You may not even be aware of a critical breech in your general liability coverage. But you’re not alone. Many businesses carry little to no intellectual property infringement coverage, when, in fact, they would be wise to do so.
Over the past decade or so, there has been a growing trend by many insurers to dramatically reduce coverage for advertising injury in general liability policies. In addition, newer policy forms exclude coverage for trademark and patent infringement claims altogether.
The common misconception is that this coverage applies primarily to the publishing industry. But, if your business has any involvement with media, technology, or both, you may need to conduct a risk audit to uncover exposure to potential intellectual property infringement claims.
Does your business need intellectual property insurance?
Businesses which might be exposed include:
- Publishing companies
- Companies which mimic a popular brand slogan or name in their own advertising
- Companies involved in e-commerce
- Any company which has a web presence
- Media companies which specialize in advertising, publishing, broadcasting, photography and similar related professions
Types of insurance
Depending on your exposure, available coverage options include:
- Intellectual property insurance which is a more encompassing form of insurance to enforce your patents and also extends coverage to copyrights and trademarks.
- Patent insurance to protect holders of patents from patent infringement losses.
- Liability insurance for patent infringement to protect sellers, manufacturers and also users when a claim is brought against them for alleged infringement of patents.
- Specialized media liability insurance for any company which specializes in any media format.
- Advertising injury insurance to cover any potential claims that stem from advertising campaigns. An advertising injury is any statement made in advertising that causes loss to another person or entity.
Types of coverage
There are generally three types of intellectual property insurance coverage currently available which include:
- Legal defense only which will provide coverage for the costs of legal defense but nothing for any awarded damages.
- Indemnity and legal defense which pays for both legal defense costs and any awarded damages.
- Enforcement coverageto pay for any legal costs to pursue an intellectual property infringement claim against a third party.
To qualify for intellectual property insurance you may be required to show that you have performed an Intellectual Property Search or have registered for a patent, copyright, or trademark.
Intellectual property is specialized insurance coverage. Premium differences for any form of intellectual property infringement coverage vastly differ so carefully examine what each policy covers and excludes. You may need to consult with both your insurance broker and your legal counsel to limit your risk exposure.