Munich Re Warns European Companies to Reassess US Casualty Exposure as 'Nuclear Verdicts' Climb

Munich Re, the German reinsurer, has issued a fresh warning that European businesses with any exposure to the United States may need to reassess their casualty risk. The company published its analysis on its insights site in early October, and Reinsurance News reported it on October 9. The central concern is the "nuclear verdict," which Munich Re defines as a US jury award above $10 million, and the rising frequency of such awards against corporate defendants.

The numbers behind the warning come from the 2026 Marathon Strategies Report, which Munich Re cites. In 2025, nearly 200 lawsuits against corporate defendants produced verdicts of at least $10 million, which is more than 40% above the 2024 count. More than 40 of the 2025 awards exceeded $100 million. These are counts of verdicts, not of insured losses, so they do not translate directly into what insurers paid, but they show the direction in which the tail of the litigation distribution is moving.

One recent award illustrates how far liability can reach. A US jury awarded about $604 million after a fatal truck accident. The freight broker that arranged the shipment was also held liable, although it did not employ the driver and had selected a carrier with a satisfactory safety rating. Munich Re uses the case to show that companies several steps removed from the physical event can be pulled into a verdict. Another example in the analysis involves a $310 million award to a family whose young relative died on an amusement ride, which followed a widely shared video. Munich Re says the video's influence cannot be isolated from other factors, so it is best read as a sign of how public attention can interact with litigation rather than as proof of cause.

Why are verdicts getting bigger? Munich Re points to a set of overlapping forces often grouped under the label "social inflation." Third-party litigation funding is now an established feature of the US system, which lets claimants and their lawyers pursue cases that they might otherwise be unable to finance. Plaintiffs' lawyers use social media advertising to reach potential claimants quickly and at scale. Claims inflation is outpacing general economic inflation in many casualty classes, and legal costs are rising. The reinsurer also notes that jurisdictions once seen as business-friendly are now producing large awards, which weakens the idea that a company can manage risk by avoiding a handful of notorious venues.

A common misconception for European firms is that exposure follows headquarters. Munich Re says that having no US headquarters does not mean having no US exposure. Subsidiaries, distributors, contractors, vehicles, products and customers in the United States can each create a path to a US court. The analysis adds that European courts are unlikely to produce awards on the US scale, but that European companies with US operations or commercial interests "cannot afford to regard the issue as solely a US problem." For a manufacturer that ships components to a US customer, a logistics firm that handles cargo through US ports or a software company with US users, the question is not where the company is based but where a claimant can sue.

Munich Re recommends three steps, which it labels awareness, prevention and preparedness. Awareness means mapping US exposure across operations, supply chains, contractors, products and marketing, so that risk managers know where a claim could come from. Prevention means keeping internal safety and quality standards realistic, applying them consistently and documenting them, because failing to follow a company's own written guidelines can be especially damaging in front of a jury. Preparedness means planning early claims management, coordinating insurers, lawyers and communications teams, and arranging access to local legal expertise before an incident rather than after it.

The company also flags a longer-range risk. Litigation over ultra-processed food is described as an early-warning example. Munich Re says it is uncertain whether the claims will develop into a major mass tort, and suggests monitoring regulatory definitions, new scientific evidence, enforcement activity, marketing-related claims and coordination across jurisdictions. The point is that new categories of liability can emerge faster than insurance wording and pricing adjust to them.

For buyers of insurance, the practical implications fall into three areas. First, check whether your liability limits are adequate for a worst-case US verdict, including whether your umbrella or excess layers sit above the primary policy and whether the policy territory and jurisdiction clauses cover US suits. Second, review contracts with US partners, including indemnities and additional-insured provisions, because who bears the cost of a verdict is often decided in the contract. Third, ask your broker how insurers are pricing casualty layers that have US exposure, as higher verdicts and the possibility of reserve increases tend to feed into renewal terms.

There are limits to what a single report can show. The figures reflect reported verdicts rather than final payouts, since large awards are often reduced or settled after trial. The analysis comes from a reinsurer with a commercial interest in how casualty risk is priced, which does not make it wrong but is worth remembering. Even so, the message to treat US casualty exposure as an enterprise risk rather than a niche concern is one that many risk managers will want to take on board as year-end renewals approach.