New York Law Journal, “Defending the Nuclear Verdict: Rethinking High-Exposure Claims Before Trial,” by Christopher Arcitio, Esq. and Monique Allen, Esq., 10-5-2026

Kaufman Dolowich’s Christopher Arcitio, New York City Partner, and Monique Allen, New York City Associate, recently authored an article in the New York Law Journal examining how insurers and defense counsel can proactively manage high-exposure claims and mitigate the risk of nuclear verdicts—jury verdicts of $10 million or more—before trial.

Read the full article below: 

Defending the Nuclear Verdict: Rethinking High-Exposure Claims Before Trial

The article recommends managing potential “nuclear verdict” cases proactively: identify risk early, reassess valuations as evidence develops, investigate and prepare the defense promptly, time settlement discussions strategically, and keep all insurers and the insured informed—especially when exposure may exceed policy limits.

By Christopher Arcitio and Monique Allen

October 5, 2026

 “Nuclear verdicts”—a term commonly used for jury verdicts of $10 million or more—have become an increasingly significant concern for defendants, insurers and counsel handling high-exposure claims.

Much of the discussion surrounding nuclear verdicts has focused on the forces behind their growing prominence. Recent data illustrates the scale of the trend.

A report released by Marathon Strategies in August identified 190 nuclear verdicts against corporate defendants in 2025, a 40.7% increase from the prior year. Corporate mistrust, evolving jury attitudes and increasingly sophisticated litigation strategies have all been cited as potential contributing factors.

For insurers and defense counsel, however, there is a more immediate question: Assuming risk transfer is not viable, how should those trends change the way potentially high-exposure claims are handled before trial?

For New York insurers and defense counsel defending catastrophic-injuries, premises-liability and construction accidents claims involving major New York City developments, early identification of cases with the potential for unusually large verdicts and development of evidence to mitigate that risk are critical.

The answer is not that every potentially high exposure verdict claim with an uphill battle on liability should settle. Some cases should be tried. But defending against a nuclear verdict begins long before trial.

The possibility of a particularly large verdict makes it increasingly important to identify that risk early, reassess assumptions and make deliberate decisions about investigation, litigation and obtaining leverage for potential resolution.

Identify the Risk Before the Case Becomes a Nuclear Case

A catastrophic injury does not necessarily make a case a nuclear-verdict candidate. Conversely, a seemingly manageable claim can develop significantly greater exposure.

Early evaluation should, therefore, extend beyond calculating likely non-economic and economic damages and assigning percentages to liability.

The nature and permanence of the plaintiff’s injuries matter, but so do the venue of where suit is filed, the story those injuries present to a jury and the defendant’s acts or alleged omissions.

A case becomes more difficult when the plaintiff can shift the focus from an isolated accident to an allegation that the defendant disregarded a known safety risk, ignored prior warnings or placed financial considerations ahead of safety.

Venue matters as well. Local verdict history, the characteristics of the venue and prevailing attitudes reflected in comparable cases may affect the risk presented by otherwise similar claims. The identities and credibility of the plaintiff and defense witnesses, the quality of contemporaneous documentation and the availability of persuasive experts should likewise inform the evaluation.

Insurers and counsel should also pay attention to how plaintiffs’ attorneys are developing the damages case, particularly when a plaintiff attempts to significantly increase the potential verdict value of their case by undergoing additional surgery several years later and attempts to causally link the surgery to the accident.

Towards that end, a settlement demand that departs from historical resolution values may be easy to dismiss as unrealistic and reversed on appeal.

But it may instead signal how counsel intends to frame damages for a jury including that the plaintiff did not sustain injuries from the accident, that the plaintiff’s injuries are preexisting and/or not causally related to the accident, and that the plaintiff’s injuries are nothing more than soft tissue and have fully resolved.

The objective is not to predict a nuclear verdict, but to recognize characteristics that justify treating a case differently before positions become entrenched.

Stress-Test the Valuation

Claims professionals understandably rely on experience, comparable settlements and verdict data when valuing cases. Those tools remain important. But in an environment of increasingly severe verdicts, historical averages may not fully capture a case’s potential exposure. Stress-testing the case by testing all possible “what-ifs” is recommended

The point is not to value every claim according to its worst imaginable outcome. Doing so would distort settlement decisions in the opposite direction. Instead, insurers should distinguish between an outcome that is merely conceivable and one that is sufficiently plausible to affect strategy.

