Liberty GTS unveils contingent legal risk insurance offering

Liberty Global Transaction Solutions (GTS), part of Liberty Mutual Insurance, has launched a contingent legal risk insurance (CLRI) product, within its global portfolio of transactional risk products and services.

Aude Bonnemaison, a representations and warranties / warranty and indemnity (RW/WI) insurance underwriter within Liberty GTS who has prior experience with this product, has been named as the group’s first underwriter dedicated to CLRI. She reports to Liberty GTS chief underwriting officer Gareth Rees, who heads up this new division.

CLRI covers a broad and diverse range of known liability risks that are typically low probability but high severity, with Liberty GTS offering coverage of up to $165 million per CLRI policy.

Covered risks include court judgements being overturned on appeal, revocation of regulatory permits or consent or funds being locked in escrow due to creditor claims preventing either cash being released from an escrow.

Such risks can arise during M&A transactions or have no connection to a specific deal, but must have the possibility of being legally evaluated and analysed.

Where used on a deal, CLRI may be used in conjunction with RW/WI insurance policies, and is often used to cover a known risk that has been excluded from cover under such policies. Like tax liability insurance, CLRI covers known legal risks, whereas RW/WI policies cover unknown risks.

Rowan Bamford, president of Liberty GTS, said CLRI is a natural fit within Liberty GTS’ portfolio, given its commitment offering a comprehensive suite of solutions to the M&A market.

“Our team of seasoned underwriters will focus on the specific facts that shape and inform the contingent risk in order to provide bespoke insurance policy coverage meeting our clients' needs,” he said.

Liberty GTS underwrites M&A lines of business on behalf of Liberty Mutual's Lloyd's of London Syndicate 4472 and Liberty company platforms.