The Story You’re Being Sold

There is a well-funded, carefully crafted story circulating in boardrooms, insurance conferences, and political lobbying circles across America. It goes something like this: lawsuits have gone “nuclear,” greedy trial lawyers are manipulating jurors with psychological tricks, and the whole mess is raising your insurance premiums. The solution, according to this narrative, is to limit the rights of injured people and cap what a jury can award, make it harder to hire a lawyer on contingency, and narrow who “really” qualifies as seriously injured.

The insurance industry has a term for large jury verdicts: “nuclear.” Defense attorneys and corporate lobbying groups repeat it constantly. The word is chosen deliberately. It evokes catastrophe, chaos, and irrationality -- the idea that something has gone terribly wrong when a jury awards a seriously injured person substantial compensation.

But before accepting this framing, New Yorkers should ask a straightforward question:

Who is behind this message, and what do they stand to gain?

Follow the Money: Record Profits While Crying Poverty

The insurance industry’s central argument is that large verdicts and aggressive plaintiff litigation are driving up costs and threatening market stability. The facts tell a sharply different story.

Property and casualty insurers made a record $169 billion in profit in 2024 â€” a 90% increase from the prior year and a 333% increase from 2022. At the same time, these same companies raised auto insurance rates by an average of 26%, with some states seeing increases exceeding 40%. The industry also posted record investment income of $89 billion in 2024, a 20% year-over-year increase driven by higher interest rates and bond yields.

The National Association of Insurance Commissioners (NAIC) confirmed that the P&C industry recorded its best underwriting gain in nearly 20 years in 2024 — a $25.4 billion underwriting profit, the strongest result since 2006. Policyholders’ surplus climbed to an all-time high of over $1.1 trillion.

This is not an industry in crisis. This is an industry using the language of crisis to extract more from consumers while paying less to the people it injures.

What “Nuclear Verdicts” Actually Represent

The insurance industry defines a “nuclear verdict” as any jury award exceeding $10 million. The term was coined by defense attorneys -- not by courts, not by legislatures, and not by the public. It is a marketing term designed to make full compensation for catastrophic injury sound unreasonable.

Consider the cases that actually produce these verdicts:

• A construction worker who falls from a scaffold and suffers a permanent spinal cord injury, requiring decades of medical care and losing the ability to support his family

• An 84-year-old nursing home resident who falls out of bed due to staff neglect and dies from a traumatic brain injury

• A child who suffers permanent brain damage during delivery due to a doctor’s failure to respond to clear warning signs

• A family that loses a parent to a preventable death, leaving behind young children with no financial support

These are not lottery winners. These are people whose lives have been permanently destroyed by someone else’s negligence -- and juries, after hearing all the evidence, determined that their losses warranted substantial compensation.

Here is something the insurance industry rarely mentions: there is a massive gap between what juries award and what injured people actually receive. Seventy-four percent of patients receive less than the jury verdict. When verdicts exceed $10 million, the injured person receives on average 65% less than the verdict amount --primarily because insurance policy limits are too low to cover the full award. In other words, juries are not wildly overcompensating victims. Insurance companies are structurally underfunding coverage.

The “Social Inflation” Myth

Insurance industry publications have popularized another piece of language: “social inflation.” The concept holds that rising verdicts are not the result of more serious injuries or greater corporate negligence -- they are the result of plaintiff attorneys manipulating jurors, a hostile public attitude toward corporations, and third-party litigation funding.

This framing is misleading on multiple levels.

First, it misattributes causation. If juries are more willing to hold corporations accountable for serious injuries, the more obvious explanation is not manipulation -- it is that corporations are, in fact, causing serious injuries, and the public knows it. Whether it is a nursing home operator cutting staff to maximize profits, a trucking company ignoring driver fatigue, or a property owner ignoring known hazards, the conduct underlying large verdicts is real and documented.

Second, it ignores what plaintiffs’ attorneys actually do. Personal injury lawyers working on contingency are the only mechanism by which ordinary people can stand up to corporations and insurance companies that have entire legal departments devoted to minimizing claims. A contingency fee arrangement -- where the attorney earns nothing unless the client wins -- is not predatory. It is the engine of access to justice for people who cannot afford hourly rates.

Third, juries are not fooled. Twelve ordinary people sit through weeks of evidence, cross-examination, and expert testimony before reaching a verdict. The idea that plaintiff attorneys can systematically mislead juries into awarding arbitrary sums, and that this happens routinely across thousands of cases, does not reflect how jury trials actually work.

The Human Cost of Tort Reform

When lawmakers accept the insurance industry’s narrative and enact “reforms” -- caps on damages, narrowed definitions of serious injury, restrictions on contingency fees -- the consequences fall on real people.

