Business Issues

By Kevin Cunningham

Editor’ s Note: This is the first of three articles by insurance industry expert Kevin Cunningham addressing the malady of rapidly rising insurance costs in the crane and heavy-haul industries. Look for the upcoming stories in the October and November editions of Crane Hot Line.

These two factors are prevalent today in all industry segments, but especially in high-hazard businesses.

In recent years, nuclear verdicts have grown in size, scope and frequency, mainly because when an accident happens, private equity companies and plaintiffs’ lawyers are more often using TPLF.

For readers not familiar with the insurance business or legal profession, TPLF involves a deep-pocket investor, such as a private-equity company, investing money so attorneys can mount a well-funded case on behalf of a plaintiff in order to win an exorbitant amount of money that everyone can split.

TPLF does not aim to get a fair settlement for an injured plaintiff; it looks to win a lot of money for the attorneys and the investors.

The insurance industry( insurers and reinsurance companies) pays the price for these unfairly large verdicts, which hurt not only the overall insurance industry but also the companies it insures, for example crane owners.

The result is that all insurance buyers are feeling the pain of rising costs, and crane

company owners are feeling the brunt, due in large part to the potential high severity exposure inherent in crane operations.

Crane owners need to understand how and why nuclear verdicts can arise, and what they can do to curb crane accident exposure in order to avoid growing claim litigation.

Drivers of Nuclear Verdicts

According to the U. S. Chamber of Commerce Institute for Legal Reform, nuclear verdicts are fueled by many direct and indirect factors.

In the courtroom, plaintiffs’ lawyers often use tactics that manipulate jurors to arbitrarily inflate damages.

For example, they resort to“ Reptile Theory” tactics to make jurors feel fear or danger so that they will lash out at their perceived attackers( the defendants) by awarding a plaintiff inflated damages.

Additionally, in the courtroom, plaintiffs’ attorneys often suggest that the jury award an exorbitant amount of damages, which those attorneys present as being carefully calculated, but which are totally arbitrary.

Outside the courtroom, plaintiffs’ lawyers have recently adopted“ lead generating” tactics that flood local airwaves with lawsuit advertising that touts extraordinary verdicts.

Its goal is to shape potential jurors’ opinions of appropriate compensation levels.

In recent years, plaintiffs’ attorneys have been encouraged and enabled to pursue those despicably manipulative tactics TPLF organizations.

The TPLF arrangement pays funders a return for investing to drive the cost of a lawsuit settlement as high as possible.

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September 2025 • www. cranehotline. com