What is Litigation Cost Protection?

Litigation Cost Protection is insurance to cover costs spent by plaintiffs’ attorneys and litigants in furtherance of the case. Litigation Cost Protection is sold on a case-by-case basis, providing a unique opportunity to insure each case’s individual cost disbursements. Litigation Cost Protection covers costs spent in furtherance of litigation including expert costs, deposition transcripts, travel costs (hotels, airfare and ancillary travel expenses), filing fees, trial exhibits, mediator expenses, copies, e-discovery, and all other costs spent directly on the case.

What types of cost disbursements are covered?

Litigation Cost Protection covers costs spent in furtherance of litigation. These cost disbursements include, for example, expert witness fees, travel expenses, court reporter fees, trial exhibit costs and all other money that you invest into the lawsuit that is spent in furtherance of it. The policy does not use qualifiers like “reasonable costs” you are reimbursed for whatever you spend, period.

Who can purchase a Litigation Cost Protection policy?

Attorneys and plaintiffs who are financing the litigation. Attorneys who represent clients on a contingency fee basis can purchase Litigation Cost Protection on a case-by-case basis. Likewise, plaintiffs who have retained an attorney pursuant to an hourly or other fee arrangement and are paying litigation costs themselves can directly purchase Litigation Cost Protection. Litigation Cost Protection is not available to defendants.

What types of cases are eligible for Litigation Cost Protection?

Litigation Cost Protection is available for most tort claims and contract actions. For example, Litigation Cost Protection may be purchased for professional liability cases (including medical malpractice), product liability, premises liability, auto/trucking negligence, and business torts. Additionally, Litigation Cost Protection is available for most contractual cases, including breaches of contract, mortgage foreclosure, promissory note claims and other claims for indebtedness.

Where is Litigation Cost Protection available?

Currently, Litigation Cost Protection is available for state court actions filed in: Alabama, California, Florida, Georgia, Illinois, Louisiana, Massachusetts, Minnesota, Mississippi, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Washington, and Virginia. Litigation Cost Protection is available in any District Court case filed in any federal court in the United States. It is anticipated that the geographic area will expand in the future.

How can I buy Litigation Cost Protection?

It’s easy: click here to apply. Litigation Cost Protection is available for purchase online and is bound and issued immediately after the applicant satisfactorily answers four simple eligibility questions.

When can I buy Litigation Cost Protection?

Litigation Cost Protection is available for purchase up until 90 days after the initial complaint has been served upon the defendant.

How much does Litigation Cost Protection cost?

The policy premium for Litigation Cost Protection is 7% of your selected policy limits. So, for example, if you choose a $50,000 policy, you pay a one-time policy premium of $3,500. Additional fees and taxes will apply. The payment is made by credit card or ACH online during the application process.

How do I know if I qualify for Litigation Cost Protection?

Apply here and satisfactorily answer 3 simple eligibility questions. It’s that easy.

Who created Litigation Cost Protection and why?

Litigation Cost Protection was created by trial attorneys who understand the burdens of financial risk placed upon attorneys and plaintiffs. As the costs of litigation continue to increase, so do the risks associated with litigation. The founders of Litigation Cost Protection recognized that this risk was insurable but that no product existed to protect against this risk. As a result, they developed this first-of-its kind solution to help balance a system that has been historically weighted in favor of the defense.

What is not covered?

Attorney’s fees, general overhead and/or office expenses, an opposing party’s costs or attorneys’ fees as may be awarded by the Court, and the premium paid for this policy are not covered.

Are “costs” limited to what is considered a “taxable cost?”

No. “The cost does not need to qualify as a “taxable costs.”

Can I buy Litigation Cost Protection coverage on an annual basis for my law firm?

No. Litigation Cost Protection is offered on a case-by-case basis. You have the freedom of choosing the cases for which you would like to purchase Litigation Cost Protection.

How do I know if my case qualifies for Litigation Cost Protection coverage?

Apply here and answer 3 simple eligibility questions. It’s that easy.

What limits are available?

The minimum Litigation Cost Protection policy limit is $3,500 and the maximum policy limit is currently $250,000.

