We recently blogged our guide to intellectual property insurance looking at the reasons why it’s important that you take steps to protect your intellectual property, including giving consideration to intellectual property insurance. Here we consider what types of intellectual property insurance are available in the UK market.
Intellectual property insurance can cover a wide range of areas from defence of a claim against you through to pursuit, business interruption and insurance that can be purchased after the event.
Legal Defence Costs
These policies will provide the policyholder with cover for defending an alleged IP infringement court action that is made against them. It will also cover them for any court awards that are made against them as a result of the action. This is typically the minimum level of cover purchased
Pursuit and enforcement
This policy will cover the legal costs of pursuing a Third Party that is alleged to have infringed upon the policyholders IP. This cover will only cover the legal costs and not damages etc. Cover can also be added that can provide cover for ‘discovery costs’ effectively helping the insured to work out if a third party is breaching their IP.
Pursuit and Defence
The two types of intellectual property insurance policies can be purchased together and will typically provide the benefits of both of the above types of policy, allowing the insured to protect themselves not only if their IP is infringed but also if they are on the receiving end of IP action. Such policies will typically provide cover for both legal costs and damages.
Breach of an agreement, such as non-payment of milestones or royalties
Breach of a contractual agreement can be a significant event to many businesses. It is therefore possible to insure against these risks with Agreement cover. This can cover both the pursuit of a claim against someone who has breached an agreement and equally the defence of a breach of agreement claim brought against the insured.
Business Interruption / R&D costs following an injunction
These policies can be of particular importance to new businesses and start-ups whose success relies on the commercialisation of their IP or existing companies who are looking to develop and invest heavily in new IP. Given the investment and financial commitment involved in such scenarios any accusations of IP infringement or court action from a third party can have a significant impact on the business viability.
As a result, this type of policy will typically indemnify the insured for any losses, committed development costs and future income following a successful claim for IP infringement brought by a Third Party.
After the event (ATE) cover
This is cover which can be purchased if you do not have other types of intellectual property insurance in place but find yourself in an intellectual property dispute. However, in order to obtain this type of cover you must typically have at least at 60% chance of winning the case and the damages being sought must be high enough to allow for the risks that the insurer will be taking.
If you are reviewing your insurance products or are a new start up looking at what insurance you need to put in place then get in touch with us at Anthony Jones today. As a member of IPAN (Intellectual Property Awareness Network). We are passionate about helping you protect your business and can work with you to identify the right insurance for your individual needs.
