Prospective coverage is a bespoke policy that allows companies to transfer the risk of potential, known or threatened liabilities to a third-party carrier in exchange for a one-time fixed premium.

Prospective coverage is leveraged when potential litigation is identified during the due diligence phase of a corporate transaction or during a general review of a company’s business operations.

The policy provides certainty for businesses which are concerned about a potential litigation risk by providing coverage should the identified risk materialize.

By transferring the risk of potential litigation, Prospective Coverage helps companies avoid costly escrow deposits for potential damages, facilitates M&A and financing transactions by ring-fencing the litigation risk and helps companies get back to their core business.