We have completed our annual review of the insurance markets that offer coverage for Intellectual Property risks and/or Media Liability risks. The 2 are combined into a single Report because of the significant amount of overlap in the respective coverages.
We have been writing about IP insurance since the mid-1990s, and continue to be enthused about its potential to cover valuable assets and exposures to lawsuits that are not covered elsewhere. Media Liability was added more recently (2010) as we found fewer markets in the IP segment, but options for coverage could be found in the media products line.
The market has not been as enthusiastic about IP coverage as I am (especially patent infringement coverage), although progress is being made. Brokers tell me that the reasons for IP coverage not being more widely purchased is a combination of:
- Lack of knowledge or understanding by the potential insureds and their insurance agents/brokers,
- Cost (whether real or perceived),
- Insureds think they already have coverage (in other policies), and
- Objections from legal counsel, who doesn’t want an insurer involved in the defense
I suspect these reasons are legitimate, and would add “too much work for too few sales” as an explanation of why more Patent Infringement isn’t bought.
Media Liability, on the other hand, is more easily understood and valued (even if the risk is less catastrophic for most), particularly considering the interest in liabilities arising out of social media. This coverage is now available as an add-on to a wide variety of policies, including Management Liability, Tech E&O, Cyber/Privacy, and others (including BOP-type packages).
- We have added Liberty International to the IP coverage section
- Hiscox as well as OneBeacon are now included in the Media Liability section
- We removed XL from the Media section, as they mostly offer this coverage as an add-on to other products, such as Tech E&O
Next issue (June): Cyber/Privacy Market Survey 2012