Are there pre-set limit amounts?

No. You have the freedom of choosing the policy limit that is custom-tailored to your case. You choose your policy limit during the application process.

For contingency cases, can a lawyer include the cost of the premium for Litigation Cost Protection on the Closing Statement when a case either settles or results in a recovery at trial?

The premium paid for the Litigation Cost Protection policy may be able to be passed through to the client where state bar guidelines and your retainer agreement allow; however, the Litigation Cost Protection policy would not be triggered in the event of a settlement or a recovery.

Is the premium paid for a Litigation Cost Protection policy a reimbursable “cost” in the event of a claim?

No. The premium paid for Litigation Cost Protection is not reimbursed to the insured in the event of a loss.

What happens if there is an appeal?

Your Litigation Cost Protection policy follows the case through appeal, up to policy limits. Your claim is paid after the appellate process has concluded. So, for example, if your case goes to trial and loses, and no appeal is filed, you may submit your claim for payment after the window to file an appeal has expired. If, on the other hand, an appeal is filed, you may submit your claim for payment after the appellate process concludes.

When does the Litigation Cost Protection policy pay out?

If your case goes to trial and loses (zero-dollar recovery). The covered case must go to trial and lose. If the case settles, for example, or is disposed of on summary judgment, there is no coverage for any costs incurred.

How do I make a claim?

You make your claim through our website. You simply upload the required documents (which include (i) a certified copy of the adverse judgment; (ii) a detailed, line-item listing of all litigation costs and invoices evidencing the same; and (iii) proof of payment).

Is Litigation Cost Protection similar to litigation funding or litigation finance?

No. Litigation Cost Protection is an insurance product. Level Insurance does not loan money or otherwise finance cases. Instead, Litigation Cost Protection is there to provide reimbursement of monies spent by the lawyer or litigant if the case goes to trial and loses (zero-dollar recovery).

Is Litigation Cost Protection assignable to a successor counsel?

If Litigation Cost Protection is purchased by the litigant, it is the litigant’s policy regardless of change in counsel. However, if Litigation Cost Protection is purchased by the attorney, the policy is not transferable.

What happens if I settle with one defendant and proceed against others?

The recovery you obtain if you settle against one defendant will offset the amount of coverage available under your Litigation Cost Protection policy. For example, if you have a $100,000 policy and settle against Defendant “A” for $15,000, you will then have $85,000 of coverage available under your policy as you proceed against Defendant “B”.

Are my cost expenditures second-guessed if I make a claim?

No.   If a covered expenditure was made in furtherance of the litigation, submit it with your claim for reimbursement. There is no requirement that an expense be “reasonable”. This is your case, and you know best what’s needed to prosecute it.

Who underwrites Litigation Cost Protection?

Coverage is provided by Aspen Specialty Insurance Company, a wholly-owned subsidiary of Aspen Insurance Holdings Limited (“Aspen”). Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Australia, Bermuda, Canada, France, Germany, Ireland, Singapore, Switzerland, the United Arab Emirates, the United Kingdom and the United States. For the year ended December 31, 2015, Aspen reported $11.0 billion in total assets, $4.9 billion in gross reserves, $3.4 billion in total shareholders’ equity and $3.0 billion in gross written premiums. Its operating subsidiaries have been assigned a rating of “A” by Standard & Poor’s Financial Services LLC (“S&P”), an “A” (“Excellent”) by A.M. Best Company Inc. (“A.M. Best”) and an “A2” by Moody’s Investor Service, Inc. (“Moody’s”).

Does a lawyer or law firm have to insure all of their cases in order to purchase Litigation Cost Protection?

No. Litigation Cost Protection can be purchased on a case-by-case basis at the discretion of the insured. There is no requirement to buy insurance on any case.

When I purchase Litigation Cost Protection, are only future costs covered?

Litigation Cost Protection is retroactive to the time a lawyer was first retained and follows the case. If you purchase Litigation Cost Protection within 90 days of service of the lawsuit, all covered costs expended prior to the purchase of the policy, dating back to when the lawyer was retained, are eligible for reimbursement.

