Litigation Buy-Out Insurance (also known as Litigation Containment Insurance)
When a company is facing the threat or existence of litigation, it can have a significant impact on M&A activity — disrupting deals, delaying closings, or depressing valuation. In these situations, litigation buy-out insurance can provide a practical solution.
This specialist insurance product is designed to ring-fence actual or potential legal liabilities, enabling transactions to proceed with greater confidence.
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A litigation buy-out policy can cover:
Alleged liabilities or damages tied to existing or threatened litigation
The defence costs of the insured
Settlement amounts, subject to policy terms
The key purpose of the policy is to transfer the litigation risk to an insurer so that it no longer weighs on the balance sheet, or the deal.
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Litigation buy-out insurance is often deployed in the context of:
Corporate mergers and acquisitions
Private equity exits
Distressed asset sales
Legacy risk management
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Contact our team to discuss how litigation buy-out insurance could support your transaction. We'll advise on the viability of cover and help structure a solution aligned with your commercial goals.