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home > FAQ What Is Needed For Filing A Claim?
How Is The Policy Triggered?
How Long Does The Coverage Last?
How Much Coverage Should Be Obtained?
What Is Needed To Apply For A Policy?
When Can A Litigant Purchase/Apply For A Policy?
What does the Contract Litigation Insurance policy cover?

What does the Contract Litigation Insurance policy cover?

As a general matter, certain contracts provide that, if a lawsuit arises out of the contract, the prevailing party in the litigation is entitled to recover their attorneys’ fees from the losing party. This provision in a contract is known as a “fee shifting” provision or a “prevailing party” provision. Sonoma Risk’s CLI policy covers the amount of attorneys’ fees awarded by a court, after trial or summary judgment, up to the policy’s limits.

When Can A Litigant Purchase/Apply For A Policy?

Litigants, from individuals to corporations, may purchase/apply for policies from Sonoma Risk. A Plaintiff Contract Litigation Insurance policy can be purchased/applied for within the first 60 days of the initial filing of the complaint and a Defendant Contract Litigation Insurance policy can be purchased/applied for within 60 days of service of the complaint.

What Is Needed To Apply For A Policy?

Each application for insurance is evaluated on an individual basis. The requirements include:
1. A filed stamped copy” of the complaint (a stamp that is placed on a complaint when it is filed at a courthouse) displaying the date upon which the complaint was filed.
2. A copy of the underlying contract.
3. A completed CLI policy application.
4. Payment of premium.

How Much Coverage Should Be Obtained?

There is no way to know exactly how much the opposing party will spend on litigation. However, as a basic guideline, it is safe to assume that the opposing party will spend the same amount on legal fees as you.

How Long Does The Coverage Last?

CLI policies match the duration of the covered litigation. When the covered litigation terminates, the policy expires.

How Is The Policy Triggered?

The opposing party must be found to be the prevailing party at trial or summary judgment. The court must then order the policyholder to pay the opposing party’s attorneys’ fees.

What Is Needed For Filing A Claim?

Each claim is handled in a professional and expedient manner. The requirements include:
1. A filed stamped copy of the court order requiring the CLI policyholder to pay their adversary’s attorneys’ fees.
2. A filed stamped copy of all court orders issued in the case.