Insuring intellectual property can be complicated and expensive. This initial investment in the right policy for the specific needs can pay for itself. Here are a few things to think about when contemplating whether the hassle to obtain insurance for your IP is worth the effort:


1. Helps Offset the Costs of Defense


A lot of hard work goes into creating the item or work that is protected with registration. Often, these items are the most valuable assets of the company. Trolls and competitors see the value and might infringe. The cost of defending the IP can be more than what went into development. Intellectual property insurance policies vary, but they may help with:


  • Protection from false advertising;
  • Compensation for loss of IP value;or
  • Offset litigation costs or damages.


Defending the IP gets expensive quickly. You may have to jump through a few extra hoops to get coverage, but it could be worth it in the long term.


2. Get the Right Type of Policy


Each carrier provides different options and companies should closely review their policies before adding or dropping coverage. Often, umbrella or standard liability policies will not cover intellectual property. Here are some types of policies to look for when shopping for the right policy for your intellectual property:


  • Commercial General Liability (CGL) Policy. This is a narrow type of coverage that often protects copyright, privacy, libel, and advertising or style of doing business.
  • Errors and Omissions (E&O) Policy.  This can be tailored to an industry and type of IP. Some carriers refer to this type of policy as miscellaneous professional liability (MPL).


3. Shop Smart


States regulate insurance and the laws can vary significantly across borders. As a result, many companies work with a retail insurance broker.  In turn, retail brokers often work with managing general agencies (MGA’s) or wholesale brokers to find the appropriate insurance.  The complexities of policies, mobile IP, and multi-state or international sales of the IP can make buying coverage complicated quickly. No one wants to invest in a policy only to find it does not cover what was intended. This can be avoided if you consult with an experienced broker and an attorney to help verify coverage and navigate any complexities of your particular IP.