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home > About CLI
About Contract Litigation Insurance (CLI)
Reduce the risk of paying adversary’s attorneys' fees

For those who have ever been involved in a lawsuit, a level of fear and uncertainty always exists regarding the outcome of the litigation, whether on the plaintiff or defendant side of the suit. No matter how strong a case one may have, it is not always clear who the judge or jury will be that determines the “winner”. In contract disputes, with a loser pays provision the losing party will be ordered to repay the prevailing (or winning) party’s attorney fees.

But what if a plaintiff or defendant could purchase insurance that would cover the cost of their adversary’s attorney fees should they lose the suit. No longer would a litigant be pressed to settle the suit because of a lingering threat of losing and the requirement to repay costly attorney fees of the prevailing party. Such litigation coverage would give a party the certainty often needed to proceed with a suit without the fear of financial consequences And at the same time leverage their settlement negotiations.

Introducing Contract Litigation Insurance

CLI insures litigants from the risk of having to pay their adversary’s attorneys’ fees pursuant to a prevailing party provision in a contract or state statute if unsuccessful. Currently underwritten by Zurich, the coverage is entirely new to the U.S. marketplace and the only one of its kind currently available. All businesses or individuals in any industry who are involved in a breach of contract dispute where a prevailing party provision exists in the contract or state statute are eligible.

Many businesses and individuals enter into a contractual agreement for services (“x” for exchange for “y”). Within these contracts, a “prevailing party provision” typically exists. The provision states “should a suit arise out of this contract, the losing party of the suit is required to pay the attorney fees of the winning (or prevailing) party.” Many states have even made the provision law whether or not noted in the contract.

Plaintiffs or defendants may purchase CLI to cover the cost of their adversary’s attorney fees should a summary judgment or trial determine their adversary to be the prevailing party in the lawsuit. Not only does CLI reduce litigants’ financial exposure, it also helps provide more budgeting certainty and increases settlement negotiation power by knowing that their adversary’s attorney fees are covered should the litigant be unsuccessful in the suit.

Click here to learn more about CLI and how it can provide coverage to your clients ONCE LITIGATION HAS COMMENCED.