The plaintiffs’ bar may find losing more affordable, following the recent introduction of contingency insurance that pays an attorney when they lose a case to a defense verdict.
Level Insurance is a new Miami-based insurance agency behind the contingency insurance concept. Created by trial lawyers for plaintiffs and their attorneys, the firm’s “Litigation Cost Protection” (LCP) service offers insurance protection for litigation expenses up to policy limits if the attorney loses an insured case.
Coverage levels range from $10,000 to $250,000. (It is noted that the agency’s website says coverage starts at $3,500, but the underwriter indicates $10,000.) Policies can be purchased within 60 days of filing a complaint. The program is managed by Socius Insurance Services Inc. and underwritten by Aspen Specialty Insurance Co.
Coverage is available nationwide for cases in federal court. State court case coverage is available in Florida, Texas, California, New York, New Jersey, Illinois, Louisiana, Alabama, Mississippi and Georgia as of October 2016, with plans to expand to all 50 states soon.
Policy premiums are 7 percent of coverage, exclusive of taxes and (undisclosed) fees, for all case types. Premiums start at $750. Attorneys’ fees are not included in the costs covered.
Applications are taken online, and coverage is bound immediately. Policies are purchased on a case-by-case basis. If the plaintiff attorney suffers a total loss of “covered” fees due to the trial outcome, the LCP insurance will reimburse the attorney for litigation costs within the terms of the policy.
Cases targeted at the federal court level include matters involving contracts, torts, and the Federal Tort Claim Act. State cases targeted include the following:
- Auto/trucking negligence
- Contract and indebtedness
- Medical malpractice
- Premises liability/negligent security
- Product liability
- Professional malpractice (other than medical malpractice)
- Other negligence
Excluded matters include class actions, alleged civil rights violations, and cases in which the defendant is a public entity, such as a government, governmental agency or municipality.
Aspen Insurance provides an online broker reference guide for the Litigation Cost Protection coverage.
About the Backers for Level Insurance
Level Insurance co-founders Justin Leto and Larry Bassuk are Florida attorneys with the law firm of Leto Bassuk. According to a LinkedIn profile, Leto Bassuk is a civil law firm specializing in catastrophic injury, wrongful death, medical malpractice, complex commercial litigation and family law. Justin C. Leto and Larry Bassuk practice throughout Florida in state and federal court and have extensive experience as civil trial lawyers.
Patrick E. Hanley, Sr., President of Socius Insurance Services, Inc., serves as an advisor to Level Insurance as well as a member of the Board of Directors. Socius is a nationally recognized wholesaler, insurance broker and managing general agent with a concentration in management, employment, and cyber and professional liability coverage.
Benefits for Plaintiff Attorneys
Advantages for the plaintiffs’ bar include significant risk management protection. Level Insurance describes the key advantages as follows:
- First and only litigation cost protection insurance
- Protects against the loss of cost disbursement in the event of a total loss at trial
- Reimburses covered costs spent in furtherance of litigation up to the policy limits
- Promotes continued solvency for litigators, even after a substantial trial loss
- Allows the lawyer or plaintiff to focus on the case rather than the risks associated with financing the out-of-pocket costs of the case
- Affordable rates
- Transparent, no-hassle protection
- Backed by an ‘A’ rated (Standard & Poor’s) national insurance company
- Eliminates the risk of losing the out-of-pocket investment in the event of a trial loss
(Note: This article was updated to include expanded state coverage on October 15, 2016.)
Implications for Insurance Defense Law Firms
While plaintiff attorneys will still have to front the costs of litigation (see our related article on litigation funding), the ability to eliminate the financial impact of a total loss will be a major advantage.
Defense firms may find that plaintiff attorneys will stay in a case longer, be less likely to settle early, or assess incoming cases differently.
There are many implications to litigation insurance that might change the course of a lawsuit. Stay tuned as we follow news of this emerging trend.
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