Intellectual Property Insurance: Safeguarding Your Innovations

Written By Charlotte Insurance on April 15, 2024. It has 0 comments.

an intellectual property insurance policy

Creating something that makes your business run more efficiently is always a good thing, especially where profitability is concerned. However, what happens when someone claims that your new invention infringes on their patent? And even if they haven’t patented the item, what if they state that they invented it first, hire a lawyer, and file a lawsuit? In this situation, you could be responsible for legal fees and numerous other out-of-pocket expenses, leaving your business in financial jeopardy.

What can you do to protect yourself? This is where intellectual property insurance comes into play.

What is Intellectual Property Insurance?

As a business owner, you’re no doubt familiar with the idea of liability insurance. Intellectual property insurance falls into this category. The policy is in place to provide your business with protection against intellectual property claims.

How would this work? Let’s say that your company has invented an innovative device that helps people track their steps during the day. Unlike similar devices, yours is incredibly accurate and contains proprietary information that your employees created. Once your product goes on the market, another business speaks up, claiming that they invented the product first and that your creation infringes on their patent or copyright. They file a lawsuit. At this point, you hopefully have intellectual property insurance to help you with the legal costs and expenses necessary to respond to their claims.

What Does Intellectual Property Insurance Cover?

If your company has an intellectual property insurance policy in place, then you don’t have as much to worry about when these lawsuits get filed. Yes, you still have to do some reputation management with the press, but most of your costs related to the lawsuit will be covered. For example, a standard intellectual property insurance policy provides coverage for:

  • Settlements or Judgements – If you decide to settle the case by providing the other company with an agreed upon amount of money and copyright permissions, your insurance will more than likely pay for the costs. In addition, things like judgements, should the claim go to court and is ruled in the other company’s favor, may be covered by your insurance policy as well.
  • Attorney Costs – An attorney is not cheap, especially when you end up having to work out a settlement or end up in court defending your invention. Rather than having to pay for these costs out of pocket, your insurance may foot the bill.
  • Defense Costs – Mounting a legal defense can be expensive, thanks to the amount of discovery involved. Talking to your employees, sifting through paperwork, and more all consume your lawyer’s time, which is billed by the hour. Thankfully, in many cases, your insurance will cover these costs as well.

Another Side to the Story

In addition to providing coverage when your business is accused of patent infringement or copyright theft, an intellectual property insurance policy also helps pay for the costs of a lawsuit and filing when you’re the accuser, should another company infringe on your own patent.

Have Questions? Contact Charlotte Insurance

Want to learn more about intellectual property insurance? Contact Charlotte Insurance. Our agents can explore and explain all available options and put together the insurance coverage plan your business needs.

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