The liability shift nobody in the boardroom is taking seriously enough — yet.
In the 1990s, something changed in how America thought about corporate liability.
It wasn't the cigarettes. Everyone already knew about the cigarettes. The shift was more uncomfortable than that: it moved from what the product does to what the company knew, when they knew it, and what they built the product to do anyway.
That move — from harm to intent, from events to systems — is where liability stops being manageable and starts being existential.
Big Tobacco didn't just lose lawsuits. They lost decades of future earnings, restructured entire business models, and funded settlements so large that states are still collecting checks today. And here's the detail worth sitting with: their insurance didn't save them. The liability was too structural, too systemic, too designed-in for any policy to fully absorb.
Now look left. Look right. Look at whatever browser tab you had open before you read this.
Meta is in court. YouTube is in court. State attorneys general across the country are lining up behind a simple, familiar argument: it's not just about what's on the platform. It's about what the algorithm is designed to push — and why.
Engagement. Time-on-app. Behavioral loops engineered to keep users — including minors — scrolling past the point of wellbeing. These aren't side effects. According to an increasingly loud body of litigation, they're features.
That framing should sound familiar. It's the same argument that unraveled tobacco. The question was never whether cigarettes were harmful. The question was whether the companies knew, concealed, and optimized anyway.
Once the answer to all three was yes, the liability calculus changed permanently.
A product fails. A vehicle crashes. A building floods. There's a moment, a cause, a claim. What's emerging in tech liability is systems-based. The harm isn't a single incident; it's a pattern of behavior produced by design choices made at scale, affecting millions of people simultaneously, over years. That's not a general liability problem. That's not an E&O problem. That's something closer to what tobacco faced: a structural reckoning with what the business model was built to do.
And the exposure doesn't wait for a verdict. Reputational damage, regulatory pressure, advertiser pullback, and investor flight all arrive well before any court issues a ruling.
Here's where it gets interesting — and personal.
The liability story around social media algorithms is still being written. But the direction of travel is clear: toward accountability, toward disclosure, toward the uncomfortable territory where what did you know and when did you know it gets asked of more than just the platforms themselves.
We've seen this movie. It's long. The credits include a lot of lawyers.
At Rexford, we don't just track what's happening in insurance markets. We track what's happening in liability itself — because today's uninsurable risk is tomorrow's required coverage, and the gap between them is where companies get hurt.
The tobacco playbook didn't announce itself. It arrived through depositions, internal memos, and courtrooms. The tech liability story is further along than most organizations realize — and the smart move isn't to wait for a settlement that sets precedent.
The smart move is to start asking the right questions now, while there's still room to act.
— Rexford Insurance Solutions
Rexford advises businesses and executives on risk exposure that goes beyond standard coverage.
If your organization has questions about emerging liability, we're here to think it through with you.