Intellectual Property Insurance capacity – Patent Infringement

When we conducted our Intellectual Property Insurance Market Survey for our April issue, we found 4 sources of Patent Infringement coverage:

  • Chartis, with $1 million up to $25 million
  • Intellectual Property Insurance Services (IPISC), $250,000 up to $10 million,
  • Samian, £250,000 up to £10 million, with excess available, and
  • ThinkRisk (for design patent), $10 million

I wonder how often these limits are actually offered (sometimes carriers claim capacity that is rarely offered)?

More importantly, why isn’t more of this insurance purchased.  Too complicated?  Not well known?  Not well understood?

Comments are welcome.


4 responses to “Intellectual Property Insurance capacity – Patent Infringement

  1. With respects to Defensive IP cover, the construction of the forms and the intensive and confusing underwriting process are stumbling blocks to purchase. The underwriting process is cumbersome and with some carriers, involves a cost just to determine if the product is insurable. Once the policy is purchased, if it is determined at the time of a loss that the product was infringing when the original underwriting took place, the carrier can decline the claim. Then take into account the co-insurance clauses, large retentions, and (in some instances) waiting periods. . one can see why these policies are less attractive to a sophisticated prospect. Typically when IP Defense coverage is purchased it is due to contractual requirement and often paid via a pass through to the client.

  2. Also remember that a patent infringement law suite can be a David-versus-Goliath confrontation. Defendants in patent infringement lawsuits are usually large corporations with unlimited resources, while plaintiffs in patent infringement lawsuits are often individuals or small businesses with very limited resources.

  3. An excellent point, Jared. One of the key selling points for intellectual property insurance is that it can help a small company survive an attack by larger companies with deep pockets. I have heard that IP insurance is often purchased because venture capital investors have insisted upon it.

    Thank you for an excellent comment.

  4. This is such a great post! Very brilliant ideas about patent. I have acquired new ideas with these information.

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