Commercial After The Event Insurance
Commercial After the Event Insurance
Commercial after the event (ATE) insurance is considered an essential addition to your CFA, DBA, or private retainer. Although your lawyer will not charge you any fees for their work done, if your legal dispute loses or is abandoned by agreement, own disbursements and other costs and disbursements will still have to be paid by you.
This is where Commercial ATE Insurance comes into play.
Commercial ATE insurance can provide an indemnity for many types of dispute, including; contract disputes, debt recovery, insolvency, construction, arbitration, professional negligence and property disputes, to give a few examples.
ATE insurance policies indemnify the insured against;
adverse legal costs and disbursements if a legal dispute is lost or discontinued.
cover will also be provided for own disbursements,
own counsel’s fees can also be included if required.
An ATE policy can have a fixed price or a staged price, or a combination of pricing structures.
So how much does ATE cost? is a very common question from potential claimants. Well, it’s not cheap, there are some very high costs involved in commercial litigation, as your lawyer will have already told you by this stage of the litigation journey.
ATE insurance being granted is by no means guaranteed. Just as your lawyer carried out a risk assessment at the outset of your legal dispute, so will the ATE insurer wish to do the same.
Commercial ATE Insurance Risk Assessment
When your lawyer submits your legal dispute for ATE insurance either directly or through an ATE insurance broker, the underwriter will usually follow a risk assessment process as described below;
Your legal dispute is reviewed to ensure it fits within the underwriters prescribed risk appetite.
The underwriter will review your submission to ensure all the appropriate documentation has been provided and correctly completed. This is likely to include;
A completed commercial ATE insurance proposal form
A statement / summary of the case
Letter of claim, and any reply
Counsel’s opinion, with prospects of success noted as a % figure
Any other relevant information, reports etc.
The underwriter will then review your dispute in great detail looking at things such as; is the case jurisdiction within appetite? Is the acting lawyer an expert in the field? Is the case nearing trial? Are the legal merits of the case 60% or above? Is the defendant able to satisfy any judgment? plus many more.
If the underwriter is not satisfied with the overall merits of your dispute, it is declined.
If the underwriter agrees the legal dispute meets the requisite merits for acceptance, they would then propose premium rates in accordance with their firms underwriting rating guidelines.
The Cost of an ATE Insurance Premium
There are many different rating structures and options, but the most basic example is simply a % rate multiplied by the limit of indemnity sought, for example 25% x £100,000 = £25,000.
Other options can include staged, paid up front, deferred or a mixture if required.
Be warned, the later your lawyer leaves asking for ATE insurance, the more expensive it will become, or if it’s too late, such as a month or two before your trial date, you may not get cover at all.