In recent years, insurance claim amounts have risen sharply, fueled by an increasing tendency for juries to award plaintiffs massive sums when a business is the defendant. 

This phenomenon is known as “social inflation.” Social inflation is spurred by growing public distrust and negative sentiment toward businesses. These emotions, combined with a jury’s desire to secure perceived justice and compensation for plaintiffs it feels are wrongly injured, is resulting in higher punitive damages being the norm. This is particularly true when the litigation centers on a company driver involved in a vehicle crash.

So what does this mean for business owners? More uncertainty. Potentially higher insurance premiums brought on by more expensive losses industry-wide. A riskier business landscape. While there is no way to predict the outcome of a trial with certainty, you can help reduce the chances that your business will experience a catastrophic verdict.

Strengthen your policies — especially your company driving policy. Prohibit mobile device use and other distractions, and remind employees to check their speed, avoid driving fatigued, and focus on the road while operating company vehicles or driving for business purposes.

Enforce your policies. Without enforcement, you could appear more negligent to a jury, potentially leading to higher damages.

Train — and retrain — your employees. Introduce company policies and best practices to employees upon hire and regularly review them with your staff. Present the information in fresh, memorable ways to increase retention. 

Go beyond the minimum. Create policies that follow federal, state and local regulations, but don’t stop there. Consider prohibiting additional risky behaviors, where allowed by law. Going above and beyond what’s mandated could help prove your business is committed to helping keep your drivers safe on the road.

Don’t rest on your insurance policy. Rising claims amounts aren’t just a problem for insurance companies. The amount a jury decides a business owes a plaintiff might exceed that business’s policy limits — and even its umbrella if it has one. If that happens to you, could you cover the excess amount and still keep your business afloat?

Make safety a cultural value. If you can show that safety is among your foremost concerns, this could help support your defense against a claim of negligence, possibly reducing any potential settlement amount or jury award.

It’s easy to emphasize the dollar amounts — after all, seven- or eight-figure sums are huge and, in most cases, unprecedented. But what’s really important is preventing injuries and deaths. Our current environment is an opportunity to help protect your bottom line and employees. Evaluate your policies, look for opportunities to reduce distractions, strengthen your safety culture, and help make the road a safer place.

Federated Insurance is an ASA Association Partner, and is ASA’s recommended insurance provider. To learn more, visit