After The Event (“ATE”) Insurance Protects The Policyholder *After* The Incident Has Taken Place

Overview Of What Is After The Event Insurance

What is after the event insurance? After The Event (“ATE”) Insurance is insurance that you can take out after the event in question has taken place.

It is commonly associated with litigation claims when an insured wants legal costs covered if they were to lose and be ordered to pay the costs of their opponent.

Indeed it is commonly put in place in insolvency litigation when an insolvent estate has an Insolvency Practitioner or Liquidator appointed who brings legal proceedings against the former Directors of a company that has gone into insolvent Liquidation or those who have received assets and property from an individual who has entered bankruptcy.

In view of the nature of contracts of insurance requiring the utmost good faith and the risks arising if there is any material non-disclosure, not only must all contractual clauses be studied in detail and complied with rigorously to ensure that the insured does not overlook its obligations but a wider view needs to be taken as to what an underwriter might consider being additional material disclosure required.

The question of material non-disclosure was considered in the case of Pan Atlantic Insurance Co. Ltd v Pine Top Insurance Co. Ltd [1995] 1 A.C. 501. If a prudent underwriter could show it had been induced to enter into the contract of insurance then the insurer can conceivably avoid the policy.

Even if the insurance premium is more expensive than you would like, it is likely to be a drop in the ocean compared with an insured’s exposure if a policy is avoided by the insurer, so if in any doubt ensure that all material disclosures are made and the insurer is updated at each material stage of the litigation.

Are You Covered By An After The Event Insurance Policy?

Consider if:

  • The Premium is insured as a disbursement under the policy.
  • You are not personally liable for the Premium if you ‘win’.
  • You are not liable for the Premium if you win but fail to recover the damages and or costs.
  • The definition of ‘win’ combines damages/relief with the costs. You cannot ‘win’ by succeeding on any head of claim if you do not have a net overall benefit.
  • The insurer provides cover for interim adverse cost awards.
  • Payment of adverse costs within 14 days of the order by the insurer.
  • The ATE provider offers deeds of indemnity or bonds to cover security for costs.
  • Examples of material non-disclosure are set out in the policy terms.
  • Examples of failure to comply with the CPR are set out in the policy terms.
  • You are covered for indemnity costs.
  • The policy does not have an entire agreement clause.
  • The rejection of a Part 36 offer does not need the insurer’s approval.
  • Split costs decisions are treated on a net basis for the purpose of a ‘win’.

Are you a creditor looking to recover your money?

If you are a creditor of an insolvent company or a bankruptcy, Oliver Elliot can help you address your claim and concerns arising from the insolvency.

Find out how

What Next?

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Disclaimer: What Is After The Event Insurance?

This page: What Is After The Event Insurance? is not legal advice and should not be relied upon as such. This article What Is After The Event Insurance? is provided for information purposes only. You can contact us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.