Zurich, a property and casualty insurance provider globally and in North America, part of Zurich Financial Services Group, has expanded its programs unit by launching Defendant Contract Litigation Insurance (DCLI) policy to help protect defendants. The policy will be provided through Sonoma Risk Insurance Agency.
Zurich said that the DCLI program is similar to its Plaintiff Contract Litigation Insurance (PCLI) designed to insure defendants in contractual lawsuits against the risk of paying their adversaries’ attorneys fees if unsuccessful in defending against a breach of contract claim.
According to the Zurich, both defendant and plaintiff contract litigation insurance can offer a variety of benefits to businesses and individuals some of which might include: reduced financial risk exposure; the ability for companies and individuals to pursue strong claims that otherwise may be abandoned due to potential financial liability; and the ability for general counsels and business owners to budget litigation costs more effectively.
To provide the maximum amount of flexibility to businesses and individuals, the defendant contract insurance can be applied for 60 days from the date a defendant is served with a complaint. The policy coverage period matches the duration of the litigation and will be triggered when the plaintiff prevails at trial or if a summary judgment is issued against the defendant.
Craig Fundum, president of programs and direct markets for North America commercial business at Zurich, said: “The financial liability of paying your adversary’s legal fees is a serious concern. The Bureau of Justice Statistics recently reported that, on average, two out of three defendants in contract cases lose at trial. This policy is intended to help mitigate the risk of an adverse judgment.”
Kevin Martin, founder and CEO of Sonoma Risk, said: “Now with both plaintiff and defendant policies, companies and individuals can be protected from paying their adversary’s legal fees – allowing them to pursue cases based on merits, not just financial concerns.”
According to Damiano Servidio, head of professional services for Zurich’s programs unit, Zurich accelerated the introduction of the DCLI Program in response to the legal community’s strong receptivity to the PCLI program and their subsequent demand for a program to cover a defendant in contract litigation.
Mr Servidio added: “Based on the needs expressed by the legal community for a defendant policy, we expect a strong demand for Defendant Contract Litigation Insurance, particularly because defendants in lawsuits have less control over the prosecution, and, according to the Bureau of Justice Statistics, face a greater chance of losing at trial.”