The ongoing truck driver shortage and uncertainty around tariffs aren’t the only challenges impacting fleets. A dramatic rise in so-called “nuclear verdicts” is inflating insurance premiums and even putting some companies out of business.
A nuclear verdict is a legal settlement exceeding $10 million. In 2023, courts nationwide awarded 89 nuclear verdicts, a 27% increase from 2022 and the highest number in 15 years, according to Marathon Strategies. While the median nuclear verdict was $23.8 million per the U.S. Chamber of Commerce Institute for Legal Reform, 27 cases surpassed $100 million. Others reached $500 million and even $1 billion.
Given the rising rates of litigation and escalation of premiums, fleets cannot cut corners when it comes to maintenance, driver training, or risk mitigation. These nine tips can help fleet managers limit their liability and save on their premiums.
1. Limit vehicle downtime
Mechanical failures and delayed maintenance create serious downstream effects, from missed delivery windows and rescheduling headaches to lost revenue. They also increase the reliance on costly emergency repairs or equipment rentals. To avoid these issues, fleets should set and follow proactive preventive maintenance schedules. Consider implementing fleet maintenance management systems to track each vehicle’s mileage, engine hours, and service history and receive real-time alerts for upcoming or overdue tasks.
2. Keep your fleet in compliance
Failing to meet the Department of Transportation’s (DOT) and the Federal Motor Carrier Safety Administration’s (FMCSA) regulations creates multiple risks, from rising insurance premiums and expensive fines to temporary fleet shutdowns. Non-compliance also raises the risk of accidents that could lead to litigation. By implementing a compliance management system, fleets gain a centralized place to store training records and certifications, drug-and-alcohol test results, and documentation needed to conduct routine audits.
3. Use cameras to your advantage
In the event of an accident, fleets need to collect evidence absolving them of liability. That’s why dashcams are a crucial tool every fleet should use. Dashcams provide objective, time-stamped video footage, helping fleets resolve disputes quickly and defend themselves against false claims.
4. Create a culture of safety
Show your employees that you prioritize safety at all levels. Talk with drivers and dispatchers regularly about critical topics like speed control and alertness. Encourage drivers to report any safety defects early, before they lead to a costly breakdown. Empower safety teams to conduct vehicle inspections in between scheduled maintenance appointments.
5. Vet new hires thoroughly
The driver shortage makes it tempting for fleet managers to hire less-than-qualified drivers, but that is a potentially costly mistake. Insist on hiring candidates with verified experience, clean driving records, and proper certifications. Conduct behavioral interviews and ask drivers to perform multiple road tests before choosing candidates to fill open positions.
6. Conduct ongoing driver training
Both new and veteran drivers will benefit from refreshers on safe driving habits. Offer defensive driving courses, DOT regulation quizzes, and practical safety training every six to nine months. Doing so will help your drivers remain aware and responsive on the road. It will also improve your fleet’s Compliance, Safety, and Accountability (CSA) scores.
7. Curb the most likely causes of accidents
Vehicle and tire troubles lead to fires and roadside breakdowns, two frequent causes of losses. Reduce these risks by requiring drivers and maintenance personnel to conduct pre- and post-trip inspections. Check brakes for wear, heat damage, and air system integrity. Inspect tires for tread depth, air pressure, punctures, or signs of dry rot.
8. Practice proper cargo securement
Miscommunication, especially in temperature-controlled transport and specialized freight, is the root cause of most cargo-related claims. A freight broker, for example, may communicate temperature settings or handling instructions to a dispatcher but not the driver. Likewise, drivers aren’t always present when cargo is loaded onto a trailer, yet they may be held liable for improper packaging or shifting freight. Get ahead of these concerns by developing protocols to keep drivers informed of all cargo requirements. Consider involving drivers in the loading process or requiring photographic documentation of all loads.
9. Review your insurance policies
Open a dialogue with your insurer to ensure your fleet is covered at full value. Specifically, consider these two often overlooked areas:
- Towing and storage limits. Some towing companies may issue excessive bills, especially for heavy-duty equipment. Insurers will typically only cover up to the policy limits, leaving the insured responsible for any excess charges.
- Optional coverages. Consider downtime reimbursement or loss-of-use (sometimes called “reward” or Motor Truck Cargo, Physical Damage (MTC, PD) coverages). These products can offset lost income or increased operating expenses incurred when multiple vehicles are temporarily out of service.
The best way to lower your fleet’s risk of litigation—and potential nuclear verdicts—is to limit accidents and breakdowns as much as possible. Implementing the right technology and procedures will give you peace of mind and preserve your investments in your trucks and your drivers.
