Podcast Summary: Emerging Litigation Podcast

Episode: "Insurance Coverage Litigation's Modern Mayhem"

Host: Tom Hagy
Guest: Jeremy Moseley, Partner at Spencer Fane
Date: September 2, 2025

I. Episode Overview

This episode explores the rapidly evolving world of insurance coverage litigation, focusing on how technological advancements, climate change, and social shifts are creating new legal risks and high-stakes litigation for insurers. Host Tom Hagy and guest Jeremy Moseley discuss the urgent landscape facing insurers, the double-edged sword of technology, the growing threat of massive jury verdicts (“social inflation”), customization in insurance products, and the impact of catastrophic climate-related events.

II. Key Discussion Points and Insights

1. The Urgent State of Insurance Litigation

• Confluence of Risk Factors ([04:32])
  • Jeremy Moseley outlines how the convergence of technological progress (especially AI), rising litigation risk, and massive jury verdicts ("thermonuclear verdicts") makes this an exceptionally risky period for insurers.
  • Litigation trends follow societal shifts; a notable example is the surge in class actions post the Meta privacy verdict ([04:32]).
  • Insurers themselves have become targets in data collection lawsuits, as evidenced by Texas suing Allstate for alleged misuse of driver data ([05:24]).

2. Technology, Automation, and Legal Risk

• Efficiencies Breed New Exposures ([06:34])
  • Technology increases efficiency but can also homogenize claims handling—this uniformity is precisely what plaintiffs look for in class actions.
  • Automation in claim processing, while beneficial, raises the risk that errors or uniform underpayments become the basis of large lawsuits.
  • Example: Automated photo-based damage claims may result in missed, non-visible damages—fueling claims of insufficient payouts ([14:26]).
• AI in Health Insurance ([07:44])
  • AI’s use in processing medical bills is already spawning class actions, such as those against Cigna, for decisions that might not account for individualized circumstances.

3. Class Actions: Targets and Prevention

• Uniformity Is a Plaintiffs' Wedge ([09:12])
  • Plaintiffs seek to show that automated systems "reduce claim payments" and that profits and efficiencies come at the cost of the customer ([09:12]).
• Balancing Efficiency with Individualized Review ([09:51])
  • “The key is always the human decision making… The balance that needs to be created is the balance between consistency … and the autonomy … in making decisions.” — Jeremy Moseley ([09:51])
  • Proper documentation by adjusters (deviating from automated recommendations) is crucial in defending against class action certification ([10:31]).
• Consent and Disclosure ([13:33])
  • Using clear, up-front consent (via apps, checkboxes, recorded phone calls) can help insurers prove the consumer understood and agreed to the claims process.

4. Customization of Insurance Products

• Litigation Risks from Customization ([17:15])
  • The push for consumer choice means more coverage gaps, increasing post-loss claims that “I would’ve bought it if I’d understood.” Custom products mean more adjuster errors or omissions on claim handling ([17:15]).
• Tech Solutions for Disclosure ([19:27])
  • Technology enables documentation of disclosures (what options were offered, what was declined)—critical when policies are challenged ([19:27]).
• Best Practice: Save evidence of all disclosures and consumer selections at the point of sale, even if not required by law ([21:46]).

5. Social Inflation & "Nuclear Verdicts"

• Why Are Huge Verdicts More Common? ([23:16])
  • Social inflation is the normalization of larger numbers in daily discourse (billionaires, trillion-dollar companies), desensitizing juries to huge awards.
  • “$20 million of someone else’s money doesn’t seem like that much.” — Jeremy Moseley ([27:13])
• Counteracting Juror Bias ([27:53])
  • Defense must provide a “reality check” by anchoring to real-world equivalents (e.g., a $20 million verdict equates to 300 years of average local wages), tying damages to what’s actually at stake ([28:33]).
• Proactive Steps Beyond Litigation ([32:01])
  • Tort reform is vital.
  • Enhanced risk management and safety programs among insureds.
  • Cultural outreach to shift the “evil corporation” narrative, though companies must tread carefully due to heightened polarization ([34:29]).

