Market Insights
How Much Does Litigation Insurance Cost?
What drives pricing structure, and why no figure can be quoted in the abstract.
Published · Updated
2 min read
On this page2 min read
The short answer
There is no rate card. The premium reflects the probability of the policy paying, the limit, how long the insurer is on risk and whether payment is deferred or contingent. Contingent premiums payable only on success are usually higher than premiums paid up front.
In brief
- Pricing is set case by case.
- Deferred and contingent premiums cost more but carry less cash risk.
- Staging premiums spreads cost across the case.
- Better evidence and earlier approaches usually improve terms.
Background
Litigation insurance pricing reflects the insurer's view of the risk and its cost of capital.
How it works in practice
Premiums may be fixed, staged, deferred, contingent or expressed as a share of recoveries.
Worked example
A £2m limit may be priced as a contingent premium payable only on success, stepping up if the case reaches trial.
Figures are invented to show the mechanics. They describe no real client, matter or outcome.
What underwriters look for
Merits, budget, recoverability and the claimant's alignment with the case.
Jurisdiction notes
In England and Wales premiums are generally not recoverable from the opponent, so the premium is a cost to the insured.
What drives pricing
The probability the policy pays, the size of the limit, the time the insurer is on risk and the cost of capital.
Merits, budget, recoverability and stage all feed into those factors.
Premium structures
Premiums may be paid up front, deferred until the case ends, or deferred and contingent — payable only if the case succeeds.
They may be fixed, staged by procedural milestone, or expressed partly as a share of recoveries. Contingent premiums are usually larger, reflecting the insurer's deferred and uncertain payment.
What changes the price
Improved merits evidence, a proportionate budget, a solvent opponent, an experienced legal team, risk-sharing by lawyers or funders, and an earlier approach.
Conversely, late approaches before trial, thin evidence and uncertain recoverability raise the price or reduce appetite.
Questions to prepare
- What limit do we need, and at which stages?
- Can we pay a premium now, or does it need to be contingent?
- Who else is taking risk — the law firm, a funder?
- What would the case be worth to us with and without cover?
Related questions
How is cover underwritten?
What does ATE cover? See the related guides below.
Premium structures compared
| Structure | When you pay | If you lose | Relative cost |
|---|---|---|---|
| Up front | At inception | Premium already paid | Lowest |
| Deferred | At the end of the case | Premium still payable | Higher |
| Deferred and contingent | Only if the case succeeds | Nothing payable | Highest |
| Staged | As the case reaches each milestone | Only the stages reached | Follows the risk |
Relative cost is general; actual terms depend on the risk.
Frequently asked
Is there a standard rate for litigation insurance?
No. Each premium is set on the specific risk: the limit, the prospects, the stage and the payment structure.
Can the premium be paid only if the case succeeds?
Often, yes. Deferred and contingent premiums are payable only on success, usually from the recovery, and are typically higher than premiums paid up front.
How much does ATE insurance cost?
It depends on the limit, the prospects, the stage and whether the premium is deferred or contingent. There is no rate card; see our guide to ATE premiums.
Why is a contingent premium higher?
Because the insurer is paid only if the case succeeds and only at the end, so it prices in the risk of receiving nothing and the wait.
Can the premium be paid in stages?
Often, yes. Staged premiums step up at procedural milestones, so the cost follows the risk actually faced at each stage.
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.