Protecting intellectual property (IP) is just as important as tangible assets. IP refers to legal rights for intangible assets. Examples include:
A logo or company symbol.
A recipe, formula, or process.
Original lyrics, poem, speech, etc.
Utility, plant, or design patents (i.e., pharmaceutical patents).
This coverage protects companies with patents from lawsuits, including patent or trademark infringement.
Intellectual property refers to patents, trademarks, copyrights, trade secrets, and more. Items such as Coca-Cola’s formula and the Nike Swoosh must be safeguarded. IP litigation is costly because of its worth. Infringement claims can exceed $3 million.
Intellectual property insurance helps companies in various industries. But businesses with the these exposures often get the most from IP coverage:
Check your policy to see what’s covered by your intellectual property insurance. Here’s what’s usually covered and what’s not.
This protects companies from liability for copyright or other intellectual property infringement, covering legal costs and settlements.
If you own patents, copyrights, or trademarks, your insurance can help you be proactive. With approval from the underwriter, your policy can fund litigation against those who infringe on your intellectual property, allowing you to recover lost income from the infringement.
Patent insurance covers intellectual property, such as patents and copyrights. Not all policies cover patent lawsuits.
Here’s a claim example that illustrates what Intellectual Property Insurance covers:
Nintendo was sued by iLife for supposedly stealing their accelerometer technology, which they said was utilized to create the Wii Remote. iLife held the rights to this technology through a patent and requested $144M in damages for the 36 million Wii gaming systems sold. The jury agreed on a $10M award for iLife, which was upheld on appeal.
Protecting your intellectual property starts with recognizing its worth. Previously, companies primarily valued tangible assets like buildings and equipment, but priorities have shifted.
Technology has changed every industry, making intangible assets like IP now comprise up to 80% of a company’s balance sheet. But this also alters a business’s risk landscape.
Companies must protect their digital assets beyond media liability policies. While a commercial general liability policy may cover various losses, it may exclude intellectual property infringement and trademark infringement cases.
Insurance companies now use a combination of policies, including IP insurance and cyber liability insurance, for better protection. However, risk management goes beyond insurance. Leaders must determine industry-specific best practices to effectively manage IP insurance policies and risks.
Cyber insurance has limits like other policies and doesn’t cover certain claims, including:
Be aware of gaps in your insurance policies when it comes to cyber-related losses. Lawsuits may include claims that aren’t covered by non-cyber policies. Consult a trusted commercial insurance broker to make sure you have adequate coverage.
The price of IP insurance depends on location, past claims, and policy limits. Insurance carriers also consider other factors when determining premiums.
IP insurance cost varies depending on company size, developmental stage, and other factors.
Shoot us your email and we’ll kick off a conversation to help get you a quote on the best coverage for your brand.