Does Insurance Cover Mass Torts in Texas?

Insurance covers a large number of mass torts in Texas. Many businesses and organizations in Texas purchase liability insurance policies that help protect and indemnify them whenever there are third-party claims for physical, mental, or property damages suffered due to their negligence or wrongful act. Examples of insurance policies include general/business liability insurance, professional liability insurance, or workers’ compensation insurance.

Claiming this liability insurance is very important to most mass tort defendants as this is the source of the resources needed to cushion the effect of having a large claim filed by multiple injured parties. The resources that insurance companies wield are also essential for claimants to bounce back from the harm or legal injury a business or organization's negligence might have caused them.

Claimants may submit claims to the defendant’s insurance agency or file a civil suit for a mass torts claim through their mass tort attorney. Since mass torts involve multiple claimants, an attorney or claimant can submit claims, but with the permission of all the claimants involved. Some organizations at higher risk of mass tort claims include aviation organizations, medical and pharmaceutical organizations, chemical processing plants, some government organizations, and mining and steel industries.

What Damages Are Available to Victims of Torts?

Individuals who are victims of wrongful acts by any entity can file a claim for compensatory and exemplary (punitive) damages. Compensatory damages are the economic and non-economic damages paid for the financial losses, hardships, and emotional distress suffered by the victims, whereas exemplary (punitive) damages are awarded as additional monetary punishment or penalty. There are also nominal damages, a small amount usually awarded to victims of torts who suffered no harm and therefore are not entitled to compensatory damages.

Specific damages that can be awarded to victims of torts include lost wages, future and past medical expenses, emotional distress, disfigurement, reduced working capacity, post-traumatic stress, disorder permanent disabilities, and any other form of pain and suffering. A mass tort litigation attorney or personal injury lawyer that handles tort claims will advise on how best to pursue the maximum amount for whatever damages were incurred.

Torts in Texas are civil wrongs litigated under the Civil Practice and Remedies Code. The types of tort under this law can be categorized into intentional, negligence, and strict liability torts, but most mass tort cases usually fall under negligence and strict liability torts. Depending on the tort and case type, the state sets a limit for the amount of economic, non-economic, and punitive damages claimants can receive.

For instance, a state or local government liability suit on a single event can have damages up to $250,000 per claimant but not more than $500,000 among every claimant. Additionally, the Texas Medical Malpractice and Tort Reform Act set the maximum non-economic damages at $250,000 for a medical malpractice case against a doctor, multiple doctors, or healthcare providers and $500,000 per claimant in a medical malpractice case against multiple healthcare facilities. Meanwhile, $500,000 is the maximum amount of damages awarded for all claims in a medical malpractice case resulting in wrongful death.

Furthermore, punitive damages for intentional torts can be two times the economic damages plus a sum equivalent to the non-economic damages. So, if the economic damage is $500,000 and the non-economic damage is $200,000, the punitive damage can be $1 million (double economic damage), $200,000 (non-economic damage), plus the sum equivalent of $200,000, totaling $1.4 million. However, punitive damages are not commonly awarded. A skilled mass tort lawyer will know these laws and be able to capitalize on these terms while advising the clients.

What Are Common Defenses Insurance Companies Raise in Mass Tort Litigation?

Insurance companies in mass tort litigation will carry out aggressive investigation and damage control strategies in order to deny claims or significantly reduce the damage amount. A common defense in a product liability case is the "assumption of risk." This is when the insurance company defends the organization by stating that the product came with adequate warning, directions, and clauses that established the risk or side effects of using the product. Hence, the organization cannot be held liable for the accident or damages suffered.

In a negligence case, insurance companies can also deny claims by establishing causation in another direction. Hence, arguing that the cause of the accident is not due to the organization's negligent actions. The Insurance Company may support this with evidence shifting the blame to the claimant or another third-party. A favorable ruling will depend on the strength of the claimant's case and the strength of the insurance company’s argument. Other defenses insurance companies rely on include:

• Proportionate responsibility: According to Texas Law, if parties in a tort case share fault for the accident, damages will be awarded according to the percentage of responsibility. This also applies to the contribution defendant - a third-party entity that is deemed partly responsible for the damages. Proportionate responsibility is similar to contributory negligence and shared fault.
• Exaggerated claims: The insurance company can argue that the number of claims and amount of damages provided by the claimants is inflated and seek to significantly reduce the compensation or aim to just provide a nominal settlement. The insurance company can achieve this by discrediting the victims or breaking down incurred damages on a claim by claim basis.

Why Are Insurance Companies Hard Bargainers in Mass Tort Settlements?

Insurance companies are hard bargainers in mass tort settlements because it helps them establish their reputation and discourages false claims or large payouts to the defendants. As a business, it is also the goal of these companies to make the least amount of losses. Hence, insurance companies will first deny claims or give lowball offers to claimants with aggressive negotiation.

Since insurance companies are usually the critical players in settlement of mass tort litigation cases, they will investigate every claim in a mass tort settlement with the solid intention of taking the case to trial. This prospect often discourages claimants and makes them settle for the settlement offer that is usually grossly underpriced. Another tactic used by insurance companies is to pay some of the “likely losers” who have weak but legitimate claims and litigate the likely winners in a mass tort settlement. The company will file this suit in a defendant-friendly state court and aggressively attack the claims with a skilled team of lawyers at its disposal.

How Are Mass Tort Settlements Negotiated?

Mass tort settlements are usually negotiated with the defendant or the insurance company on behalf of the defendant. Since mass torts are settled on a case-by-case basis, the legal representative for the injured parties and the defendant will negotiate damages on each claim by each affected person. So the process is lengthy and complex.

The defendant usually agrees to pay a certain compensatory amount to each claimant in an out-of-court settlement. However, cases often go to trial when either side does not agree on the settlement amount or if the defendant denies liability for the damages. When in court, the judge or the jury decides if a defendant should compensate each injured person. If the judge or jury rules in favor of the claimant, there will be damages awarded, which is usually through the defendant’s insurance company. Mass tort claims are usually paid through individual agreements decided by the claimant and defendant out of court.

Unlike in class action cases, claimants in mass tort cases do not evenly split any compensation that has been obtained through the claim. Each claimant is settled individually and based on the number of injuries incurred by the damages caused by the defendant. This allows claimants to tailor their settlements according to their own unique needs. This settlement plan brings about a sense of fairness and flexibility, thus making it a great choice for both defendants and claimants.

Before the negotiation, the mass tort lawyer calculates each affected person's damages while gathering records and evidence supporting each claim. Since mass torts are settled on a case-by-case basis, the legal representative for the claimants and the insurance company will negotiate damages on each claim. So the process is lengthy and complex.

Do Mass Tort Lawyers Get Insurance Cover?

Mass tort lawyers or law firms often have insurance coverage. This insurance is to protect the lawyers or law firms against malpractice charges. A lawyer's or law firm's insurance cover is not so much of a consideration when sourcing for a mass tort attorney representative in a mass tort case, as in some cases, this insurance cover is simply there to cushion the effect of false malpractice suits. However, it is imperative to conduct research on the integrity and quality of service a lawyer or law firm offers before engaging their services for a mass tort suit.