Global
Litigation Insurance in United States
Without general costs shifting, judgment and capital risk dominate over adverse costs.
US
New York
40.71° N · 74.01° W
- Own-costs burden
- Appeal risk on large verdicts
- Contingent fee structures
Illustrative. The forum decides which exposures exist at all: its costs rules, its approach to security and how its judgments travel.
How can litigation insurance work in United States?
Without general costs shifting, judgment and capital risk dominate over adverse costs. That can shape which exposures dominate — own-costs burden, appeal risk on large verdicts, contingent fee structures — and therefore which structures may be considered. Availability, admitted status and enforceability of any instrument depend on the forum and on policy terms, and are confirmed matter by matter, subject to underwriting.
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Forum file
United States
US
- Costs rule
- Each side bears its own, generally
- Weight of adverse costs
- Lower
- What tends to dominate
- Judgment, appeal and capital risk
Risks to check first
- Own-costs burden
- Appeal risk on large verdicts
- Contingent fee structures
Structure may follow the procedural rules of the forum, not the parties' nationality. General orientation, not advice; rules have exceptions.
Common risk types
Under the American rule each side generally bears its own legal fees, so adverse costs exposure is usually limited.
The dominant risks are own costs, the risk of losing on the merits or on appeal, and — for defendants — large verdicts.
Relevant products
- Judgment preservation insurance for plaintiffs holding large verdicts
- Capital protection for funders
- Contingency fee protection for firms
- Adverse judgment or buyout cover for defendants and deal parties
Key considerations
Some courts and states require disclosure of litigation funding, and rules differ between districts and states.
Fee-shifting can still arise from contract, statute or offers of judgment, so the exposure should be checked matter by matter.
Enforcement
Federal and state judgments are enforceable across the US, but appeals can take years.
Where a judgment is under appeal, a defendant may post a supersedeas bond, which affects the plaintiff's recovery risk.
Frequently asked
Does the loser pay the winner's legal fees in the US?
Generally no. Under the American rule each side pays its own fees, unless a contract, statute or rule provides otherwise.
What litigation insurance is most used in the US?
Judgment preservation, capital protection for funders, contingency fee protection and adverse judgment or contingent risk cover, rather than adverse costs cover.
Is litigation funding legal in the US?
Generally yes, though some states restrict it and some courts require funding to be disclosed. Rules vary by state and district.
Is judgment preservation insurance common in the US?
It developed mainly in the US market for large verdicts under appeal, though capacity and appetite have varied after notable appellate reversals.
Can a defendant insure a US lawsuit?
Adverse judgment or contingent risk cover can cap a defendant's loss above an agreed level; appetite depends on the claim and the forum.
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.
Where to go next
Relevant products
Other jurisdictions