Telematics Offers Hope in the Nuclear (Verdict) Era By Marco Encinas Fatal accidents are a tragic occurrence for all parties involved. The transportation industry – including telematics providers – should make preventing these tragedies its highest priority. With the use of telematics, the latest in video technology, and connected vehicles, many of these incidents can be prevented through consistent – and proactive – vehicle maintenance and continuous driver monitoring, coaching and evidence-based accountability, saving countless dollars across the industry and, more importantly, many lives. For better or worse, the proliferation of civil cases with jury verdicts totaling more than $10 million, known as “nuclear verdicts,” has significantly altered the business of fleet management. For instance, insurance premiums have doubled every several years while general inflation marches at a much slower pace, according to The Wall Street Journal. When a nuclear verdict hits a mid-sized trucking company, 16 | SPRING 2021
it often triggers a ripple effect throughout the industry. While the company that faces the judgment could be bankrupted, others that have nothing to do with it could see their insurance premiums spike as well. This economic fall-out comes from the financial needs insurance providers have to keep cash reserves available for massive verdictinduced payouts. With more nuclear verdicts in the industry, more cash is needed. With every verdict, each fleet client is seen as a riskier and riskier business—even if nothing has changed within a particular fleet. In order to collect so much money, insurance companies have been increasing premiums on a regular basis, and those growing costs have cut deep into the profits of fleet managers. The only way to reverse it is through serious investments in safety, especially telematics solutions. With fewer accidents comes fewer civil complaints and, ultimately, a rebalancing of the risk equation from an actuarial standpoint, which benefits everyone.
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The potential to protect drivers and pedestrians cannot be understated. Telematics solutions when implemented with driver safety education, accountability and disciplinary action for negligent drivers will prevent the tragic loss of life more effectively than even the harshest nuclear verdicts because they are based on proactive and predictive analytics— not a reactive civil procedure that only begins after the tragedy has occurred. Currently, juries have been triggering huge payouts, and much has been made about their validity. Some legislators have called for capping nuclear verdicts to stabilize the economics within the sector, while others have called for steeper burdens of proof. But whether you are for reforming liability laws or just think the system is unfair, we should acknowledge that nuclear verdicts do in fact serve a very important purpose in the transportation industry—they hold fleet businesses to a higher accident accountability standard, given the
