Judgment Preservation Insurance

Understanding Judgment Preservation Insurance (JPI): A Comprehensive Overview

With any significant trial court judgment, there is always a risk that the appellate court will reverse (in whole or in part) or reduce a damages award. Judgment Preservation Insurance (JPI) allows a plaintiff who prevailed at the trial court level to insure all or part of a damage award while an appeal is pending. Put simply, JPI is a targeted way to ring-fence appellate risk while allowing companies with a favorable judgment to immediately leverage the financial benefits of the award. JPI can be used in the context of summary judgment awards, trial verdicts, and arbitration wins. With JPI, a plaintiff with a trial court win can obtain immediate protection of a judgment threatened with reversal or damage reductions on appeal.

Stage of Litigation

Judgment Preservation Insurance is purchased post-judgment.

How Judgment Preservation Insurance Works: The Process Explained

Any company with a favorable judgment can consider transferring the appellate risk through the purchase of JPI. Using the following easy steps, Certum Group can assist a company with assessing its options:

• Determine if the company’s judgment is appropriate for JPI. Most insurable cases are those with solid appellate legal issues and large judgments.
• Once the company has identified a case it thinks may benefit from JPI protection, the insurer will conduct an underwrite of the risk, which generally requires diligencing the record and assessing the legal and factual issues.
• Once the initial assessment is complete, the insurer will usually engage in a Q&A with the company to help resolve any open items.
• If the risk is insurable, the insurer will propose policy terms and pricing.
• A one-time premium transfers up to 100% of the judgment risk to the insurer.

Key Benefits of Opting for Judgment Preservation Insurance

• Provides certainty: regardless of what happens on appeal or in subsequent proceedings, the plaintiff will recover an agreed-upon amount of the judgment or award.
• Alleviates litigation fatigue by providing a plaintiff the security it needs to continue the fight.
• It can augment additional monetization options, as JPI is often used in conjunction with litigation funding, which can provide access to liquidity and better financing terms.
• Facilitates settlement as JPI can provide the leverage needed to mitigate any notion that a cash-strapped plaintiff will settle on the cheap.