In short, people would take out the insurance right before they commit a crime so they didn't have to pay for their own defense. It doesn't guarantee a verdict, but if you've decided you're going to go to trial anyway, you might as well take out the insurance, and I don't see how the insurance company could survive in that environment, since the principle of insurance is that most people won't need it.
1)>>>In short, people would take out the insurance right before they commit a crime so they didn't have to pay for their own defense.
2)>>>I don't see how the insurance company could survive in that environment, since the principle of insurance is that most people won't need it.
Point 1:
Require the insurance to be delayed: you must pay into the insurance for X number of years before it can be used. In this case, "right before they commit a crime" will end up being long enough to recoup the costs of the defense. An actuary can help find what number of years is needed for the specific business.
Point 2: All insurance companies are faced with the challenge of survival. They often overcome this challenge by increasing their pool of customers: "most people won't need it" and are profit centers, the few who do need it are the cost centers. Again, actuaries are the folks to call.
