This story originally published March 13, 2020. This is the second of a two-part series on the growing trend of large court-ordered settlements in truck crash lawsuits. Read Part 1 here: Mega settlements in truck crash lawsuits ‘strangling the industry’ as calls for reforms mount.
In post-crash litigation in which juries order trucking companies to pay multi-million-dollar settlements, who actually foots the bill?
Mostly, it depends on the fleet, their size and their type of insurance.
Many larger fleets are self-insured up to a point, meaning they are on the hook for a certain amount of liability before their insurance company takes over. In the case of some of the largest trucking companies, they may be self-insured for $10 million, said attorney Charles Carr of the Birmingham-based law firm Allison Carr. If such fleets are hit with a verdict higher than $10 million, the trucking company would then have to payout $10 million before insurance comes in to pay the rest.
For smaller fleets that may just have $1 million in liability insurance coverage, which is common normal coverage amount (federal law requires a minimum of $750,000) the money owed in a verdict has to come from somewhere, Carr said.
“If there’s a $21 million verdict with only a $1 million policy, [the plaintiff’s] options are to either walk away and take the million and forget about the other $20 million or sue the insurance company that only offered $1 million for bad faith. Or if it’s a solid trucking company with trucks in their yard, send the sheriff in to seize those trucks and sell them,” Carr said.
Lee Parsley, general counsel for litigation reform group Texans for Lawsuit Reform, said the verdict amount announced from such cases isn’t always what gets paid out. In Texas, punitive damages, which are intended to punish the recipient on top of economic and non-economic damages, are capped based on a formula using economic and non-economic damages. That cap, however, is calculated post-trial.
