07 Aug What is an ATE premium?
If you’re looking into After The Event insurance, it’s important that you know all of the details before you take the leap and select a policy. It’s regularly the case that your lawyer or solicitor offers this kind of cover as a part of their services, but there are elements that it is worthwhile knowing about all the same – for example, the types of ATE premium that are available. This can make a significant difference to the amount you will be paying, and when these payments will need to be made. The specialists at Prosperity Insurance Brokers have lengthy experience working with numerous different ATE policies. This is their guide to the various policies you could select when obtaining this kind of insurance.
What is After The Event Insurance?
Also known as ATE insurance, an After The Event policy provides cover either for claimants or defendants who are due to appear in court. Usually, a policy of this kind needs to come into effect before any legal costs have been incurred, as ATE insurance is designed to help recover those costs and does not often work in retrospect. “The Event” refers to the incident or behaviour that prompted the court case, not any element of the case itself.
What Kind of ATE Premiums Are Available?
An insurance premium is an amount to be paid for a contract of insurance. There are a number of options available when it comes to After The Event insurance, including Staged Premiums, Fixed Premiums and a Percentage of Damages. Let’s take a look at those in further detail.
Staged Premium: With a Staged Premium, the rate builds as the court case progresses. Similarly to a “pay as you go” mobile phone contract, your premium will go up the longer it takes for the matter to be settled – which could mean that you incur fairly significant costs. If the costs you are looking to cover are accrued pre-issue, it’s usually the case that you’ll be charged lower than 10% of the final amount of cover you intend to seek. For post-issue matters, you’ll usually be paying between 25% and 60% of that cover, though this depends on how long it takes for the matter to be settled in court.
Fixed Premium: Here, you pay a set amount – no matter the stage at which the court case is settled. This can prove somewhat risky if the issue brought before the court is extremely complex; you may wish to claim £100,000 of cover for your costs, and for this – with a Fixed Premium – you’ll probably have to pay somewhere around £35,0000. If the case is a lengthy one, this means that you’ll be paying a much lower premium than you would if you chose a Staged option and the case dragged on. However, if matters are settled much more quickly than expected, you could possibly find that you have overpaid.
Percentage of Damages: This type of premium does pretty much what it says on the tin. It can come in either staged or fixed form too, but it’s often favoured for those involved in specific types of case, as it means that the figure you are likely to have to pay can be calculated depending on the size of the rate of damages, and can be easy to work out as the case goes on.
When Do I Pay?
There are also a variety of options when it comes to payment dates. It’s best that you discuss these with your chosen insurers when you first acquire this insurance. Here are the possible choices:
In full, up front: If you wish to get it out of the way, you are more than welcome to pay a lump sum at the start. However, it can be hard to predict whether this sum will correctly cover all it needs to, and you could end up paying more than would be required.
After settlement: You can agree with your insurers to only pay once a case is settled. This opens up the possibility of a no win, no fee agreement.
In stages: Many people choose to pay an amount up front as a deposit – most often of around 10% – 20% – with the rest added later following a favourable settlement. Similarly to the “after settlement” option, this helps to prevent any overpayment.
Premiums differ between cases and from insurer to insurer. If you want to discuss your specific requirements, all you need to do is get in touch with Prosperity Insurance Brokers today on 01481 254954 or email email@example.com, and the experienced team will get back to you as quickly as possible to help you understand what your options are.