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⚖️ '''Excess verdict''' is a court judgment that exceeds the [[Definition:Policy limit | policy limits]] of the defendant's [[Definition:Liability insurance | liability insurance]] coverage. When a jury or judge awards [[Definition:Damages | damages]] that surpass what the insurer is contractually obligated to pay, the gap between the policy limit and the verdict amount falls on the insured — unless the [[Definition:Insurance carrier | carrier]] is found to have acted in [[Definition:Bad faith (insurance) | bad faith]] by failing to settle the [[Definition:Claim | claim]] within policy limits when it had the opportunity to do so. This scenario sits at the volatile intersection of [[Definition:Claims management | claims handling]], [[Definition:Coverage litigation | coverage litigation]], and policyholder rights.

🔄 The path to an excess verdict typically unfolds when a [[Definition:Claimant | claimant]] demands the full [[Definition:Policy limit | policy limit]] to resolve a case, but the insurer declines — perhaps believing the demand is inflated or the liability is defensible. If the case proceeds to trial and produces a verdict above the policy limit, the insured is personally exposed to the excess amount. In many jurisdictions, the insured can then pursue a [[Definition:Bad faith (insurance) | bad faith]] action against the carrier, arguing that the insurer's refusal to settle was unreasonable. Courts may impose consequential or even punitive [[Definition:Damages | damages]] on the insurer in such cases, making excess verdicts one of the most consequential risks in [[Definition:Liability insurance | liability]] [[Definition:Claims management | claims management]].

💰 Rising [[Definition:Social inflation | social inflation]] and escalating jury awards — sometimes called "[[Definition:Nuclear verdict | nuclear verdicts]]" — have made excess verdicts an increasingly urgent concern for [[Definition:Underwriting | underwriters]], [[Definition:Defense counsel | defense counsel]], and [[Definition:Risk manager | risk managers]] alike. Carriers have responded by tightening [[Definition:Claims management | claims handling]] protocols, investing in early [[Definition:Claim | claim]] evaluation technology, and reexamining settlement authority frameworks. For [[Definition:Reinsurer | reinsurers]] and [[Definition:Excess insurer | excess insurers]], the trend toward larger verdicts directly impacts [[Definition:Loss reserve | reserving]] assumptions and the pricing of higher [[Definition:Attachment point | attachment point]] layers, reshaping how the entire liability tower is underwritten.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Bad faith (insurance)]]
* [[Definition:Nuclear verdict]]
* [[Definition:Social inflation]]
* [[Definition:Policy limit]]
* [[Definition:Claims management]]
* [[Definition:Liability insurance]]
{{Div col end}}

Definition:Excess verdict - Revision history

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