Intangible assets are estimated to make up more than 84% of S&P 500 firm value, driven by the digital revolution and its focus on research and development, databases, brand and software. But as the number and value of intangible assets grows so do the threats. Be it patents, trademarks, copyrights or trade secrets, businesses need an effective way of defending their IP from infringement and themselves from false claims. IP insurance is designed to provide this risk mechanism, and to great effect.
From financial protection to invaluable peace of mind, here are five reasons why IP liability insurance is not only a vital part of modern risk management but a driver of business success.
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Mitigating risk and driving innovation
The litigation costs of potential IP infringement claims, challenges to ownership and other disputes can be an existential threat. This can relegate innovation initiatives to the back seat, over fears that short-term survival could soon be at stake while the benefits of these initiatives may only help in the long term. But it’s these same projects that ultimately drive business growth.
With a comprehensive IP insurance policy in place, businesses can adopt a more forward-thinking mindset. IP insurance helps to address potential legal challenges and disputes, so businesses can push ahead and invest resources in projects such as research and development, rather than holding them back in case of a claim. This strategy can lead to continued innovation and growth, and help build a brighter future for everyone.
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Financial protection
If a business faces a lawsuit alleging infringement of IP rights, IP insurance can cover legal expenses, damages and settlements. Considering the surging number of IP disputes, that financial support can be the difference in survival.
Not only does the right IP insurance policy help businesses to avoid significant financial losses, it also preserves resources for other critical activities. Backed by financial protection, businesses are free to focus their resources on activities like research and development or market expansion.
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Strengthening business relationships
Taking out a comprehensive IP insurance policy can boost credibility and reputation, two important currencies in today’s business world. Particularly for those dealing with potential investors and clients, IP insurance shows that you take IP protection seriously and have measures in place to mitigate the associated risks.
By protecting the indemnity in contracts, you’ll give clients the confidence to invest and enhance all-important business relationships.
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Access to expertise
IP insurance is designed to maximize policyholder options during a claim, providing businesses with even greater value. And unlike most liability insurance policies, with IP insurance you can select your own counsel, subject to reasonable costs.
To give you a helping hand, policyholders get full access to our extensive global network of IP law firms, enabling them to pick the best firm for their claim. We also have specialist claims handlers to assist and advise the policyholder while they navigate the dispute to resolution.
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Peace of mind
When you depend on IP assets in what is an increasingly complex and litigious environment, IP insurance acts as a safety net against unforeseen, spurious legal risks.
Trends like AI and data protection can mean IP disputes are top of mind, in particular the financial implications that come with them. But with the right policy you’re free to focus on core activities without this constant worry—helping you to not just survive but thrive.
The business benefits of IP insurance
While our dependance on intangible assets is growing, IP liability insurance products have progressed significantly to fill the protection gap. Broader cover, more equitable retention and competitive premiums are all on offer, as IP insurance continues to play a major role in protecting modern businesses.
With the right policy, not only can you get cover for the financial risks associated with IP disputes, but you can actually ignite innovation, give stakeholders confidence to invest, and gain peace of mind. What better time to start than now.
Demand for IP insurance is on the rise. Get five reasons behind the surge in this article.
