Why do you need Intellectual Property Insurance?
1. You build things, write code, create a product or offer a service that could be infringing on existing intellectual property rights
2. You have your own IP that you need to protect
Companies concerned about being accused of IP infringement worry about the thousands of suits filed each year in response to perceived IP infringement. Between real innovators and patent trolls, there are too many unknowns that have the power to disrupt your business.
A judgment against you in one of these cases could lead to you paying your competitor for their lost profit, signing unfavorable licensing agreements or forfeiting your rights to sell the product altogether. There will be PR and investor relations costs that are difficult to predict.
And we haven’t even begun to talk about legal fees, administrative costs and the years it could take to settle the case. Even if the complaint is borderline frivolous, you’ll still have to pay a lawyer to respond and defend you.
For innovative companies that actually hold patents for things they’ve created, protecting this property is the primary concern. Insurance can help here too. The costs of enforcing intellectual property rights in court can be burdensome and carriers are willing to take this process over for their policyholders.
Patent lawsuits can cost between $950,000 and $3,100,000 depending on how far the trial goes and the revenue at stake.
It should come as no surprise, then, that intellectual property insurance (or patent insurance) has stepped in to address this risk for businesses both big and small.
Whether you own the IP or are being accused of infringing, lawsuits can cost millions of dollars. IP insurance gives you an expert partner and pays the costs of these suits so that you can focus on running your business.
What is Intellectual Property Insurance?
For companies that could be accused of infringement. This provides money for defense costs and any judgments/settlements against you if you’re held liable for infringing on a patent, trademark, copyright or other form of intellectual property.
For companies that own patents, copyrights and trademarks. This lets you go on the offensive with the help of your insurance carrier. With the underwriter’s go-ahead, the policy will fund the litigation against the guilty party and allow you to recoup income you’ve lost as a result of the infringement.
Intellectual property insurance provides capital for legal expenses if you find yourself involved in covered IP litigation.
In the case of defense policies, it helps pay for any judgment or settlement rendered against you. Enforcement policies let you work with the carrier to actually enforce your own patents. With the underwriters’ permission, you could sue the infringer and then be reimbursed for your legal costs.
Many carriers take a proactive approach and help their insureds as much as possible. These carriers will (for a fee) conduct a full analysis of your IP risk relative to your industry and provide you a report prior to issuing their insurance quote. This serves the dual purpose of letting the underwriter assess their potential exposure while also educating policyholders to make sure they know how to operate safely in their space.
IP litigation is one of the most common claims out there and is far more likely to occur than even D&O claims. Between “patent trolls“, who amass huge libraries of IP and true innovators who want to protect their businesses, there’s no shortage of conflict. Patent courts have found relief in the past few years with numbers of filed actions declining, but it’s still important to remain vigilant: we’re still in the middle of an explosion of patent litigation compared to past decades.
The data suggests businesses need to have a healthy respect for this risk and do whatever they can to manage it. Intellectual property insurance gives you access to IP experts who know the space inside-and-out, it gives you the peace of mind of a financial safety net and it puts a massive financial institution in your corner that has a lot of weight to throw around if you’re targeted by either an infringer or an IP holder.
What is Patent Insurance?
Patent insurance is a type of intellectual property insurance coverage. An IP insurance policy can include coverage for patents, copyrights and other specific types of IP. The phrases “Intellectual Property insurance” and “Patent insurance” are sometimes used interchangeably, but not all IP insurance policies include coverage for patents.
Learn more about Intellectual Property Insurance
Who doesn’t love video games? Okay, they might not be everybody’s thing but it’s also hard not to be impressed by how powerful the technologyRead More
Too many companies ignore one of the most common legal risks out there: intellectual property (IP) infringement. In past posts, we’ve talked about the highRead More
Rest easy…your fintech insurance answers live here It is not a secret that the fintech industry has experienced significant growth over the course of theRead More
How it Works
Thoroughly enjoy working with the entire Founder Shield team. They not only took care of our insurance needs in a stress-free manner, but creatively structured solutions unique to our business model that has helped us continue to scale and grow
Great mix of old-school customer service with awesome use of technology to make the process as seamless as possible.
The Founder Shield team is undeniable a wonderful and very support partner. Not only are they 100% devoted to your company and insuring compliance, but they also provide continuous guidance as we are not experts in the insurance field. They work around the clock collaboratively and we appreciate all that they do for us.
Great service - proactive, responsive, go beyond what I have expected from previous providers. The team do a wonderful job
I've been a client of Founder Shield's for four years now, and I haven't had a single complaint. They are light years ahead of the big brokerages, and simply a pleasure to work with.
Excellent customer service. Knowledgeable team that is collaborative and helpful.
Awesome service - knowledgeable and extremely responsive. Our account executives are brilliant and we could not ask for a better service from them.
The quality of service is excellent. I was impressed with their expertise, understanding VC backed companies' needs and lightening fast responses.
Make insurances possible that we probably could not get from a traditional provider/broker. Only know of a few real alternatives to Founder Shield, for startups, and the ones I know were not responsive to my requests.
Fast and attentive service. Always there to help with my questions and make sure we get the right coverage. Highly recommend!
Working with Founder Shield makes managing insurance fun! The team is super hands-on, incredibly customer-centric and always a delight to work with. Additionally, their platform makes the renewal process super efficient and seamless. The team feels like an extension of our own, always keeping an eye out for our company’s best interests. I can’t recommend them enough. Thank you!