The courtroom is becoming an increasingly high-stakes arena for American businesses. A recent report by Marathon Strategies highlights a dramatic surge in “nuclear” and “thermonuclear” verdicts — those exceeding $10 million and $100 million, respectively. Among the leading contributors to these astronomical payouts? Product liability.
Product Liability: The Largest Contributor to Nuclear Verdicts
In 2024 alone, product liability cases accounted for an astonishing $13.7 billion in verdicts, making it the single most significant factor behind nuclear lawsuits. These cases often stem from claims that a company’s product caused serious harm or death, triggering both consumer outrage and legal action.
The most dramatic example cited in the report was the downfall of Real Water, a Nevada-based company whose alkaline water was found to be contaminated with a chemical used in rocket fuel. The result: over $5 billion in penalties. That’s not just a lawsuit — it’s a financial death sentence.
For businesses that manufacture, distribute, or even brand consumer goods, this trend underscores the urgent need for rigorous product safety protocols, quality control, and clear labeling. The consequences of a single lapse are no longer confined to product recalls — they now carry the potential to bankrupt a company and decimate its brand.
The Rising Cost of Failure
The scale of these verdicts has exploded. The median nuclear verdict in 2024 was $51 million — more than double what it was just four years ago. Of the 135 nuclear cases reported, nearly half involved product liability or intellectual property, with state courts overwhelmingly producing the bulk of the verdicts ($20 billion across 85 cases).
And while high-profile intellectual property and trade secret cases like Propel Fuels vs. Phillips 66 are gaining traction, product liability remains the bread-and-butter of high-dollar litigation. When a product harms a consumer, the ensuing litigation often includes compensatory damages, punitive damages, and emotional distress — all adding up to jaw-dropping totals.
Reputation, Revenue, and Risk
As Arantxa Hernandez of Marathon Strategies noted, these lawsuits are not only legal nightmares but also existential business threats. When verdicts reach hundreds of millions — or even billions — of dollars, the financial toll is only part of the story. Companies often face plummeting stock prices, shaken investor confidence, and long-lasting reputational damage. The brand erosion from media coverage alone can sink a company’s future, even if it survives the courtroom.
Industries particularly vulnerable to these outcomes include food and beverages, entertainment, agricultural chemicals, and tech hardware — sectors where product design or contamination can quickly escalate into massive liability.
Proactive Risk Management Is No Longer Optional
With product liability lawsuits now representing a major source of catastrophic legal exposure, businesses must shift from reactive to proactive risk management. This includes:
- Routine safety audits: Ensure every product undergoes thorough testing and quality checks before going to market.
- Clear consumer instructions and warnings: Reduce ambiguity that might be interpreted as negligence.
- Product recall planning: Have a rapid-response plan ready in the event of a defect.
- Liability insurance review: Evaluate current product liability coverage limits and exclusions to ensure they reflect today’s legal realities.
The Cost of Complacency
The era of the $5 billion product liability verdict is no longer hypothetical — it’s here. Businesses that underestimate the legal and financial threat posed by defective or dangerous products do so at their peril. The courtroom is now a critical front in corporate risk management, and for many, survival will depend on how prepared they are for the battle.
Get the latest insurance market updates and discover exclusive program opportunities at ProgramBusiness.com.