Litigation Buyout Insurance

Litigation Buyout (LBO) Insurance provides companies with the ability to successfully ring-fence litigation exposure and transfer the full financial risk of class action, antitrust and non-class litigation. With LBO Insurance, the insurance carrier takes on the financial risks and liabilities for businesses – at any time before settlement and for a known, fixed cost. In the context of an M&A transaction or financing, LBO Insurance may negate the requirement for the use of escrows or indemnities for covered litigation, providing certainty and finality to both parties to the transaction.

Stage of Litigation

LBO Insurance can be purchased at any stage of litigation prior to a settlement being reached between the parties.

How It Works

Each policy is customized to meet a company’s specific business, financial and legal objectives. For those cases where settlement is not an immediate option or business reasons make time of the essence, LBO Insurance provides a clear path. In exchange for the insurance premium, the insurance carrier will:

• Take over the defense of the litigation
• Take financial responsibility for defense costs
• Cover any adverse judgment

Key Benefits

• Provides risk transfer for known, threatened or pending litigation in exchange for a fixed premium
• Covers the financial risk of litigation, defense costs and adverse judgment
• Facilitates M&A and financing transactions by ring-fencing known litigation
• Risk analysis provided at no cost or obligation
• Achieves financial certainty so the company can get back to its core business