What a Nuclear Verdict Means for a Restaurant

A $10 million lawsuit would be the nail in the coffin for nearly every hospitality business. However, the incidence of nuclear verdicts — where a jury awards above $10 million — continues to rise. Recent data shows that U.S. juries awarded more than $14.5 billion in nuclear verdicts in 2023 — a 15-year high.

Society Insurance has spent 110 years helping protect businesses and has seen firsthand how nuclear verdicts have evolved in the U.S. Below, they share more information on what a nuclear verdict is, a state of the union of nuclear verdicts, and precautions for restaurants to take to better protect themselves against these devastating verdicts.  

What is a nuclear verdict?

As mentioned, nuclear verdicts are when juries award more than $10 million in a case. The U.S. Chamber of Commerce said in a recent report that the number of verdicts above $100 million reached a record in 2023, up nearly 400% from 2013 as reported in The Wall Street Journal’s 2024 piece, “‘Nuclear’ Jury Verdicts Rise Alongside American Anger.”

Nuclear verdicts can occur from a dispute in a restaurant parking lot to a food safety issue as well as exist outside the restaurant industry.

Be aware: certain states are more prone to outsized jury verdicts. Between 2013 and 2022, California, Georgia, Florida, Illinois, New York, and Texas accounted for 61 percent of such verdicts in the country.

What are the implications of nuclear verdicts on the rise?

Ideally, nuclear verdicts would be eliminated in favor of fair and just verdicts for restaurants. When juries award disproportionately high amounts in lawsuits, often from cases involving accidents, liquor liability, food safety issues, or employee disputes, these multimillion-dollar awards can be a death sentence for restaurants. Even if a restaurant doesn't face a verdict, the prevalence of such cases can drive up insurance premiums industry-wide, increasing operating costs. Outside of the restaurant industry, nuclear verdicts “affect almost everything, from the prices of common household products to availability and affordability of insurance,” according to Oriana Senatore, U.S. Chamber of Commerce Institute for Legal Reform Senior Vice President of Research and Strategic Development.

The need for regulation to curb these excessive awards is paramount. Caring about nuclear verdicts helps restaurants protect their financial stability, brand integrity, and long-term viability in a competitive industry.

How can restaurants better protect themselves against nuclear verdicts?

Invest in your operations and procedures to best ensure the safety of your customers and staff. Revisit your food safety protocols, regularly train your staff, storm-proof your exterior, take precautions to avoid slips, leverage security when necessary. Don’t be afraid to reach out to your insurance provider for a meeting on how you can get your restaurant into tip-top safety shape.

Despite the increase in these types of verdicts, the restaurant industry as a whole is experiencing phenomenal growth. For the first time in history, sales are forecast to top $1 trillion annually for restaurants this year and it’s estimated the industry added 200,000 jobs in 2024. While challenges –like nuclear verdicts – remain, it’s truly a historic and exciting time for the hospitality industry.

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