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Portfolio Capital Protection
Protection assessed across a cross-collateralised portfolio rather than a single matter.
- 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 Portfolio Capital Protection?
Portfolio Capital Protection is a form of litigation risk transfer that may be arranged around capital across a book of cases. Protection assessed across a cross-collateralised portfolio rather than a single matter. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
Portfolio 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
- Capital across a book of cases, 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
Funders and investors holding several disputes, where diversification across cases makes a book easier to underwrite than any single matter.
Clause 2
Insuring clause
What risks can be protected
Aggregate capital deployed across the portfolio, after gains and losses across the cases are netted.
Clause 3
Operation of cover
How it works
Cases are pooled and cross-collateralised.
The policy responds only if total recoveries across the book fall short of the protected amount, so a few losses can be absorbed by wins elsewhere before the insurer pays.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Litigation Portfolio 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 Litigation Portfolio Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
An aggregate attachment and limit, eligibility criteria for adding new cases, and a waterfall setting out who is paid in what order.
Such structures can support rated or institutional financing.
Clause 7
Alternatives
Alternatives
- (a)Single-case protection on the largest exposures;
- (b)Syndication; and
- (c)Unprotected diversification.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Litigation Portfolio 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
How does portfolio capital protection differ from insuring single cases?
Losses on some cases are offset by gains on others before the policy pays, so the insurer covers the risk of the whole book underperforming rather than any one case failing.
Can new cases be added to an insured portfolio?
Often, within agreed eligibility criteria set when the policy is placed, such as case type, size and forum.
Is Portfolio 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.
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