It is considered a matter of course to all businesses to have their assets insured. Insurance is a standard form of risk management that helps minimize the damage that businesses incur when their assets are compromised by fire, theft, or other occurrences. One of the policies that companies take, especially manufacturing companies are intellectual property insurance (IPI) packages.
What protection do IPI offer?
Intellectual property insurance offers protection to businesses against a wide range of perils. The best policy in an intellectual property line is one that allows a business to defend its claim on its intellectual property rights. Intellectual insurance offers coverage for loss incurred during legal proceedings.
A couple of scenarios that bring to light protection offered by intellectual insurance includes an application for patent or trademark. There might be cases where a business will propose to have a product patented, only to find that its application is declared invalid. Intellectual insurance will pay for the cost of legal entanglements that will very likely follow. The same thing applies to trademarks. IPI covers losses arising from the declaration of non-infringement of a trademark by a competitor.
IPI policies also extend their coverage to include the right to defend claims relating to beaches of a third-party-owned patent. In addition, intellectual insurance also covers copyright infringements and the like. Even such “hazy” copyright infringement scenarios as when a third party misleads the public by making their product appear like that of another business can be defended through IPI.
Intellectual property insurance aims at ensuring that any claim or legal proceedings can be defended. However these claims or legal proceedings may have been accomplished – whether the threat was direct or indirect – property insurance can cover the company’s losses.
How intellectual property insurance works in practice
Some intellectual property insurance products only charge premium if the insured wins during the legal proceedings. This means that an unsuccessful legal action provided by IPI companies will require no penalty costs to the policyholder. However, if the legal claim is successful, the intellectual insurance policyholder will receive many benefits. These benefits offered by intellectual property insurance include having the policyholder pay the premium, which is only a part of the total monetary benefit.
Intellectual property insurance is only available to businesses when there is a good chance of success in legal action. Intellectual insurance companies will assess the merits of a legal proceeding before offering intellectual insurance to their clients.