Certainty, elevated.

Contingent risk and litigation products are written around an identified non-tax legal exposure. Each policy defines the insured risk and the events that trigger a loss, with covered loss shaped to the exposure. Policies are usually single-premium and claims-made, typically with one aggregate limit and a period of up to seven years. ATE premiums may sometimes be partially deferred and contingent.

Typical risks

Contingent risk insurance ring-fences a specific identified legal exposure; litigation buyout / adverse judgment insurance protects defendants against an unfavourable judgment or award; after-the-event insurance covers adverse costs exposure; judgment preservation insurance protects a successful claimant if a judgment or award is reversed, reduced or annulled; award default insurance covers enforcement and/or collection risk.

Practical benefits

Keep deals on track, resolve risk allocation, release escrows and provisions and protect the deal model. Cover can also unlock financing or monetisation of a claim, judgment or award, allow a claimant to pursue its case without carrying adverse costs, and give a defendant certainty on the cost of an unresolved dispute. These products work inside and outside M&A.

What it does not normally cover

Risks that have already crystallised or are reasonably foreseeable at binding, inaccurate or incomplete disclosure of the underlying facts, changes in law after binding, fraud, uninsurable fines and penalties, costs incurred outside the agreed conduct provisions, and settlements without insurer consent. Cover responds only to the defined trigger events in the policy.