Intellectual Property Insurance Cost

Intellectual Property Insurance Cost

What does intellectual property insurance cost? This is one of the first questions I hear from prospective purchasers of this kind of insurance. The short answer is....it depends on the type of insurance, the industry in which your product or IP is operating and the number of products or IP properties to be insured.

Let's take a closer look by specific type of insurance:

Patent Infringement Defense Insurance:
This is protection in the event your product is accused of infringing someone's patent(s). The cost depends on many factors but the most relevant are:

• the number of products insured
• the industry in which the products are sold
• the coverage territory (US only or world-wide)
• the coverage limit of liability

The cost is typically 2% of the limit of liability. For example, if the limit of liability is $1,000,000 then the annual premium will be $20,000.
(Under certain circumstances the rate can be as high as 3%).

Patent Enforcement Insurance:
This provides the money to a patent holder to enforce their patent(s) rights. Like defense insurance there are a number of factors which determine the cost but most relevant are:

• the number of patents to be insured
• the coverage territory (US or world-wide)
• the coverage limit of liability

 Usually the cost is 1-2% of the limit of liability. For example, if the limit of liability is $1,000,000 then the annual premium will range from $10,000 to $20,000.

Trademark Infringement Defense Insurance:
Trademark disputes are typically less expensive in terms of litigation costs than patent disputes therefore the cost of insurance is less. The cost is between 1/2 and 1% of the limit of liability. The cost factors are similar to the patent coverage.

Trademark Enforcement Insurance:
Again, trademark disputes are less expensive than patent disputes. The cost is between 1/2 and 1% of the limit of liability.

Note: There is not a large price difference between the insurers that write this insurance. While from a cost standpoint it can be beneficial to "shop around" for insurance on property and automobile because they are, in essence, commodities with almost identical coverage this is not true with IP insurance. When comparing quotes the major difference will be found in the coverage provided not the price.

For additional information please visit my website at Patent Infringement Risk