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Business Classes
Intellectual Property Rights Insurance
The intangible element of either your business or your new investment may well be dependent on the enforceability of your Intellectual Property (IP) rights. As IP rights are not ‘policed’, it is down to you to enforce your rights or defend yourself against actual or alleged infringements of third party IP rights. Both of these procedures can be prohibitively expensive, irrespective of any additional damages awards.
Insured exposures
- Agreement Claims
Pursuit and Defence costs (and Damages if required for defence claims) for breaches of those agreements into which you have entered, for the exploitation of IP. Examples of these include licence, confidentiality/NDA and collaboration agreements. For licence agreements, cover includes the IP indemnities given by the insured licensor (most likely the IP owner) to its licensees. This way, in the event that one of these licensees is cited for an actual or alleged infringement of a third party’s IP rights through the normal operation of the licence agreement, the policy will respond as if the licensee were a named insured under the IP policy.
- Defence Claims
Defence Costs (and damages if required) for:
- an action being brought against you for actual or alleged infringement of a third party’s IP, or:
- challenges to the validity of your IP.
- Pursuit Claims
Pursuit (enforcement) costs for actions brought by you against a third party for infringement of your IP.
Territories
Cover can extend to include worldwide jurisdiction (court actions) however does not cover US domiciled entities unless an incidental insured entity within an overall schedule.
Premiums/limits
Minimal annual premiums are in the region of £17,500 for a limit of £500,000 and £25,000 for a limit of £1,000,000, or equivalent currencies. Limits are typically between £1,000,000 and £2,500,000 however increasingly there is demand for limits of £5,000,000 and above.
Industry sectors/process
As with most insurance protections, the risk profile of each industry sector will differ. With this in mind, ‘higher risk’ categories for example software/high tech, pharmaceutical/biotech, may require a brief survey in addition to the normal application information. It should also be noted that there is a material declinature rate in the ‘higher risk’ categories.
Although such a survey would be at the expense of the proposer, insurers would in advance of any survey have indicated the likely terms of the insurance, such indication to include an agreement to refund the cost of the survey in part or whole through a corresponding reduction in the first year’s premium. Surveys are typically in the region of £3,000-£5,000 however the need for a survey is very rare outside these industry sectors.