Mosaic Insurance, the Bermudian-based global specialty insurer, has launched litigation liability coverage, offering what it says is critical financial protection to policyholders against the risk of adverse legal costs when pursuing litigation or arbitration.

Experienced litigation solicitor Sarah Bowden has joined Mosaic’s professional liability division to lead the product, also known as “after the event” insurance.

The coverage facilitates the pursuit of litigation or arbitration by protecting claimants against the risk of having to pay opponents’ legal costs if their claims are unsuccessful.

Clients benefiting from the product can range from individuals and small businesses to multinational corporations and litigation funders.

“We’re delighted to welcome Sarah to Mosaic and know her background in this sector aligns well with Mosaic’s appetite for complex specialty business requiring deep expertise,” said Anna Jay, head of professional liability for Mosaic.

“This class has high technical barriers to entry and strong underlying demand, so it provides the opportunity for us to demonstrate value to clients, brokers and our syndicated trade-capital partners.”

Mosaic said the commercial ATE market has grown considerably in recent years, yet is still considered a nascent line of business. Typical coverage includes breach of contract claims, insolvency litigation, group actions/class claims and competition claims.

Ms Bowden said: “It’s normal to experience a rise in litigation following economic turmoil, and this is inevitable in the wake of the significant disruption we have experienced over the last few years.”

Periods of financial distress characteristically lead to increased instances of non-performance of contract obligations, failure to comply with contractual obligations and claims by investors who may have been misled over performance, she noted.

Ms Bowden added: “We also know that, unfortunately, insolvencies and liquidations are on the rise, affecting industries across the board. We expect this to fuel increased demand for litigation liability insurance, as liquidators look to recover assets while minimising their exposure to the risk of adverse costs.

“Other themes we can expect to see over the longer term are an increase in crypto-related litigation and concerns over ESG issues. Since individuals were able to exploit changes in working practices and procedures at the height of the pandemic, we may also see an increase in civil fraud claims.”

Ms Bowden previously practised as a litigator for 17 years, latterly at Mills & Reeve, London.

She specialised in complex and high-value litigation disputes, defending claims against solicitors, actuaries, accountants, pension trustees, stockbrokers, IT consultants, construction professionals, medical practitioners and contract research organisations.