For many businesses, their most valuable assets are their intellectual capital comprised of their “hidden assets” such as its people, expertise, intellectual property, and business relationships. For some, their intellectual capital is the “secret sauce” that gives them their competitive edge. If the recipe is lost or stolen, it could mean the loss of significant value to the business.
A business’s intellectual capital includes assets such as trademarks, patents, copyrights, and brand names. In the digital age, it also includes critical knowledge and relationships. A key employee may hold the key to expertise or vital business relationships that can exit the business when the employee does.
Businesses can protect their valuable trade secrets through patents, trademarks, and nondisclosure agreements, but they can’t look to their general liability insurance to protect against intellectual property theft or damage, or patent litigation.
Patent insurance is a form of intellectual property insurance that indemnifies the business against losses due to patent litigation. Offensive patent coverage protects the patent holder from legal attempts to attack the patent and defensive coverage protects the business against claims of patent infringement.
Intellectual property insurance can be complex, and the application and underwriting process can be extensive, involving patent searches, legal opinions, and an in-depth proposal from the insurer outlining the terms of coverage. With the coverage in place, the insurer ill handle everything from investigating a claim—brought by or against the business—to managing the lawsuit to negotiating settlements.
Protecting intellectual property is about protecting the value of a business but it can be a complex issue, requiring the guidance of an experienced business insurance broker specializing in it.