You have an idea that is unique. Perhaps it is a new process, or you invented a machine that works in a new way, maybe you wrote a book, computer code or a song. All of the above are examples of what intellectual property is.
IP infringement and IP insurance
When someone steals your intellectual property, it is infringement. There are several kinds of intellectual property infringements, and each has different legal rules and remedies.
Types of infringement
- Patent infringement
- Copyright infringement
- Trademark infringement
- Service mark infringement
If you are a victim of any kind of infringement or accused of infringing someone else's intellectual property, you can face significant legal bills. To protect your company and yourself from large expenses you should take two basic steps.
Protect your work and consider insurance
1. Register your invention or creative work with the appropriate U.S. office. Most inventors seek the help of a patent attorney because navigating the U.S. Patent and Trademark Office (USPTO) can be complex. You can also record copyrights, trademarks, and service marks through the applicable offices to establish formal protection.
2. Purchase intellectual property (IP) insurance. For a practical overview of policy options and how they work, see IP Insurance Overview — Aldgate.
There are two main types of IP insurance. Defensive policies help if you are accused of infringing someone else's IP. Offensive policies help you pursue litigation when someone has infringed your IP. For more on coverage considerations, see Intellectual Property Insurance Coverage.
Many small and medium-sized businesses count their intellectual property as their most valuable asset. If you value your IP, you may want a policy that includes both defensive and offensive coverage.
Why it matters
A major industry study has noted that patent and other IP lawsuits are common and that awards can be very large. Even when outcomes vary, the cost of defense or prosecution can be burdensome for smaller organizations.
For related articles about insurance topics and practical business guidance, see Insurance-related articles: intellectual property, Halloween safety, property taxes, business property insurance, copyright.
Defensive IP insurance
When you have defensive intellectual property insurance, the insurer pays for your defense when you are sued for alleged infringement. If you lose, the policy may help pay damages or settlements subject to policy terms.
Offensive IP insurance
If someone infringes your intellectual property, an offensive policy helps pay legal costs to pursue compensation or an injunction. Bringing a lawsuit can be costly, and this type of coverage can help level the financial playing field.
If you are unsure which options fit your situation, consider talking to a professional who can review your risks and coverage needs — or talk to an agent about specific policy quotes.
Frequently Asked Questions
What is the difference between defensive and offensive IP insurance?
Defensive insurance pays to defend you if you are accused of infringement; offensive insurance helps you sue to enforce your IP rights.
Do I need to register my work to get IP insurance?
Registration is not always required to buy insurance, but formal registration (patent, trademark, copyright) strengthens your legal position and is often recommended.
Will IP insurance cover all legal costs?
Coverage varies by policy; most policies have limits, exclusions, and conditions, so review terms carefully with an advisor.
Can small businesses afford IP insurance?
Options exist at different price points, but affordability depends on coverage limits, deductibles, and the specific risks of the business.