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Posts, Articles|July 05, 2022

Protect Your Intellectual Property

By Natalie Sherod
Risk Advisor CPCU, CIC

When you think of insurance, chances are you think about protecting your tangible assets: your building, your car, your property, etc.  But what about your intangible assets?  One of a company’s most valuable assets is its Intellectual Property.  While there is very limited coverage in traditional insurance policies for IP, there are unique policies in the market to protect these very things.  When exploring these types of policies, it is important to understand that there are two distinct coverage offerings:

  • IP Defense Insurance: Companies are always vulnerable to allegations of intellectual property infringement.  This can range from infringing on an actual product, image, or even means of processing or manufacturing.  The defense policy will respond if your business faces these allegations
  • IP Enforcement: Although companies may want to be aggressive when it comes to other companies infringing on their IP, the idea and cost of litigation can be daunting.  This policy will help fund litigation expenses the policyholder would incur if they would like to go after another party.

Both of these policies can be purchased to cover patents, trademarks, copyright, trade dress and trade secrets.  Because these are unique coverage offerings, it is extremely important to understand coverage offerings and limitations.  Most will come with a sizeable retention and larger coinsurance provision than what is seen in more traditional policies.  Pricing will depend on a variety of factors such as types of IP to be protected, industry, limits, etc.

Risk management is all about understanding your exposure to loss and evaluating means of mitigating that exposure.  Exploring IP policies may provide an additional means of managing that risk.

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