Claims Direct has announced the completion of an underwriting agreement with Isle of Man Assurance Limited (IOMA).
Under the agreement, the personal injury claims specialist will market LitigationPlan, IOMA's after the event (ATE) legal expenses insurance policy.
This will enable Claims Direct to offer clients two levels of policy based on the type of accident involved in their personal injury claim.
The LitigationPlan policy indemnifies clients in respect of their costs and disbursements incurred should their case be unsuccessful, up to a limit of £50,000.
Each ATE policy will be acquired on Claims Direct clients' behalf by their solicitor as a disbursement of running their case, thereby removing the need for clients to take out a loan to purchase the policy. The company believes this will be a unique selling point.
In the case of a road traffic accident personal injury claim, the insurance premium will be £500 plus Insurance Premium Tax of 5%. For other personal injury claims, such as accidents, the premium will be £950 plus IPT.
Claims Direct said the two-tier premium more accurately reflects the ever-evolving ATE market and differs from its original business model which was based on a both sides costs policy.
Chief executive Ronnie Henderson commented: "This agreement is another important step forward in implementing our new business model. It allows us to reduce the cost to our clients of pursuing their personal injury claims in order that they will retain a significant proportion of their damages whether or not the issue of premium recoverability is resolved.
"The launch of the new business model, as represented by changes such as these new underwriting arrangements, is building the platform from which we can re-establish Claims Direct's business and restore its profitability and reputation."
The agreement has immediate effect.