6. Climate Change and Insurance Risk Modeling

• Increasingly Frequent and Relocated Catastrophes ([38:17])
  • Events once considered “100-year” are happening more often and in new places (e.g., tornadoes striking Middle Tennessee) ([39:33]).
  • Densely populated, unprepared regions face amplified losses as disasters shift locations ([41:48]).
• Macro Impacts on Underwriting and Litigation ([42:44])
  • Regulatory constraints make premium adjustments slow and reactive, not proactive.
  • After catastrophic events, litigation and claims strategies migrate geographically (e.g., Texas/Florida trial practices moving to Colorado post-wildfires).

7. Generational Shift in Litigation Risk

• Permanent Shift in Verdicts and Attitudes ([44:48])
  • Post-COVID, a new, higher equilibrium for damages is here to stay—insurers must accept this generational change and plan accordingly.

8. The Next Frontier: Data-Driven Litigation

• Warning to Insurers ([46:03])
  • The next wave: class actions about insurance company data use and privacy: “Class action lawyers will keep working on ways to come after insurance companies next with how insurance companies use all the data they have.” – Jeremy Moseley ([46:03])

III. Notable Quotes & Memorable Moments

• On Technological Risks:
  • “What insurers look at as efficiency, plaintiff lawyers look at as a way to reduce claim payments…That’s always going to be their theme.” — Jeremy Moseley ([09:12])
• On Human Oversight:
  • “Each claim is adjusted on its own merits…that documentation then allows us to demonstrate in the litigation why class action treatment is not appropriate.” — Jeremy Moseley ([11:07])
• On Nuclear Verdicts and Social Change:
  • “When we talk about money now, we talk about billionaires…so, in just the last few years, we’ve really changed the way we talk in the news about money.” — Jeremy Moseley ([24:28])
  • “$20 million of someone else’s money doesn’t seem like that much.” — Jeremy Moseley ([27:13])
• On Reality Checks at Trial:
  • “If you’re talking about non-economic bad-faith damages of $20 million…that’s the equivalent of 300 years of the average annual earnings…Tie it to things that are actually relevant to this case…” — Jeremy Moseley ([28:33])
• On Climate Risk:
  • “We’re seeing a shift in location…tornadoes that are striking farther east, including middle Tennessee. …That’s the kind of change that we’re seeing where storms have moved because of climate change.” — Jeremy Moseley ([39:33])
• On Litigation’s Future:
  • “I think it’s already there in other areas, and I think it’s coming to insurers next. And I really do think it’s going to be data driven.” — Jeremy Moseley ([46:03])
• Host’s Humor:
  • “I wouldn’t get out of bed for less than a billion.” — Tom Hagy ([26:28])
  • “My car yells at me…There’s an argument for leaving your signal on constantly while you’re driving.” — Tom Hagy ([01:21])

IV. Timestamps for Key Segments

| Segment Topic | Timestamp | |---------------------------------------------------------------------- |-------------| | Introduction, framing the insurer’s role in society | 00:00–04:00 | | Current urgency in insurance litigation | 04:01–06:07 | | Technology’s double-edged sword: automation & AI | 06:07–08:42 | | Preventing class actions: checks and human discretion | 08:42–14:07 | | Customization in policies: litigation risks and best practices | 16:27–22:35 | | Social inflation and thermonuclear verdicts | 22:35–31:54 | | Strategies for defense: countering jury expectations | 27:53–31:54 | | Proactive steps: Tort reform & social change | 32:01–34:42 | | Climate change impacts on risk and claims | 37:48–44:41 | | Final warnings and the next wave: data-driven litigation | 44:41–47:04 |

V. Conclusion

Jeremy Moseley cautions that the insurance industry faces a “generational shift” in both the size of verdicts and the nature of litigation risks—from the aftershocks of technological automation and evolving data practices to the compounding unpredictability of climate-driven catastrophes. Insurers must take proactive steps: blend robust documentation, transparency, and human oversight into automated systems; anchor trials to reality for jurors; and get ahead on disclosure and community engagement. The horizon holds a new battleground—class action suits over data use—demanding vigilance and innovation from insurers, defense counsel, and risk professionals alike.

For more information or to reach host Tom Hagy, see the show notes.