What is Computer Value Added Reseller Intellectual Property?
Computer Value Added Reseller (VAR) Intellectual Property Insurance is a specialized form of coverage designed to protect technology resellers against risks tied to intellectual property (IP). These businesses often develop proprietary software, configure systems, or integrate third-party technology solutions — all of which may involve IP exposures. This coverage helps protect against claims such as copyright infringement, trademark disputes, or misappropriation of trade secrets.
Who Needs It
Technology resellers, systems integrators, IT consultants, and managed service providers are common buyers of this insurance. Operators in these roles often customize hardware and software for clients, which can inadvertently expose them to liability risks. Even small clubs or niche tech organizations distributing modified open-source software may benefit from this protection.
What It Typically Covers
Computer VAR Intellectual Property Insurance generally provides coverage for:
- Defense costs in IP litigation (e.g., copyright or patent infringement)
- Settlements or damages arising from covered claims
- Alleged misappropriation of client or competitor data or code
- Unintentional infringement during system configuration or delivery
For example, if a VAR unknowingly integrates a copyrighted software module into a client’s system, and the original owner files a claim, this insurance may help cover legal expenses and potential settlements.
Common Exclusions or Limitations
Policies often exclude intentional violations, contractual obligations outside standard terms, and claims involving criminal acts. Coverage for patent infringement may be limited or require a specific endorsement. It's also important to note that commercial general liability (CGL) policies typically do not cover IP exposures, which is why specialized protection is necessary.
Factors That Influence Cost
Premiums depend on several underwriting factors, such as:
- The type and volume of technology sold or modified
- Revenue size and distribution model
- Geographic area of operation
- Prior claims history
- Risk management protocols, including licensing practices
Companies with a history of clean IP usage, strong documentation, and clear licensing agreements may be viewed more favorably during underwriting.
Proof of Insurance & Compliance
Some clients or contracts may require proof of IP liability coverage before engaging a VAR. Certificates of insurance can serve as evidence that your business has the appropriate safeguards in place. This is especially relevant for contractors working with large corporations or government agencies.
How to Get a Quote
Getting a quote for Computer VAR Intellectual Property Insurance typically involves sharing your business model, product details, and prior claims history. A licensed insurance professional can guide you through the process and help tailor coverage that fits your operational risks.
Request a customized quote today to protect your business from unexpected IP claims.
For more in-depth insight into specialized IP protection, visit our page on Intellectual Property Defense Insurance. You may also find helpful guidance in our resource on Computer Consultant Intellectual Property Liability Insurance, which addresses similar exposures in the technology sector.
Frequently Asked Questions
Do I need this coverage if I only resell third-party software?
Yes, even if you’re only reselling, integration errors or misused licenses can lead to liability claims.
Does this insurance cover patent infringement?
Coverage for patent infringement varies by policy and may require a special endorsement or rider.
Is this the same as general liability insurance?
No, general liability insurance typically does not cover intellectual property claims. This is a separate, specialized policy.
What documentation will I need to apply?
You’ll usually need to provide a business description, revenue breakdown, prior claims history, and details on your tech offerings.
Can startups qualify for this coverage?
Yes, startups can qualify. In fact, early-stage companies often benefit from this protection due to increased IP exposure.
Still have questions? Talk to a local insurance expert.