Dispute type
Commercial Litigation Insurance
Risk transfer that may be arranged around the cost and capital profile of commercial litigation.
- A judgment or award wonConsidered
- A judgment against you
- Funder capital deployedConsidered
- Law firm fees and WIP
- Security for costsConsidered
- The opponent's costsConsidered
- DisbursementsConsidered
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
Can commercial litigation be insured?
Yes, the financial risks of a commercial claim can often be insured. The usual starting point is ATE cover for the other side's costs and your own disbursements, staged through the case, with capital protection where a funder is involved and judgment preservation once a large judgment is won. Every risk is underwritten individually.
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Key points
- Spend concentrates around disclosure, experts and trial, so cover is often staged.
- In loser-pays forums adverse costs grow with the case.
- Recoverability against the defendant matters as much as the merits.
The risk profile
Commercial litigation often runs for two to four years to trial, with spend concentrated around disclosure, expert evidence and trial.
In loser-pays forums the adverse costs exposure grows with the case, and settlement windows tend to open after key procedural milestones.
Which structures apply
- ATE for adverse costs and disbursements, often staged
- Security for costs cover
- Capital protection where a funder is involved
- Judgment preservation after a first-instance win
Illustrative scenario
A £25m supply contract claim with £2.8m of own costs and £2.5m of expected adverse costs to trial. The claimant funds its own lawyers and insures adverse costs in stages, paying a higher premium only if the case reaches trial and succeeds.
Figures are invented to show the mechanics. They describe no real client, matter or outcome.
Underwriting considerations
The documentary record, witness evidence, the realistic quantum after expert review, and whether the defendant can pay.
Frequently asked
When is the best time to insure a commercial claim?
Early, before significant costs are incurred, when cover can be staged through the case. Later cover is possible but usually costs more.
Does the defendant's ability to pay affect insurance?
Yes. A strong claim against a defendant who cannot pay is a weak insurance risk.
What does ATE insurance cover in commercial litigation?
Mainly the other side's costs if you lose, and often your own disbursements, up to the policy limit.
Can commercial litigation be funded as well as insured?
Yes. Funding pays your own costs; ATE covers adverse costs. The two are often combined.
Can I insure a judgment I have won?
Yes, judgment preservation insurance can protect part of its value against reversal on appeal.
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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