Helping to Reduce Your Financial Exposure
Contract Litigation Insurance (CLI) is designed specifically to cover against the risk of having to pay adversary's attorneys' fees, if unsuccessful in a contract lawsuit. This risk can arise through a prevailing party provision (also known as a “loser pays” or “fee shifting” provision) in a contract or based on a “loser pays” statute. By insuring against this risk, your client will be able to gain more certainty in the otherwise uncertain process of litigation.
Prevailing party provisions
are in all types of
contracts and courts are
required to enforce them.
Contract lawsuits are common
with 4.5 million annual filings
and > 50% containing a
loser pays provision.
Because business is conducted
through contracts - - contract
litigation is a risk that runs
across all indurstries.
Fill a Coverage Gap and Reduce the Financial Risk.
CLI is the only policy that insures the risk of paying an adversary’s attorneys’ fees. In fact, standard insurance policies specifically exclude coverage for an adversary’s attorney’s fees.
By removing the threat of having to pay an adversary’s attorneys’ fees, the protection CLI offers turns into empowerment, allowing an insured to make better decisions in their lawsuit.
For a plaintiff, this could mean strengthening negotiating power, perhaps even increasing the value of a settlement. For a defendant, the coverage can eliminate the adversary’s ability to leverage the risk of having to pay their attorneys’ fees, which may even afford a reduction of settlement payout.
While CLI premiums are affordable, litigants can save on the cost of coverage by purchasing a policy as early as possible. That’s because typically, as a lawsuit progresses, the degree of uncertainty increases – as does the premium of CLI.
CLI policyholders have distinct advantages over their uninsured opponents:
- Reduced financial exposure
- Increased settlement leverage
- Improved decision making in prosecuting or defending a case
- Better budgeting certainty
- A sealed gap in coverage
Affordably Prices Options.
CLI policies are offered through a tiered pricing structure that’s tied directly to the increased level of risk reflected in key stages of the lawsuit.
The Right Time for Coverage.
Because all business is done through contracts and most contracts contain a loser pays provision, investigating CLI coverage should be a part of every litigation risk assessment. The need for CLI coverage is event driven, meaning coverage is purchased within the first 12 months of litigation. The policy covers the life of the lawsuit. The premium is fully earned, with a one-time payment and no deductible.
Underwritten By A Global Leader.
Contract Litigation Insurance is underwritten by a leading global insurance carrier rated “A+” by A.M . Best.
Source: US Assure & Sonoma Risk Insurance Agency
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