The litigation finance space is evolving at break-neck speed with new, innovative products to meet marketplace demands. Development of a new market segment includes the emergence of litigation risk insurance, aimed at mitigating threats arising from acknowledged claims.
InsuranceJournal.com explains that with historic investment in world-wide litigation finance, litigation insurance products offer a dynamic set of tools to help offset high-stake, high-dollar litigation awards. Even more exciting, mergers, acquisitions and leveraged buyout scenarios are finding litigation risk insurance an attractive solution to material litigation liablities.
There are two emerging categories of litigation risk insurance:
- Adverse Judgment Insurance: Facilitating coverage in unexpected scenarios, this solution provides various coverage options to potential adverse judgment awards. Policyholders usually are defendants offering rider coverage to consider assignees associated risk.
- Judgment Preservation Insurance: The journey of contentious litigation can award significant claim values that stand a chance of being overturned in appeal proceedings. Judgment preservation insurance offers claimants various facilities to protect awarded judgements in the event of lesser recovery.
Litigation risk policy coverage is bound much like traditional insurance coverage. Policyholders pay corresponding premiums to gain agreed upon indemnification. Bespoke policy scenarios are widely becoming a risk mitigation technique out of design. It will be interesting to see how the litigation insurance industry continues to evolve alongside that of litigation finance.