The FINANCIAL -- Zurich, one of the leading writers of program business in the United States, announced on March 8 that it is working with Sonoma Risk Insurance Agency (Sonoma Risk), to offer a first-of-its-kind attorneys’ fees insurance program in the U.S. – Plaintiff Contract Litigation Insurance (PCLI).

This new PCLI program is designed to insure a plaintiff in a contractual lawsuit against the risk of paying their adversary’s attorneys’ fees if unsuccessful in prosecuting their contract claim.

“We anticipate this new program will provide plaintiffs with added budgeting certainty for their litigation by decreasing one of the significant unknown financial exposures in contract litigation,” said Craig Fundum, president of Programs & Direct Markets for Zurich North America Commercial.

Sonoma Risk Founder and CEO Kevin B. Martin, a former partner at Bingham McCutchen, predicts that discussing the PCLI program will become a best practice for attorneys counseling plaintiffs facing the risk of having to pay their adversary’s attorneys’ fees.

According to Martin, “attorneys do their best to thoroughly assess the strengths, weaknesses, positions and uncertainties of their clients’ cases. Discussing our program with a client serves to support these and other important best practices since it further helps attorneys protect their clients from financial exposure.”

This sentiment was echoed by Fundum, who stated, “Attorneys strive to uphold the ethical and professional responsibilities that come with practicing law, and by sharing information about the benefits of this new program with their clients, they are exhibiting their continued desire to advise and serve their clients well. By offering this program, Zurich and Sonoma Risk are helping lawyers mitigate their clients’ financial exposure.”

According to Damiano Servidio, vice president of Professional Services for Zurich’s Programs unit, contract lawsuits are time-consuming, emotionally draining and financially risky. This insurance program is an additional tool enabling attorneys to help manage their client’s costs and minimize the unknown risks in litigation.

Key information regarding the PCLI program is as follows:

- Plaintiffs can apply for a policy any time within the first 60 days of filing the underlying lawsuit;
- Policy coverage period matches the duration of litigation; and
- Policy is triggered when the defendant prevails at trial or summary judgment.

“We are excited to work with Zurich in North America, a member company of Zurich Financial Services Group, which is a well-positioned and financially strong1 insurance carrier.  Zurich in North American has experience in helping protect lawyers2 from the risks they have faced for nearly two decades,” said Sonoma Risk President Larry Kruger. “Zurich has demonstrated a commitment to this program and to helping plaintiffs obtain greater budgeting certainty when prosecuting their contract claims.”

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