Insuring Intellectual Property Basics
In any fiercely competitive market, it becomes a top priority for any company to protect its assets. As many businesses extend and continue to extend into the digital realm and make themselves known to significantly larger audiences, it also brings its risks. For many businesses, their intellectual property (IP) is their livelihood and to have it compromised in any way can be devastating.
A good defensive strategy companies can take is IP insurance. IP insurance is a burgeoning industry. More and more companies are becoming more aggressive in the protection of their IPs. IP insurance can potentially save companies in the event of litigation and prove to be a valuable resource. According to the Intellectual Property Insurance Services Corporation (IPISC) the average patent lawsuit runs $2.8 million and that’s just the cost of the litigation not including the cost of the final judgment or settlement.
What is Intellectual Property Insurance?
Intellectual property insurance is basically what it sounds like, but more specialized. As you can protect your car, health, and home, you can extend protection to copyrights, patents, trademarks and trade secrets. With two primary types of IP insurance at your disposal, it’s becoming easier to protect your business’s assets.
- First, there’s abatement insurance. This type of IP insurance is designed to enforce your patents or trademarks. It protects the insurer against alleged infringers.
- Second is defense insurance. This insurance covers you in the event you or your business is accused of IP infringement.
It should be noted that neither type covers preexisting litigation or infringement.
Why Should You Insure You Intellectual Property?
It comes down to money, pure and simple. Everyone knows lawsuits are expensive and in many cases ridiculously so. A lawsuit against your IP can be incredibly destructive and cost you big. After factoring in attorney fees and any additional legal fees, you’ll be looking at a massive bill.
For larger companies such as Apple, these costs tend to be negligible in the big picture. If you’re a small business with a couple dozen employees, a lawsuit against you can put those employees out of work, halt further sales of your product, and your business on the auction block.
Where to Find Intellectual Property Insurance?
To protect your IPs against those ready to pounce, there are significant resources at your fingertips. It’s always the cheapest option to search the internet. Build a strategy and know what you need to protect. Figure out what type of insurance you’re looking for. Do you just need defensive insurance? Are you developing a product that may be perceived as similar to a competitor’s? Or alternatively, do you have a fantastic idea you’re ready to share with the world, but are concerned someone may repurpose it for their own gain? It’s a common concern, but with the right protection, simple to overcome.
Once you know what you’re what you need, research IP insurance providers. There are many out there ready to provide assistance. See who’s reputable, get quotes, and ask questions.
About the Author
Kevin Kerridge is the Director of small business insurance at Hiscox, a global insurance company with 100+ years’ experience.