USA Law and Practice Contributed by: Christina Culver, Rhonda Thompson and L. Michael Brooks, Thompson, Coe, Cousins & Irons, LLP
contain “sudden and accidental” pollution-exclusion language. There are ongoing issues whether clean- up costs constitute “damages” and policy trigger theories (exposure, manifestation, continuous trigger) affect coverage allocation, fuelling complex multi-pol- icy litigation.
required disclosure of third-party litigation funding (TPLF). Texas has also recently passed legislation to tighten up timelines for appraisal to allow property claims to potentially be resolved more quickly. 5.3 Defence Costs and Litigation Complexity From 2009 through to 2024, Texas recorded 230 jury verdicts exceeding USD10 million, often referred to as nuclear verdicts. This is the highest total of any state for this same period. These verdicts resulted in more than USD48 billion in awards. In 2024, Texas ranked fourth nationally in total nuclear verdict awards (see Litigation Abuses in Texas: Costs, Causes and Policy Implications (ICT 2026)). The increase in nuclear ver- dicts has emboldened plaintiffs to push cases to trial versus settlement, leading to increased defence costs for both trials and probable appeals. 5.4 Cost Risk Management and Funding Solutions In 2026, the Texas Supreme Court held that a party that settles injury claims can still go after a non-set- tling party for its “fair share” if the contract includes a comparative indemnity clause tying payment to that non-settling party’s percentage of fault ( S & G Engineers & Constructors , Ltd . v Scallon Controls , Inc . (Texas, 13 March 2026)). This ruling potentially changes the risk transfer landscape, particularly in the context of construction defect litigation. Litigation defence and settlement costs are now more prone to shifting as between a general contractor and a sub- contractor where there are indemnity provisions con- tained within the contract documents. Subcontractors and their insurers should be prepared to review policy forms and contracts to ensure the insurers are not unknowingly assuming general contractor risk. Carri- ers for general contractors can now use this case law to push tenders of defence and indemnity down and shift those risks to the subcontractor layers. Third-party litigation funding has also become more prevalent with some funding originating outside Texas. TPLF often leads to more aggressive legal tactics and rising fees, which supports protracted litigation with the injured party eventually receiving less in recovery after longer, more costly litigation. Continued efforts to put regulations or court rules into place governing the
5. Claims Against Insureds 5.1 Key Exposure Areas for Insureds
In 2025, carriers reported underwriting losses of USD1.65 billion for general liability, USD960 million in commercial auto losses and USD190 million for prod- ucts liability. Commercial trucking and personal auto claims continue to rise in Texas. According to Insur- ance Counsel of Texas’s 2026 Market Report, citing The Civil Justice Environment for Motor Vehicle Litiga- tion in Texas (22 April 2026), the average severity of private passenger auto bodily injury claims has risen 133% in the last ten years, medical inflation increased approximately 28% during the same period and the share of Texas auto injury lawsuits increased from 74% in 2019 to approximately 82% in 2025. What remains unknown is how these figures may be impact- ed by driverless vehicles. Current research supports driverless cars, and fully autonomous vehicles show lower overall crash rates per mile than vehicles with human drivers. 5.2 Shifting Risk Landscape Artificial intelligence is already making notable chang- es to the risk landscape with increased litigation being filed by pro se plaintiffs, who are relying heavily upon AI to draft pleadings, and the increasing use of novel, untested legal arguments. Because Texas, like other jurisdictions, has relatively low pleading standards and because the courts historically give pro se plain- tiffs deference, even questionable cases filed by pro se plaintiffs are more likely now than before to survive initial dispositive motion practice. As a result, even when cases have questionable or even no more merit, the use of AI increases the resolution value to insureds and insurers. Priority regulatory change in Texas includes increased medical billing transparency, modernising stand- ards for admissible non-economic damages and the
301 I NSURANCE L I T IGATI O N 2026
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