Insurance solution
Litigation Funder Capital Protection
Capital protection written for funders deploying non-recourse commitments into cases.
- A judgment or award won
- A judgment against you
- Funder capital deployedThis cover
- Law firm fees and WIP
- Security for costs
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is Litigation Funder Capital Protection?
Litigation Funder Capital Protection is a form of litigation risk transfer that may be arranged around a funder's deployed commitment. Capital protection written for funders deploying non-recourse commitments into cases. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
Litigation Funder Capital Protection
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- A funder's deployed commitment, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Specialist litigation funders, multi-strategy funds and family offices deploying non-recourse capital into disputes.
Clause 2
Insuring clause
What risks can be protected
Some or all of the funder's committed and deployed capital in a case or portfolio, if the matters do not return it.
Clause 3
Operation of cover
How it works
Protection is aligned with the funding agreement.
The insurer assesses the cases, the budget and the funder's diligence, then commits to cover an agreed layer of loss. Some funders use protection to lower their cost of capital or to support leverage from lenders.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Capital Protection Insurance: merits, quantum, a proportionate budget, recoverability and the legal team.
The points that weigh most for this cover are set out under "What risks can be protected" and "How it works" above.
Clause 5
Proposal documents
Information required
The standard presentation pack described on the Capital Protection Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
- (a)Principal protection with a contingent premium payable from case proceeds;
- (b)Staged commitments tracking drawdowns; and
- (c)Portfolio wrapping across a vintage of cases.
Clause 7
Alternatives
Alternatives
- (a)Co-funding or syndication;
- (b)Secondary sales; and
- (c)Portfolio diversification without insurance.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Capital Protection Insurance page; the jurisdiction guides linked below set out the position forum by forum.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
Why would a litigation funder insure its capital?
To limit losses on concentrated positions, to reduce its cost of capital, or to support borrowing or investor requirements. Protection can let a funder take on cases it would otherwise decline.
Who pays the premium for funder capital protection?
Usually the funder, often as a contingent premium paid from case proceeds, so the cost is borne only when there is a recovery to pay it from.
Is Litigation Funder Capital Protection available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.