How Social Inflation and Nuclear Verdicts Continue to Shape the Liability Landscape

For those familiar with the legal landscape in the United States, it comes as little surprise that social inflation remains a growing concern. In 2024, 135 lawsuits against corporations resulted in "nuclear verdicts," defined as jury awards exceeding USD 10 million. Moreover, the frequency of even larger awards, known as "thermonuclear verdicts", where damages surpass USD 100 million, also continued to increase, with 49 such verdicts issued during the year. Notably, five of these rulings exceeded USD 1 billion in damages. According to data from Marathon, this resulted in a 52 percent increase in nuclear verdicts in 2024 compared to the prior year. Ultimately, a significant share of these costs is absorbed by insurers, contributing to higher premiums.

It is also worth noting the sharp increase in attorney advertising targeted at potential plaintiffs, with annual spending now exceeding USD 2.4 billion. The underlying drivers of rising social inflation and litigation frequency are complex and multifaceted. Commonly cited factors include a growing scepticism toward corporations, plaintiff‑friendly legal frameworks in many states, and the increasing involvement of investors seeking to finance litigation as a source of returns. Reflecting these dynamics, Swiss Re notes in a 2024 report that claims costs in the United States attributable to social inflation increased by 5,4 percent year on year between 2017 and 2022, significantly outpacing general economic inflation of 3,7 percent over the same period.

Looking ahead, the rapid adoption of large language models (LLM) in everyday business processes represents a growing area of legal uncertainty, particularly in relation to liability. These technologies are widely expected to contribute to increased litigation, as they enable higher volumes of legal actions and facilitate the coordination of complex and large‑scale claims, including class actions.

Lawsuits driven by these dynamics span a broad range of sectors, from construction and engineering, oil and gas, to media and entertainment, as well as the beverage industry. Few industries remain untouched by such scrutiny, underscoring the need for robust risk management across all sectors. While discussions around tort reform have intensified in response, they have yet to produce meaningful change, and current indications suggest that these trends are likely to persist in the near term.

Building Resilience

A robust risk management strategy is therefore essential to ensuring operational safety and product integrity in day‑to‑day activities, thereby reducing the likelihood of situations that may give rise to litigation. While accidents and legal disputes can never be fully eliminated, the financial and operational benefits of proactive risk management and effective mitigation measures can be substantial.

Mitigation, however, represents only one part of the equation. As litigation may ultimately be unavoidable, it is equally important to have a clear and well‑prepared strategy for managing legal cases when they arise. This includes, for example, establishing relationships in advance with suitably experienced legal counsel to ensure a timely, coordinated, and effective response.

These trends also highlight the importance of close cooperation between companies and insurers in managing risk and exposure. Adequate casualty insurance is a critical component of any comprehensive risk management strategy. Zurich Insurance has a long‑standing presence in the US market, supported by dedicated specialists and resources with deep expertise in managing these complex liability risks.

For further information on how Zurich Nordic can help your organization build resilience, please contact Axel Åberg, Claims Handler Liability.