury awards against electrical contractors have skyrocketed in recent years when company drivers are involved in vehicle crashes. Many believe this is due to “social inflation,” the negative public sentiment and mistrust towards businesses among jury members. Jurors appear to no longer be looking to simply compensate for bodily injuries and pain and suffering. Instead, they are sending a clear message to businesses by returning “nuclear verdicts” on claims for damages allegedly caused by the businesses’ employee drivers. A nuclear verdict is an award that is significantly higher than would be expected given the facts of the case, and can be loosely defined as an award exceeding $10 million.
Further complicating potential court cases is an emerging phenomenon known as third-party litigation funding. Private investors are providing financial backing to plaintiffs and/or attorneys with the goal of achieving a return on investment from large jury awards.
The impacts of social inflation can be long-term, and can cripple your business, but they can also be avoided. It is important to have a thorough understanding of what contributes to social inflation, and learn the best ways to help protect your drivers and your company from costly jury awards. Consider a few key factors that can make social inflation so treacherous:
Mistrust of corporations
Negative public sentiment plays a huge hand in increasing jury awards against businesses.
Emotions that influence jurors
“Reptile theory” is a litigation strategy where attorneys appeal to the reptilian or primitive part of jurors' brains focused on safety and survival. Plaintiffs’ attorneys cleverly craft arguments that tap into jurors' instinct to alleviate perceived threats to public safety.
Desensitization to the value of money
Attorneys may engage in “anchoring,” which involves demanding or referencing an inflated financial award during the course of a trial in the hopes that such a number will "anchor" in the jurors' minds as a starting point when determining awards and penalties. Anchoring large sums in someone’s mind can desensitize them to the true value of that money.
Knowing that social inflation, nuclear verdicts, and third-party litigation are working against you, implementing or enhancing a company driving policy is more important than ever. Here are few things to consider when striving to help protect your company, and your drivers, on the roads and in the courthouse.
Develop a Strong Driving Policy
A strong company driving policy could:
- Prohibit company drivers from using mobile devices and other distractions behind the wheel
- Incorporate driver standards and, where appropriate, screening for company drivers
- Outline expectations for safe vehicle usage
- Clarify consequences for failure to follow the company policy
- Go beyond the minimum local, state, and federal laws applicable to your business
Communicate Your Policy
Every employee should be trained, and regularly retrained, on your driving policy. Present information in a fresh and memorable way to increase retention when you reinforce the policy with your team, and ensure that employees have access to resources that can help them stay safe behind the wheel.
Document Your Training
Be sure to keep records of the training your employees have completed. A safety meeting sign-in sheet can help accomplish this. You may also consider having employees acknowledge in writing that they have both read your driving policy and agree to abide by it.
Enforce Your Policy
Follow through on the consequences of failing to comply with your company driving policy consistently. If a jury sees that your policy lacks “teeth,” this could help support the plaintiff’s claim that your business was negligent.
Make Safety a Company Value
Encourage a company culture of safe driving. Demonstrating a strong commitment to workplace safety can go a long way in not only helping to prevent vehicle crashes from happening in the first place, but also helping convince a jury that your business did not act negligently should you find yourself in court.
One of best ways you can help defend yourself against the skyrocketing costs of crash-related litigation is preventing the crash from happening the first place. While the large sums handled down by juries are daunting—especially when they could exceed your insurance umbrella limits—the most important thing is keeping your employees safe behind the wheel.
Stay aware of the repercussions of vehicle crashes and leverage today’s current legal environment as an opportunity to help better protect your company drivers. Evaluate your company policies, look for opportunities to reduce distractions, reinforce your safety culture, and help make our roads a safer place for everyone.
This article is for general information only and should not be considered legal or other expert advice. The information herein may help reduce, but is not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances and in developing policies for your business.
© 2021 Federated Mutual Insurance Company.