Can insurance help my company cover the costs of our business or commercial litigation?
Yes, insurance can help companies mitigate the financial risks associated with business or commercial litigation. Such coverage is typically found under “Commercial Legal Expense Insurance” or “Litigation Cost Protection.” “Directors and Officers Insurance” (D&O Insurance) may also cover the defense of certain claims. This insurance generally covers legal defense costs, court fees, and in some cases, even awards or settlements. The specifics depend on your policy, but it’s designed to lessen the financial burden of litigation.
Why Consider It? Litigation can be expensive. Whether your company is defending itself against a claim or pursuing a legal action, costs can accumulate quickly, impacting your company’s finances. Insurance can help stabilize these unpredictable costs.
It is also crucial to understand that not all commercial litigation insurance covers every type of litigation or legal dispute. There may be exclusions, so it’s essential to read the policy terms or consult your legal team.
Before purchasing, assess your business’s litigation risks. Companies in highly regulated industries or those with extensive contractual dealings might benefit most.
In summary, while commercial litigation insurance doesn’t prevent legal disputes, it can provide significant financial relief during such challenging times. If you’re concerned about potential litigation costs, it’s wise to explore insurance options tailored to your business’s needs.