As the Global Economy continues to shift from a manufacturing-based economy to an information-based economy, the role of Intellectual Property (IP) has become increasingly important within the operational structures of big and small businesses across America, and beyond. However, many businesses are relatively inexperienced when it comes to Intellectual Property Coverage and the legal issues that surround it. The same can be said for Insurance agents, who have been slow to develop policies in light of emerging IT-related risks.
While Intellectual Property Insurance is something of a recent trend, the seismic shift from manufacturing to information will continue long into the future, and Intellectual Property Insurance is something that all businesses need to be aware of, whether you’re a small or big business owner, or even an insurer.
What is Intellectual Property?
Intellectual Property Insurance coverage protects companies for copyright, trademark and patent infringement claims. Once you have completed an intellectual property search and filed registration for a trademark, service mark, copyright or patent, you will be able to insure your intellectual property in order to manage and prepare for the risk of a competitor suing you for infringing on an idea or intellectual property belonging to them or someone else.
Intellectual property typically constitutes anything from an invention to software developments, and with the dawn of the Information Age, coverage for those ideas has become resolute. Many high profile Intellectual property lawsuits have occurred in recent years, most notably Apple’s patent infringement litigation with Samsung, regarding the design of smart-phones and tablet computers. Earlier this summer, Samsung won a limited ban from the U.S. International Trade Commission on sales of certain Apple products after the court found Apple had violated a Samsung patent. While this shows the role of Intellectual Property Insurance in the IT sector, IP coverage is something Businesses from all sectors will have to incorporate as Internet commerce continues to grow and those companies find themselves competing to be the first to develop and sell new products and ideas.
How times are changing.
Naturally, Intellectual Property Insurance was not always a high priority for most businesses or insurers in the past. However, that mentality is slowly changing with many insurers moving to fill in the gaps by incorporating intellectual property coverage into business insurance programs. We are now beginning to see media liability, cyber-risk and patent litigation insurance becoming a part of the standard Business Insurance plan on offer to large and small corporations.
Why is IP coverage important for Businesses
Intellectual Property Insurance will pay the costs to defend you if someone tries to claim the rights to the same business model, process, or application that you have developed. Considering the high costs of not only hiring an attorney to defend your organization should a lawsuit arise, but also the financial damage that could be done to your company should you lose the case – not to mention the subsequent reputational damage – it is abhorrently clear that businesses, regardless of the Industry which within they operate, must consult their providers and re-assess their Insurance plan so that it acknowledges the risks of Intellectual Property Management.
Although the insurance industry has been slow to react to the demands of intellectual property growth, IP coverage is becoming an integral part of the business insurance plan. Many carriers are beginning to offer policies catering for Intellectual Property Risk and generalist plans are being expanded. With the market set to continue its rapid growth and demand for Intellectual Property Insurance on the rise, make sure you talk to your broker about how you can improve your current plan.
If you are unsure of how Intellectual Property coverage could help improve your Business Insurance plan, get an expert’s advice for free.