What if I want to travel first class to a deposition instead of flying coach? Will my first class ticket be permitted as a “cost” under Litigation Cost Protection policy?

Yes. Litigation Cost Protection does not determine what is reasonable as far as litigation costs are concerned. As long as the money spent is in direct furtherance of the case, it is covered up to the policy limits. If a lawyer or litigant chooses to spend money on first class airfare or five star hotels, that is their choice. “Litigation Costs” is clearly defined in the policy and does not use qualifiers like “reasonable.”

Should I buy Litigation Cost Protection on a case with relatively low cost exposure?

Yes. The lower the cost exposure, the lower the premium. The policy premium for a case that may generate $10,000 in costs through trial is only $700 exclusive of taxes and fees.

How difficult is it to obtain a Litigation Cost Protection policy?

The application process is simple and is completed on-line. The applicants must identify themselves, the case names, answer three eligibility questions and attach a pdf copy of the operative complaint. That is it.

If I am a returning customer, do I need to answer the eligibility questions again?

Yes, but your background information will be saved. You will be asked to provide the new case name, a pdf copy of the operative complaint, and you will be asked to answer the 4 eligibility questions for this case.

How was Litigation Cost Protection invented?

Justin Leto and Larry Bassuk, two trial lawyers in Florida, recognized that plaintiffs and plaintiffs’ attorneys take on risks every time they bring a lawsuit. As trial lawyers, Mr. Leto and Mr. Bassuk decided it was time to level the playing field and provide long-awaited cost protection insurance for plaintiffs and plaintiffs’ lawyers in the event they fight and lose.

Why isn’t Litigation Cost Protection available in every state?

Litigation Cost Protection is rapidly expanding.  If you are in a state that is not presently on our website, please call or email us and we will work to get LCP in your state.

If I make a claim, how do I know I will get paid?

Litigation Cost Protection is underwritten by Aspen Specialty Insurance Company, a wholly owned subsidiary of Aspen Insurance Holdings Limited (“Aspen”). For the year ended December 31, 2015, Aspen reported $11.0 billion in total assets, $4.9 billion in gross reserves, $3.4 billion in total shareholders’ equity and $3.0 billion in gross written premiums. Its operating subsidiaries have been assigned a rating of “A” by Standard & Poor’s Financial Services LLC (“S&P”), an “A” (“Excellent”) by A.M. Best Company Inc. (“A.M. Best”) and an “A2” by Moody’s Investor Service, Inc. (“Moody’s”).

How are the policy limits determined?

By you. On the application, there is a space for you to input the amount of coverage you need. You can enter any number between $3,500 and $250,000 and the premium will be immediately calculated. You are not forced to buy pre-set limits. You choose what you need.

How often can I buy Litigation Cost Protection?

Every time you file a lawsuit, you can buy a policy for that lawsuit.

I am a commercial litigator and my clients pay fees and costs. How can Litigation Cost Protection benefit my law firm?

Litigation Cost Protection may provide a substantial competitive advantage. If a law firm recognizes that the costs generated by a particular case will be large, and that law firm is in competition with other firms to sign up the client/case, the law firm can offer to buy Litigation Cost Protection for the case as a way of incentivizing the client to sign with the firm. Clients recognize the risk and expense of litigation and will appreciate a law firm spending its own money on this valuable coverage. And with Litigation Cost Protection being nominally priced, the goodwill gesture of buying this coverage will be well worth the expense.

Other than providing coverage for the costs, what other benefits does Litigation Cost Protection offer?

The possibility of lower costs of borrowing from banks. When a law firm or lawyer seeks to borrow money from a bank or litigation finance company, a personal guarantee or UCC filing is often required. Additionally, the interest rates are typically quite high.   Policyholders seeking financing can utilize Litigation Cost Protection as a way to negotiate a better rate and better terms.

Does any coverage like Litigation Cost Protection exist?

No. This is a first-of-its-kind insurance.

What if I have more questions about Level Insurance of Litigation Cost Protection?

Send us an email to info@levelinsurance.com and we will respond quickly.

Affordable. Transparent. Groundbreaking.