Insurance is intended to act as a safety net for the wellbeing of individuals and organisations. In light of this, many coverage’s, such as employers’ liability or Professional Indemnity, have become standard purchases for businesses.
Although intellectual property (IP) is crucial to the existence of most organisations in the same way customers and staff are, insurance of IP is often ignored and very rarely part of a business’ risk management portfolio.
Why is this the case? Well, in my opinion, many businesses aren’t aware of the support they are able to obtain from the insurance market to assist them with their IP exposures. A number of Lloyd’s syndicates and insuring bodies are providing insurance policies that include IP, patent and contractual rights defence and pursuit expenses, costs and obligations to support businesses that are accused of infringement, or that face the prospect of losing out to copies of their offerings. Insurers in the space are aware that failing to insure something that you and your business have spent time, energy and money to develop can cost your business a substantial amount. Legal costs can be very high whether your business is at fault or not, and without adequate consideration, can threaten your organisation’s solvency.
Common examples of IP infringement disputes include patented components of Apple’s iPhones being utilised in Samsung phones, or counterfeit versions of manufacturer’s castings or materials that are protected under law. Although not as obvious to businesses that may not face a tangible product exposure, such as tech designers and engineers, the exposure is just as notable. If software solutions, inventory models or design plans are copied, client relationships can be lost as can the ability to generate future income.
With premiums starting from as little as £3,000 in the UK and offerings protecting businesses for up to 12 months of non-trading in the event of a dispute, businesses should consider adding IP insurance to their portfolio of risk management tools.