What Is Litigation Insurance?

Litigation insurance protects you if you are in a lawsuit. (This is different from insurance litigation, which is the topic of lawsuits regarding insurance.)

Patent enforcement insurance and patent defense insurance are two examples of litigation insurance. Patent enforcement policies pay when you assert your patents against a competitor. In other words, the insurance policy pays for you to start the lawsuit.

On the other hand, patent defense policies pay for your defense if someone else starts the lawsuit.

Different Types of Litigation Insurance

Any time you are involved in a lawsuit, there are lots of risks. The outcome is uncertain – you may win, you may lose. The amount of damages in a lawsuit may be in the millions – or it may be $1.

Insurance is often available any time you are in a lawsuit. The insurance policy can be written to cover an adverse outcome. These policies are carefully evaluated by underwriters and may be quite expensive.

However, you may be able to subrogate your portion of the lawsuit to the insurance company. The insurance company will have more resources and expertise that they can bring to the lawsuit, making it more successful.

These types of insurance policies are a very niche product. You want to find an insurance broker who specializes in your type of litigation and has good relationships with insurers.