The Insurance Advantage
Docket insurance, sometimes called portfolio insurance or litigation risk insurance, is a policy that protects against adverse outcomes in your case portfolio. When a lender sees an insured portfolio, they see dramatically reduced risk. And reduced risk means reduced interest rates. We've seen clients achieve rate reductions of 2-5% simply by adding insurance to their existing portfolio, on a $20M facility, that's $400K to $1M in annual interest savings.
How the Math Works
Let's walk through a real example. A mass tort firm with a 500-case docket seeks a $15M credit facility. Without insurance, lenders price the deal at 18% interest, reflecting the inherent uncertainty of mass tort outcomes. The firm obtains a docket insurance policy at a premium of 5% of the facility amount ($750K). With insurance in place, lenders reprice to 14%, a 4% reduction. Annual interest savings: $600K. Net benefit after insurance premium: roughly $600K minus the amortized premium cost. In most scenarios, the insurance pays for itself within the first year.
What Insurers Evaluate
Insurance carriers conduct their own independent evaluation of your portfolio, analyzing case types, litigation stage, historical outcomes for similar cases, defendant financials, and jurisdiction data. This independent validation serves double duty: it gives you a third-party assessment of your portfolio value, and it gives lenders confidence that the risk is well-understood and adequately priced. The underwriting process takes 4-8 weeks and costs $15K-$75K depending on portfolio size and complexity.
Not Every Portfolio Qualifies
Insurance carriers are selective. They look for portfolios with diversified case types, strong historical performance, and reasonable settlement timeline expectations. Single-category portfolios, emerging mass torts without established settlement history, and portfolios with heavy concentration in a single jurisdiction may not qualify. Or may receive limited coverage at higher premiums. Our team can evaluate your portfolio's insurability before you invest in the underwriting process.
Getting Started
The first step is a preliminary portfolio assessment. Tortlink works with multiple insurance carriers and can help determine whether your docket is a good candidate for coverage. If it is, we coordinate the underwriting process, negotiate premium rates, and integrate the insurance into your broader financing strategy. The goal is to present lenders with a fully insured, de-risked portfolio that commands the best possible terms.