Who we help
Law Firms
The firm's balance sheet is carrying the case.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- 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.
How can litigation insurance apply to law firms?
WIP, conditional and contingent fee exposure across a growing book of matters. Litigation insurance may be used here to convert an open-ended downside into a more defined one, depending on policy terms and subject to underwriting. Structures, where available, are arranged case by case.
On this page2 min read
Key points
- Terms, where available, are set case by case through underwriting.
- WIP, conditional and contingent fee exposure across a growing book of matters.
- Exposure can be measured across costs, capital and judgment risk together.
- Protection, where available, is arranged around the specific decision being taken, not sold as a package.
- Jurisdiction can affect how much of the exposure is costs-driven.
The exposure
A firm working on conditional, damages-based or contingent terms carries its own time and often disbursements at risk, and its clients may need costs protection before they will proceed.
As a contingent book grows, so does the firm's concentration of risk.
What can be protected
- WIP and disbursements on contingent matters
- Client-side adverse costs
- Across a book, aggregate fee risk through portfolio cover
Professional liability risk is a separate line of insurance and not covered here.
How engagements usually run
Cover is typically arranged either matter by matter, with each case presented to the market, or through a facility where agreed criteria let the firm place cover on qualifying cases more quickly.
Illustrative scenario
A disputes boutique takes a £12m shareholder claim on a partial conditional fee, deferring £1.2m of its fees. It insures that deferred WIP and the client's adverse costs. If the case fails, the firm recovers an agreed proportion of its time and the client is protected against the opponent's costs.
Figures are invented to show the mechanics. They describe no real client, matter or outcome.
Questions worth asking first
- How much of our WIP is contingent, and on how many matters?
- What is our historic success rate by practice area?
- Would a facility or a matter-by-matter approach suit our book better?
Frequently asked
Can a law firm insure its contingent fee risk?
Yes. WIP and fee protection can cover part of the time and disbursements a firm carries on contingent matters, case by case or across a book.
Is this the same as professional indemnity insurance?
No. Professional indemnity covers claims against the firm for negligence; fee-risk cover protects fees at risk on the firm's own cases.
Can a law firm arrange ATE for its clients?
Yes. Firms often arrange ATE for clients alongside conditional or damages-based fees, sometimes through a facility with pre-agreed criteria.
How much WIP can a firm insure?
Usually an agreed proportion of recorded time, so the firm continues to share some risk. Limits apply per matter and across the book.
Does fee insurance help a firm borrow?
It can: protecting contingent receivables gives lenders a defined downside when lending against the firm's book.
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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