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Contract Litigation Insurance (CLI) from Monarch E&S Insurance is designed to protect your commercial clients from the financial risk of being ordered to pay an adversary’s attorneys’ fees after losing a breach-of-contract lawsuit. Monarch E&S places CLI on an excess & surplus (E&S) basis with capacity from admitted and non-admitted carriers, including Zurich North America where available.
Program overview — how CLI works
CLI covers the specific exposure of paying the opposing party’s attorneys’ fees that arise from prevailing-party provisions in contracts or statutes that permit fee-shifting. The policy responds when a court enters an award of attorneys’ fees against the insured following trial or summary judgment. It does not cover settlements, voluntary dismissals, defaults or stipulated outcomes where there is no court-awarded fee judgment.
Ideal accounts and appetite
Commercial contracts with written prevailing-party provisions (e.g., vendor, distribution, construction subcontract, technology licensing agreements).
Midsize and larger commercial disputes where potential fee exposure could materially affect the client’s balance sheet.
Both plaintiffs and defendants — Monarch offers Plaintiff CLI (PCLI) and Defendant CLI (DCLI) forms to match the insured’s position in the litigation.
Generally not a fit: matters filed initially in arbitration, non-contractual disputes, or claims involving court-sanctioned “bad faith” litigation conduct (these are primary exclusions).
Coverage highlights and advantages
Covers court-ordered adversary attorney-fee awards following trial or summary judgment.
Policy period follows the underlying litigation — coverage terminates when the lawsuit is finally resolved.
Separate forms for plaintiffs and defendants to align with the insured’s litigation posture.
Underwritten and placed by Monarch E&S, an MGA and E&S broker with focused experience in litigation-risk products and access to capacity such as Zurich North America.
Underwriting notes and timing
Applications are accepted after the dispute is filed and generally up to the first year of litigation. As a case progresses, premiums may increase and the ability to obtain coverage can decrease, so earlier submissions are preferred. The primary policy exclusion is court-sanctioned conduct; arbitration filings are not eligible unless the case is filed in court and later compelled to arbitration.
Minimum premium: Varies — underwriting will provide an indication once the facts of the dispute and coverage limits are known.
Territories and availability
Monarch E&S places CLI in the following states: AZ, CA, HI, NV, TX. Placement is non-admitted / E&S in scope for the available territories — confirm availability with Monarch’s underwriting before submitting.
Why place CLI with Monarch E&S Insurance
Specialized underwriting: Monarch focuses on litigation-fee risk with program forms for plaintiffs and defendants.
Market access: Capacity relationships that include carriers such as Zurich North America help deliver competitive terms where eligible.
Practical submission guidance: Monarch’s team evaluates case posture and timing to advise on insurability and likely premium impact.
Example scenarios you might submit: a regional manufacturer facing a contract suit that contains a prevailing-party clause, or a software licensor defending against a breach claim where statutory fee shifting may apply. In both cases, CLI can limit the insured’s exposure to an adverse fee award.
For CLI placements, contact Monarch E&S Insurance to discuss appetite, required submission materials, and next steps.
Frequently Asked Questions
What types of accounts are a good fit for Monarch E&S’s CLI program?Commercial disputes that include prevailing-party provisions or where state fee-shifting statutes apply. Typical fits are vendor contracts, distribution agreements, construction subcontracts, and technology/license contracts for mid-size and larger businesses.
When should I submit a CLI application?Ideally soon after the dispute is filed and within the first year of litigation. Earlier submissions increase the chance of securing coverage and help avoid premium escalation as the case progresses.
Does CLI cover arbitration or settled cases?No. CLI does not cover matters filed initially in arbitration. Also, settlements, voluntary dismissals, defaults, or stipulations that do not result in a court-awarded fee judgment are not covered.
What information does Monarch need to evaluate a submission?Underwriters typically request the complaint and answer, the contract(s) at issue showing any prevailing-party provision, a case status update, and any key motions or rulings to date. Monarch will confirm detailed requirements when you call or submit.
Need help placing an account? Connect with a market specialist.