Contingent liability insurance is a valuable tool for individuals and businesses looking to protect themselves from the financial risks associated with legal matters. Whether you are a plaintiff seeking to safeguard your interests in a case, a litigation funder looking to protect your investments, an acquiror wanting to limit exposure in a merger or acquisition transaction, or a law firm seeking to cover costs on contingency matters, contingent liability insurance can provide peace of mind and financial security.
When considering whether your situation is suitable for contingent liability insurance coverage, there are several key factors to keep in mind. The first consideration is the clarity of the legal issues involved in the matter. Insurance underwriters will look closely at the legal questions at the heart of the case to determine the level of risk involved. While a judgment is not necessary to apply for coverage, matters that hinge on legal issues rather than factual disputes are generally more suitable for contingent liability insurance.
Another important factor is the financial structure of the matter. Insurers will want to understand how the case could potentially be resolved in a favorable manner, as well as the potential damages involved. Having a credible damages model and a clear explanation of the financial interests at stake will strengthen your application for coverage. Providing detailed information on the damages assessment, including access to third-party experts and analyses, can help insurers assess the viability of the risk.
Additionally, it is crucial to articulate why insurance is needed in your specific situation. Whether you are seeking to protect an investment, monetize a judgment, or manage risk on a contingency fee arrangement, clearly outlining your motivations for seeking coverage will be key to the underwriting process. Insurers are wary of adverse selection risk and will want to ensure that applicants are not simply submitting speculative or high-risk matters that they would not pursue without insurance.
Overall, contingent liability insurance can be a strategic tool for managing legal risks and protecting financial interests. By carefully considering the legal issues, financial structure, and motivations behind seeking coverage, applicants can increase their chances of securing the protection they need. With the guidance of experienced professionals like Connor Williams and Steve Penaro, individuals and businesses can navigate the process of obtaining contingent liability insurance with confidence and clarity.