Insurance Company Creates Policy to Cover Costs of a Losing Lawsuit

If you’re one of the countless numbers of Americans who think that it’s just too darn easy to sue people in this country, then this is not news you want to hear:

It’s now even easier.

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According to an article over at Entrepreneur.com, a startup insurance company has introduced a policy that will reimburse to a losing plaintiff many of the costs associated with bringing a lawsuit.

The company, Level Insurance, was started by Miami-based attorneys Larry Bassuk and Justin Leto, and it offers something called a Litigation Cost Protection policy that will help defray a variety of the expenses that can be incurred in the course of bringing a suit.

While the insurance does not cover attorney’s fees, it will reimburse, up to $250,000, costs associated with things like gathering expert witnesses, e-discovery, courtroom technology, exhibits, forensic accounting, and much more.

The cost of the insurance is seven percent of the maximum value of the policy.

Attorney Bassuk told Entrepreneur.com that the policies have especially resonated with lawyers whose practices include bringing contingency cases. While contingency cases can be attractive for prospective plaintiffs with little money, the financial risks for attorneys can be substantial; should they bring a suit and lose, a plaintiff who didn’t have much money to begin with is in no position to cover the additional costs and expenses necessary to put on an effective case.

“The ultimate underdog scenario is an individual who doesn’t have the capital to bring suit against a large corporation, they need a lawyer to bring the case on a contingency basis,” Bassuk told Entrepreneur.com. “Day to day, lawyers doing contingency work who get an expensive case to prosecute want to spread the downside risk if the case loses.”

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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