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WIP Insurance
Protection for work in progress carried at risk on contingent matters.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIPThis cover
- 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 WIP Insurance?
WIP Insurance is a form of litigation risk transfer that may be arranged around unbilled work in progress. Protection for work in progress carried at risk on contingent matters. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
WIP Insurance
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
- Unbilled work in progress, 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
Firms running contingent or conditional matters that record significant unbilled time.
Clause 2
Insuring clause
What risks can be protected
The value of unbilled work in progress on a covered matter if the matter fails and the fee is lost.
Clause 3
Operation of cover
How it works
The insurer agrees a WIP value to protect, usually below the firm's full rates, and pays if the matter is lost on the defined terms.
That can support the firm's cash flow and borrowing against its book.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Law Firm Litigation 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 Law Firm Litigation Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
Cover on a proportion of recorded WIP, with limits per matter and across the book, and premiums typically contingent on success.
Clause 7
Alternatives
Alternatives
- (a)Portfolio funding secured on the firm's contingent book;
- (b)Partial fee deferral; and
- (c)Accepting the risk.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Law Firm Litigation 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
What is WIP insurance?
Insurance that protects a law firm's unbilled work in progress on a contingent matter, paying an agreed value if the matter is lost and the fee cannot be recovered.
Does WIP insurance cover the firm's full hourly rates?
Usually not. Cover is normally set on an agreed proportion of recorded time, so the firm continues to share some of the risk.
Is WIP Insurance 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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