Research on aggressive tort reform in states like Texas found that restricting damages and contingency fees severely curtailed ordinary citizens’ ability to obtain judgments against negligent parties. Plaintiffs’ lawyers are the civil justice system’s gatekeepers -- without them, injured people have no meaningful access to courts. Tort reform didn’t produce lower insurance premiums; it produced a legal system where injured patients, nursing home residents, and construction workers could no longer hold corporations accountable.

In New York, the same playbook is unfolding. Recent proposals backed by a multi-million-dollar lobbying campaign include narrowing the serious injury threshold, limiting non-economic damages, and eliminating the legal category most often used by injury victims. Despite the “affordability” framing, these reforms would primarily benefit insurers already posting record profits -- while injured New Yorkers are left to pay their own medical bills.

Capping a jury’s ability to award damages does not make you safer. It does not improve medical care in nursing homes. It does not make construction sites less dangerous. It simply limits how much money an injured person can recover from the companies responsible for hurting them.

New York’s Safety Laws Work — and They Are Under Attack

New York’s Labor Law §§ 240 and 241, commonly known as the Scaffold Law, has imposed strict liability on property owners and contractors for elevation-related hazards on construction sites. The result has been measurable: construction worker deaths in New York City dropped from 28 fatalities in 2014 to just 7 in 2023 -- among the lowest in nearly ten years.

Insurance industry lobbyists have argued that the Scaffold Law inflates costs through fraudulent claims. But data consistently shows that the actual rate of fraudulent workers’ compensation claims nationwide falls between 1-2%. Over 98% of injury claims are legitimate.

When fall-from-height accidents do happen on construction sites, they are among the most devastating and deadly workplace injuries imaginable. The workers involved --many of them immigrant laborers -- deserve full protection under the law, not a system stripped of accountability to protect contractor profit margins.

Nursing Homes: When Insurance Becomes a Paper Shield

A particularly troubling structural problem has emerged in nursing home litigation. Across New York, many nursing homes carry liability insurance “in name only” --policies issued by captive insurance companies secretly controlled by the nursing home owners themselves. These captive insurers are often underfunded, sometimes insolvent, and in some cases never receive the premiums they are owed.

When residents suffer preventable injuries -- untreated bedsores, fatal infections, falls, medication errors-- families often discover the truth at the worst possible moment: the insurance coverage the facility claimed to carry is financially worthless. This is not accidental. It is a structural design to shield nursing home profits from accountability.

New York law provides robust protections for nursing home residents through Public Health Law § 2801-d, which creates a private right of action for deprivation of residents’ rights and permits punitive damages where conduct is willful or in reckless disregard of residents’ rights. These protections exist for a reason: nursing home residents are among the most vulnerable members of society, and without the threat of accountability, operators have every financial incentive to understaff and cut corners. The insurance industry’s answer is to limit these lawsuits. The correct answer is to enforce them.

What the Jury System Is Supposed to Do

The civil jury system is not a social welfare program, and it is not a lottery. It is a constitutional mechanism -- rooted in the Seventh Amendment -- by which ordinary citizens hold those who cause harm accountable. It is how a construction ironworker with a permanently damaged spine recovers the resources to care for himself and his family. It is how a family that loses a parent to a preventable death is compensated for what they have lost.

Large verdicts are not evidence that something has gone wrong. In cases involving catastrophic, life-altering, preventable injuries -- where a corporation ignored known safety risks, where a nursing home cut staffing to maximize profits, where a negligent driver destroyed a family -- large verdicts are evidence that the system is working exactly as it should.

Real People. Real Injuries. Real Justice

The “litigation crisis” narrative is not a neutral observation. It is a lobbying strategy funded by one of the most profitable industries in the American economy, directed at limiting the rights of injured people who have no comparable lobbying power.

The people on the other side of these lawsuits are not abstractions. They are:

• The ironworker who fell from a scaffold and can no longer walk without pain

• The nursing home resident who died from an infected bedsore because no one bothered to turn her

• The child with permanent brain damage because a hospital ignored warning signs during delivery

• The family whose breadwinner never came home because a contractor decided safety equipment was too expensive

For these people, a lawsuit is not a “jackpot.” It is the only mechanism the law provides to make them whole -- to transfer the cost of someone else’s negligence from their shoulders to where it legally and morally belongs.

When insurers report record profits while lobbying to strip your rights away, ask yourself: who is this system really designed to protect?

If you or a loved one has been seriously injured due to another’s negligence in a construction accident, a nursing home, a medical setting, or otherwise, contact Leitner Warywoda PLLC. Our attorneys have recovered over $250 million for injured New Yorkers. We fight for real people against well-funded defendants, and we don’t get paid unless you do. Call us today for a free consultation.