Sonoma Risk Insurance Agency Reports Extraordinary Growth

LOS ANGELES, Aug. 25 /PRNewswire/ -- Since launching in April, 2010, Sonoma Risk Insurance today announced that it has sold $8 million in policy coverage for its first-of-its-kind contract litigation insurance.

In recent years, the American legal landscape has undergone a dramatic shift as dozens of states across the country, including Alaska, California, Oregon, Texas and others have adopted statutes that require the losing party to pay the prevailing party's attorney's fees in litigation. In addition, more and more contracts between businesses and even individuals are including "loser pays" provisions, (particularly in the areas of employment, entertainment, healthcare and real estate), that require the losing party in a litigation to reimburse the prevailing party their attorneys' fees spent in a litigation.

"With the changes in today's economy and legal landscape, you simply can't risk paying the other sides' legal fees. That's why from day one we've seen a strong demand for our policy as individuals, businesses and lawyers seek out new tools to help reduce financial risk," said Kevin Martin, Founder and Chief Executive Officer of Sonoma Risk Insurance.

Specifically, contract litigation insurance responds to the trend towards loser pays provisions in American law by:

• Mitigating litigation exposure for businesses and individuals
• Allowing general counsels and business people to budget more effectively for litigation expense
• Enabling companies/individuals to pursue and demand strong claims that otherwise may have been abandoned due to financial liability

Levels the Playing Field for Plaintiffs and Reduces Financial Risk for Defendants

An undesirable consequence of loser pays provisions has been that many companies and individuals are reluctant to pursue or defend meritorious claims for fear of running the risk of paying their adversary's attorneys' fees. That is why, in other countries where loser pays provisions are prevalent, litigation insurance has been used to help create a more level playing field and mitigate risk.

Best Practices for Lawyers

In addition, many lawyers have already begun to incorporate contract litigation insurance into their best practices. Lawyers have quickly found that discussing insurance options with clients helps them to feel more secure with their litigation exposure and also demonstrates sensitivity to the financial strain of litigation.

About Sonoma Risk's Contract Litigation Insurance

Sonoma Risk's flagship product, Plaintiff Contract Litigation Insurance™ (PCLI), is the first-of-its-kind policy in the U.S. specifically created to help protect plaintiffs from having to pay their adversary's attorneys' fees pursuant to a loser pays provision in contracts.

Sonoma Risk also recently launched is Defendant Contract Litigation Insurance™ (DCLI).

To provide the maximum amount of flexibility to businesses and individuals, both the PCLI and the DCLI policy can be purchased within 60 days of the commencement of litigation (PCLI) or 60 days of service of the complaint (DCLI).  

Zurich, one of the leading property and casualty insurance providers globally and in North America, is underwriting the policy.*

ABOUT SONOMA RISK INSURANCE AGENCY

Sonoma Risk is the only company in America dedicated to providing innovative and affordable litigation insurance to individuals, businesses and corporations.

Based in Los Angeles, with regional offices planned for the Midwest, Southwest, Southeast and Northeast, Sonoma Risk is comprised of a skilled management team of seasoned professionals within the legal and insurance industries.

For more information go to www.sonomarisk.com

* Policy issued by a member company of Zurich in North America. This coverage is offered only in certain jurisdictions and can be purchased only on a surplus lines basis from a licensed surplus lines producer.

SOURCE Sonoma Risk Insurance Agency