Valuation also should not be static. Discovery may materially change the exposure. A damaging deposition, an unfavorable discovery ruling, partial summary judgment on liability, prior and subsequent personal injury accidents, favorable surveillance, expert opinions or an unfavorable evidentiary ruling necessarily require reassessment.

Build the Defense Early

By the time a high-exposure case approaches trial, the factual record, witness impressions and themes likely to shape the verdict may already be difficult to change, making prompt, focused investigation critical. Relevant records should be identified and preserved. Witnesses should be located and interviewed immediately while memories are fresh.

Potential inconsistencies should be understood before depositions rather than discovered during them. In cases requiring technical or medical expertise, appropriate experts should be identified early enough to help counsel understand not only how to rebut the plaintiff’s theory but also where the defense may be vulnerable.

Finally, investigation into the co-defendants’ potential exposure to the alleged nuclear verdict should be explored to get their support in building the defenses against these verdicts.

Early investigation can also affect how the case is presented. A defense that is technically correct but difficult to explain may be less effective before a jury than anticipated. Conversely, facts that initially appear unfavorable may become more understandable when placed in context.

Insurers and defense counsel therefore should consider not only whether they have a legally viable defense, but whether that defense can be communicated credibly to jurors.

The insured should be part of that assessment. In a serious case, counsel needs to understand how company representatives are likely to present and perform as witnesses, whether internal documents are consistent with the proposed defense and whether there are facts that could undermine the credibility of the company’s position.

Rethink When to Discuss Resolution

Mediation and a simple telephone call to plaintiff’s counsel at the beginning of the case are often most productive after the parties have enough information to realistically assess liability and damages. But the timing of those discussions can itself affect the parties’ ability to achieve a favorable resolution.

Settlement opportunities can narrow as litigation progresses. Plaintiffs may become more confident after favorable depositions or discovery rulings. Defense costs may increase expectations. A demand that was potentially achievable earlier may disappear after the plaintiff’s counsel has invested substantial resources in preparing for trial and if investigation reveals that plaintiff obtained a law loan.

That does not mean insurers should pay inflated early demands simply because a large verdict is theoretically possible. Rather, the timing of these discussions should be treated as part of the overall risk analysis. Signaling that a defendant is not “desperate” to resolve a case early can also help position the parties for a more favorable resolution.

In some matters, discovery is necessary before meaningful negotiations can occur. In others, an early mediation may allow the carrier and insured to explore resolution before positions harden. Still, others may benefit from multiple attempts at mediation as the factual record develops.

The important question is not simply, “What is this case worth?” It is also, “When are we likely to have the greatest ability to resolve it on acceptable terms?”

Watch the Limits

Analysis becomes more complicated when potential exposure approaches or exceeds available insurance limits. At that point, communication becomes particularly important.

The insurer, insured, defense counsel and, where appropriate, excess and umbrella carriers should have sufficient information to assess developments affecting exposure, subject to applicable policy terms and obligations under the law.

A claim initially expected to remain within primary policy limits can change quickly. Discovery may increase projected damages, weaken a liability defense or create a new theory of recovery. When that happens, delayed communication can leave excess and umbrella insures trying to evaluate a complicated case after critical litigation or settlement decisions have already been made.

Policy limits should therefore be considered throughout the life of a high-exposure claim, not merely when a settlement demand reaches them, and excess and umbrella insurers should be put on notice of a claim when practical.

Clear and frequent reporting also helps distinguish disagreement from surprise. Claims professionals, insureds and attorneys may value a case differently. The goal is not unanimity but ensuring that relevant decisionmakers receive and understand the material facts, potential outcomes and reasoning behind the defense strategy.

The Goal Is Deliberate Decision-Making

No strategy can eliminate the possibility of a nuclear verdict, and even a well-defended case can produce an unexpected result. Fear of an unusually large award should not cause insurers to abandon defensible cases or accept unreasonable demands.

The better response is disciplined claims management that recognizes potential exposure early, coordinates with all invested parties including claims professionals, defense counsel, coverage counsel, the insured and excess and umbrella carriers, and adapts as the case develops.

Early warning indicators that should trigger an increased level of investigation, refined and continued valuation, updated defense strategy, and frequent reporting can include the nature/severity of the injury, whether the plaintiff can return to work, vulnerable liability defenses, potentially damaging discovery or evidence of actual or constructive notice, a compelling plaintiff narrative, and/or potential exposure beyond the available policy limits.

Christopher Arcitio is a partner with Kaufman Dolowich. Monique Allen is an associate with the firm.

Reprinted with permission from the Oct. 5, 2026 edition of “New York Law Journal” © 2026 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.