Contingent Liability Insurance
Contingent liability insurance is a tailored insurance solution that is designed to address a specific financial exposure of the insured, should they experience an adverse outcome in the resolution of a specified contingent liability. This Insurance can cover damage awards, settlement costs, defense expenses — including those for engaging legal or other professional experts — and other potential liabilities that might arise in the context of a particular dispute.
Contingent liability insurance can be used to mitigate or remove uncertainty in respect to a wide range of issues, including:
- Potential or ongoing litigation, arbitration, appeals or challenges to awards
- Successor liability
- Intellectual property
- Open directors’ and officers’ liability issues
- Employee disputes
- Breach of a supply contract
The insured can transfer the risk of actual or potential contingent liability losses to an insurance policy thereby eliminating future financial exposure. Contingent liability insurance can also facilitate M&A transactions by ring fencing issues that are a roadblock to a potential company sale or acquisition.
Contingent Liability Insurance in Korea
ARIA has advised on several contingent liability insurance policies to address unique events in Korea where the potential outcome and related financial exposure was difficult to determine. These highly customized insurance solutions can also bring more certainty to issues identified at target companies so that the sale process could proceed.