Every contingency fee law firm is already self-insuring one of its biggest investments.
The question is whether it has to.
Every case requires an investment long before there’s ever a recovery. Expert witnesses, depositions, medical records, trial exhibits, accident reconstruction, focus groups...the costs add up quickly, especially in complex medical malpractice, catastrophic injury, and product liability matters.
Those investments are necessary. They’re also at risk.
That’s where litigation cost insurance comes in.
What Is Litigation Cost Insurance?
At its core, litigation cost insurance protects the money a law firm invests into a case.
If a covered case is unsuccessful, the policy reimburses eligible litigation expenses that would otherwise come directly off the firm’s balance sheet.
The goal isn’t to change how attorneys evaluate cases or try lawsuits. It’s to give firms another way to manage the financial risk that comes with contingency fee litigation.
Litigation Cost Insurance Isn’t Litigation Funding
One of the biggest misconceptions we hear is that litigation cost insurance is just another form of litigation funding.
It isn’t.
Litigation funding provides capital to finance a case. Litigation cost insurance protects the capital a firm has already committed.
That’s an important distinction.
Many plaintiff firms don’t need additional funding. They have the resources to invest in strong cases. What they’re looking for is a way to protect those investments if a case doesn’t go their way.
Insurance fills that role.
Why Premium Timing Matters
Not every litigation cost insurance policy is structured the same way.
One of the first questions firms should ask is when premiums are due.
If a premium has to be paid upfront, that’s another expense added to the cost of pursuing the case.
Some policies are structured differently, with premiums due only after the case concludes. With Redan, firms don’t have to tie up additional capital while a case is pending. Premiums are only due once the case concludes and the outcome is known.
For contingency fee firms, that flexibility can make a meaningful difference.
Protecting Against the Cases You Can’t Predict
Every experienced trial lawyer has lived through it.
A strong case takes an unexpected turn. A key witness changes testimony. An evidentiary ruling shifts the trial. A jury reaches a surprising verdict.
Sometimes you simply lose.
When that happens, the financial loss isn’t limited to attorney time. The firm is also absorbing every dollar it invested to move that case forward.
Litigation cost insurance helps soften that financial impact by reimbursing covered litigation expenses when a covered case doesn’t result in a recovery.
It doesn’t eliminate litigation risk.
It helps firms manage it.
Why More Firms Are Paying Attention
Case costs continue to rise, and so does the amount of capital firms have tied up in active litigation.
For many plaintiff firms, litigation cost insurance has become less about avoiding risk and more about managing it strategically.
Protecting advanced case costs can help firms take on larger matters, preserve capital for future cases, and reduce the financial impact of the occasional loss that every contingency practice experiences.
The reality is simple: plaintiff firms will always invest in their cases.
The question is whether those investments should remain completely uninsured.