'Self-insured' Johnson & Johnson hit with $966 million verdict
- SCCLR Newsletter
- Oct 7
- 4 min read
By: Stephen Owens & Chris Davis
Baby powder sounds so clean, fresh and almost wholesome – but the product is being blamed for deaths across the country – despite the manufacturer saying the claims are total nonsense. And some of those claims are winning – and winning big.
Johnson & Johnson has just been ordered to pay $966 million to the family of a California woman who died of mesothelioma, after a Los Angeles jury concluded the company’s talc-based baby powder contributed to her illness. The decision marks one of the largest awards to date in the wave of product liability cases surrounding the company’s talc products.
The jury’s decision, handed down late Monday, came in the case of Mae Moore, an 88-year-old California resident who died in 2021. Her family alleged that decades of using J&J’s talc powder exposed her to asbestos fibers, ultimately causing her rare and fatal cancer. Jurors awarded $16 million in compensatory damages and $950 million in punitive damages, according to court documents.
While the size of the award drew national attention, legal experts noted it could be reduced on appeal. The U.S. Supreme Court has generally held that punitive damages should not exceed nine times the amount of compensatory damages.
J&J immediately vowed to challenge the verdict. Erik Haas, the company’s worldwide vice president of litigation, described the outcome as “egregious and unconstitutional,” adding that the plaintiffs relied on “junk science that never should have been presented to the jury.” The company has consistently denied that its talc products contain asbestos or cause cancer, emphasizing that its baby powder met safety standards for decades.
Moore’s legal team, led by Trey Branham, welcomed the verdict. “We are hopeful that Johnson & Johnson will finally accept responsibility for these senseless deaths,” he said following the jury’s decision.
The company stopped selling talc-based baby powder in the U.S. in 2020, transitioning to a cornstarch-based formulation as litigation mounted. J&J is now defending against more than 67,000 lawsuits alleging its talc products caused cancer—most claiming ovarian cancer, with a smaller subset tied to mesothelioma.
Broader Legal and Coverage Implications
J&J’s talc-related liabilities are also being fought in insurance coverage litigation in New Jersey. The case, Atlanta International Insurance Co., et al. v. Johnson & Johnson, et al., includes an array of legacy insurers—among them Travelers, Chubb, Allstate, Everest Re, TIG, North River, and Wausau—as well as J&J’s own captive, Middlesex Assurance. The company has said it stopped purchasing new product-liability coverage in 2005 and now relies heavily on self-insurance.
“As far as captives go this a hit like this could totally wreck your captive,” David Snell, practice Leader at Arcisure South told Insurance Business. And he thinks a hit this big might make the pharmaceutical and medtech giant think again about self-insuring.
“This might put them in a situation once they come out of this to not self-insure some of the risk moving forward,” he told IB. “ It might put them in a situation where they go out and find, you know, something in the marketplace for some of that coverage.”
That having been said, under California Insurance Code §533, punitive damages are generally uninsurable, meaning the $950 million portion of the award would not be indemnified. Any insurance disputes are therefore likely to focus on the $16 million compensatory component, not the punitive element.
J&J has sought multiple times to resolve its talc liabilities through bankruptcy, a strategy rejected by federal courts on three occasions. The company has settled some mesothelioma cases individually but not reached a nationwide agreement, leaving many claims to proceed in state courts.
In recent months, J&J has faced both wins and losses in these trials. While Monday’s verdict ranks among the largest, the company prevailed in a South Carolina mesothelioma case just last week.
Fallout for Insurers and the Casualty Market
Insurance professionals and reinsurers are already treating the verdict as another data point in the “social inflation” narrative—the trend of increasingly large jury awards influencing casualty loss projections.
For the umbrella and excess casualty market, the case underscores why underwriters remain cautious about severity risk. Brokers and wholesalers expect it to support rate firmness and tighter capacity, even as other property and specialty lines soften.
Underwriters are also likely to revisit punitive damages language, including “most favorable jurisdiction” clauses and punitive-wrap endorsements, particularly in jurisdictions like California where punitive damages cannot be insured.
Casualty reinsurers, meanwhile, are expected to factor the $966 million judgment into treaty pricing and attachment modeling. Large outlier verdicts—even those likely to be reduced—tend to influence assumptions about clash and catastrophe layers across portfolios.
Manufacturers with bodily injury exposure could face tougher underwriting scrutiny in upcoming renewals, with carriers tightening questionnaires and raising preferred retentions for industries seen as “mass tort prone.”
What It Means for Insurance Clients
Even though punitive damages are uninsurable in California, clients will still see the $966 million headline and may question whether their coverage is sufficient. Brokers are preparing talking points for renewals that address:
Severity and venue volatility: Reviewing limits and attachment points in high-exposure jurisdictions.
Punitive exposure: Clarifying how policies respond to punitive awards in different states.
Layering strategies: Exploring excess layering, higher retentions, and optional limit buy-ups to manage rising verdict risk.
The Los Angeles verdict—Mae K. Moore v. Johnson & Johnson, Case No. 21STCV05513—will likely become a reference point in casualty underwriting discussions throughout 2025, a reminder that even as courts debate science and liability, the financial implications of jury sentiment remain a dominant force in insurance pricing and reserving.
