In our previous article, we looked at the rapid growth of After The Event (“ATE”) insurance and how it has evolved to a wide range of product offerings.
When assessing ATE insurance products, there are many considerations. A good “all perils” policy should include:
- Cover Disbursements, Adverse costs, Arbitration costs, and Interim cost orders
- Give Delegated Authority to the lawyer, giving you surety when speaking to clients.
- Cover the premium if the plaintiff loses the case
- Insure the client for unsuccessful summary judgment motions
- NO set-off clause (which could eliminate your client’s settlement award)
- If the plaintiff fails to beat an offer, the policy covers the risks of adverse costs and own disbursements without touching the damages awarded to the client, and the premium is waived.
Beyond these features, you also need to know:
- How much information about a case you must disclose to the provider. All policies require lawyers to attest there is at least a 51% chance of winning; some require more details.
- Does the policy require routine reporting? Such policies give you authority, from your client, to report to the insurer certain information (such as risk events occurring).
- What could void the coverage? The plaintiff rejecting an offer you recommend could negate a policy. Unfavourable medical or surveillance reports after the policy’s date of issue might also affect this.
For individual cases, these factors will affect the premium:
- The amount of coverage. Providers tend to charge higher premiums for higher amounts.
- The age of the case. Providers usually charge higher premiums for older cases, some based on the current phase of litigation, and others simply on the number of years.
You might want to tailor an insurance package for your practice, in which case you need to consider:
- Will you insure all, or some, clients? While ATE insurance providers prefer to cover all of a firm’s cases (often at lower premiums), lawyers usually prefer to “cherry-pick” cases. Some lawyers, however, prefer to have all cases covered.
- If the client changes lawyers, is the policy portable (i.e., transferrable by the client)? Since the premium typically pays on settlement, some lawyers are indifferent about this, while others want the insurance policy in their firm’s control.
Nudorra Capital is promoting the use of ATE Insurance products through a strategic relationship we have with a licensed Insurance Broker. The overwhelming advantages of costs, security, and protection, for both lawyer and plaintiff, speak for themselves.
The most important attribute is that insurance companies are licensed and regulated, their capital is protected, and they have decades of global experience. The insurance product gives you Delegated Authority and courts are finding After-The-Event (“ATE”) insurance is a strong weapon against Security for Costs.
As a service to our clients, we have included a list of “Frequently Asked Questions (FAQ’s)” in hopes of better explaining ATE Insurance, their products and benefits.
ATE Insurance – FAQ’s (Frequently Asked Questions)
The following questions apply to the usual conditions that you would find in an “After the Event” policy. However, cases can be subject to individual conditions if insurers deem these appropriate.
Insurance – General