The spread of so-called "nuclear verdicts" in court cases – those involving jury awards over $10 million – spell trouble for HNW and UHNW individuals and families, not just corporations. This article explains approaches to getting in front of the problem.

The authors of this article are Kenneth Golsan, co-founder and CEO of Golsan Scruggs, and Craig Cartmill, director of Golsan Scruggs Private Client. Golsan Scruggs is an insurance broker for the financial services industry. The editors are pleased to share this content; the usual editorial disclaimers apply to views of guest contributors. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com.

In July 2024, the Wall Street Journal published an article entitled Nuclear Verdicts by Juries Get More Common. The article highlighted the rising trend of social “class warfare” fueling “nuclear” verdicts – defined as exceptionally large jury awards exceeding $10 million – against not just America’s corporate community but high net worth individuals and families. That article, inspired US Chamber of Commerce research into the matter, should have stopped every wealth manager cold. 

While much of the attention on the issue has focused on corporations, the research made clear that HNW individuals and wealthy families increasingly find themselves in these crosshairs. That makes nuclear verdicts a problem for wealth managers and family offices.

This isn’t a marginal risk. An advisor can guide a client in optimally structuring investments, minimizing taxes, and planning for generational transfer, only to find that a tremendous amount of capital is wiped out all at once, solely because personal risk management didn’t keep pace with the realities of today’s litigation environment.

Consider this scenario, which we’re seeing with increasing frequency: A homeowner hires a contractor to renovate or expand their property. During the project, an employee of the contractor suffers a severe injury. Under most state workers’ compensation statutes, that employee is entitled to benefits on a no fault basis and, in exchange, waives the right to sue the employer. But workers’ compensation benefits are statutorily limited and exclude the types of damages (pain and suffering, emotional distress, and punitive awards) that drive nuclear verdicts.

In severe cases, injured workers and their attorneys begin looking elsewhere for recovery. Homeowners, especially those with visible wealth, become attractive targets. Even when fault is minimal or nonexistent, plaintiffs file lawsuits to explore whether another deep pocket exists. The legal principle that enables this is known as “vicarious liability,” where one party is held responsible for the acts of another within certain relationships. These exposures are not hypothetical. They are expanding, and, increasingly, arising from the routine parts of affluent life: household staff, contractors, volunteer activities, nonprofit board service, private events, and more.

Many wealth managers take comfort in the assumption that extensive insurance solves this problem. If only it were that simple.

First, personal umbrella and excess liability policies can play a critical role in protecting clients, but only if they are properly designed. These policies typically sit in excess of underlying insurance and are governed by detailed schedules, definitions, exclusions, and endorsements.

Coverage often follows underlying forms, meaning gaps below can become gaps above. Certain modern exposures, including those arising from third-party relationships or nontraditional activities, may require endorsements that not all carriers are willing to provide. Simply seeing a multimillion dollar umbrella on a balance sheet is not enough to conclude that the risk has been addressed.

Second, the issue is compounded by a common misconception that a contractor’s insurance automatically protects the homeowner. In most standard, unmodified business insurance policies, that is not the case. Without proper contractual risk transfer, such as additional insured status backed by the appropriate policy language, the homeowner may remain fully exposed. This is not a failure of insurance; it is a failure of risk management coordination and oversight.

Public research underscores why this matters now. According to the US Chamber of Commerce Institute for Legal Reform, nuclear verdicts have risen steadily over the past decade, excluding temporary pandemic-related disruptions, and continue to trend upward. These verdicts increasingly rely on noneconomic damages and are influenced by jury “anchoring” tactics, where plaintiffs suggest extraordinarily high figures to reset jurors’ sense of what is reasonable. Media coverage and aggressive advertising by the plaintiffs’ bar further normalize these numbers in the public consciousness. 

For wealth managers, the takeaway is clear: Investment risk and liability risk are no longer separable conversations. A client’s net worth can simultaneously represent success and vulnerability. Failure to integrate personal risk management into holistic wealth planning is no longer a benign oversight. It is a professional risk.

Managing this exposure requires more than reactive insurance purchasing. It demands proactive risk architecture: contractual risk controls with third parties, coordinated review of underlying and excess policies, ongoing oversight as family activities and assets evolve, and the implementation of non insurance mechanisms designed to prevent a client from being pulled into litigation in the first place.

As nuclear verdicts continue to rise and the definition of “defendant” expands, wealth managers must broaden their understanding of fiduciary care. Protecting assets today means recognizing that the greatest threat may not come from the markets – but from the courtroom.