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Contingent Risk Insurance

What is contingent liability insurance?

Contingent liability insurance (also known as ‘special situations’ insurance) offers cover for an identified legal risk allowing a party to reduce or eliminate an exposure. The product has very broad applications and can be used to cover any legal risk relating to interpretation of the application of law (including in the context of litigation).

By transferring an identified risk to an insurance policy, a party can cap or ring-fence a potential exposure or, if necessary, release committed capital. The insurance is designed to cover ‘low risk : high impact’ identified risks.

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Brockwell Cover – Headline Details

Limit of Liability

up to £45m (or local equivalent)

Minimum Premium

typically £100,000 or local equivalent excluding applicable taxes


no restrictions except pure USA risk (see FAQs below)


unlike some insurers we can insure individuals.

Policy Period

up to a maximum of 7 years

Policy Excess:

defence costs only (nil excess possible)

See the FAQs below for further information.

Why Choose Brockwell

Our Team has more than 50 years of combined expertise in relation to transactional risk insurance dating back to 2004 and this market-leading experience means that we are able to underwrite a broad range of risks. We are particularly experienced with insuring contingent risks arising in the asset management or pensions industries. The range of professional experience in our Team allows us to assist clients with a large spectrum of legal risks.

See About Us for more information about Brockwell.

How can contingent liability insurance help me?

Special situations insurance is a way to manage financial risk or obtain the certainty that allows commercial activity to progress.

For example, insurance can be used:

  • to prevent need for an indemnity or escrow
  • as an alternative to a price adjustment
  • as a way of gaining comfort beyond an adviser’s opinion

to give peace of mind in respect of a legal risk (e.g. relating to breach of contract

What are the typical contingent liability insurance policy exclusions?

Special situations insurance will, as a result of exclusions, not typically offer cover:

inaccurate representations

In order to underwrite the legal position we rely on certain facts as represented to us in the policy (unless these can be sufficiently evidenced).

change in law

We are unable to underwrite a future change in law which affects the position insured.

implementation failure

As it is within the control of the policyholder we do not underwrite the implementation of a transaction (e.g. failure to follow legally prescribed procedures or agreed transaction steps).

deliberate non-compliance with certain conduct provisions

This mainly protects against moral hazard. For example, if an insured wilfully triggers or increases the risk then we do not offer cover.


We cannot offer insurance to the extent arising from fraud or intentional unlawful behaviour.


Obtaining a quote costs nothing and is very quick. Please visit Quotes.

You can also get a quote for special situations insurance by contacting your insurance broker and providing our contact details.

As each special situations risk is highly bespoke, it can take time to ascertain what cover we can offer and what precisely is commercially required by the prospective policyholder. Where comprehensive information is provided from the outset, we typically provide a quote for insurance within 48 hours from receipt of the request for terms.

Once appointed to underwrite, subject to the complexity of the risk, we can issue a finalised policy within five business days although we are regularly asked to cover complex issues (e.g. multiple counterparties, litigation, etc) and on average it takes two weeks, but it may take longer.

We will provide an indicative timeline when we provide terms of insurance.

The costs of special situations insurance will typically comprise the premium, applicable premium taxes, an underwriting fee, and brokerage.

A single, up-front premium is payable. Our minimum premium is typically £100,000 (or equivalent). The applicable insurance premium tax will depend on the location of the policyholder. However, we consider each transaction on its own merits and we can offer a lower premium on an exceptions basis.

Our external expenses vary according to the complexity/size of the risk and the scope of work required. Typically, our external expenses are £10,000 – £30,000 (or equivalent).

If you are using an insurance broker then the structure of their brokerage will depend on the agreement they have with you. Typically, brokerage is a percentage of the premium (and we will provide a gross premium quote, i.e. inclusive of brokerage), but some brokers work to a fixed fee with their clients.

A special situations policy may include a retention (or excess). For example, in respect of the costs of litigation (if cover in this respect is sought) or such that the insurance provides cover above a certain financial threshold. Otherwise the retention will be nil.

We can offer a seven-year policy period.

When seeking a quote for special situations insurance the following information should be provided: (i) an outline/description of the risk, (ii) details and analysis of any facts relevant to the risk (both positive and negative), (iii) a calculation of the limit of insurance required, (iv) details of what insurance is required (e.g. who is the insured, policy period, limit of liability, etc), and (v) copies of any legal/technical advice in relation to the risk.

Please visit Quotes to seek terms of insurance.

We do not currently offer insurance either to USA insured persons or in respect of purely USA risks. If the legal risk to be covered is not a USA legal risk but the ultimate beneficiary of the policy is a USA person, we may be able to propose a workable insurance structure. We are particularly experienced with offering structures for USA asset managers making inbound European investments.

Beazley will be primarily responsible for claims handling. They are a highly regarded insurer and have an award-winning claims team that has dedicated claims handlers for transactional insurance risk. Beazley specialise in dealing with complex, multi-jurisdictional matters.

The senior underwriter assigned to your transaction will assist with each step of the claims process.

See Claims for more information.

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