News articles about intellectual property issues are an every day occurrence. The Internet and e-commerce have multiplied the dangers and exposures for small businesses as much as anyone. Here's an overview of the insurance issues that surrounds intellectual property. I'll discuss four types of intellectual property: patents, copyrights, trademarks, and trade secrets.
Coverage to Defend Your Intellectual Property - You Sue Them
The owner of a patent or copyright can incur significant expenses defending their intellectual property rights. For example, suppose a photographer posts a picture on her website. A web designer decides to use the photo without permission or compensation. When the photographer discovers the infringement there may be a series of emails from the artist to the website owner. From there, the dispute may escalate into a court battle. Time, court expenses, and legal bills become a part of the equation.
Worse are the expenses that may result in trying to enforce a patent, copyright, or trademark when a "little guy" is up against a Fortune 500 company with hundreds of attorneys.
Special insurance coverage is available to pay for your costs in going after an infringer. Coverage can be purchased to protect patents, copyrights, trademarks and trade secrets. Several specialty insurance organizations offer the policies. A web search for "intellectual property insurance" should bring up several such companies.
What property rights are protected? Be sure the policy you consider covers the rights you want to protect – patent, copyright, trade secrets, or trademark.
How much coverage are you buying? Policies are priced based on the limit of coverage you buy. A limit of $100,000 may sound like a great deal until you start thinking about the cost of attorneys and the related costs of a suit. Who are you going after? What resources will a Fortune 500 company have to throw at you? Most entrepreneurs buy this coverage to level the playing field. That means you'll need resources. Consider high limits of coverage.
What is the insurer's experience in the business? This isn't an area of insurance where hundreds of insurers compete. It's a specialty market with few players. You may pay a bit more for quality and experience. It will be worth it if you have a claim.
Read the fine print. Understand the coverage you are buying. What are the exclusions and limitations? Use an expert to help with your search and decision.
General Liability Insurance Policies - They Sue You
Defense of an allegation of infringement of intellectual property rights can be expensive and time consuming. The general liability insurance policy purchased by most businesses offers some coverage for the owners.
The primary coverage provided in a general liability policy is for bodily injury and property damage that comes out of your business. Common claims are product liability and slip-and-fall accidents.
The second section of the policy deals with personal injury and advertising injury coverage. Here the policy provides coverage for libel, slander, malicious prosecution and wrongful eviction. Also included is some coverage for your liability in intellectual property rights.
Here are some of the elements that are covered, and some of these policies' limitations:
Violation of Privacy: Most policies include coverage for "oral or written publication, in any manner, of material that violates a person's right of privacy."
Copyright, Trade Dress and Slogan Infringement: Most policies include coverage for copyright violations that take place within advertising. The word advertising is defined to include any notice to the public about your goods, products, or services including the Internet. However, web-sites are only covered for that part of the site that is about your goods or services for the purpose of attracting customers.
Violation Of Patents: There is no coverage under standard general liability policies for your liability arising out of an allegation of patent infringement.
Trademark Infringement: There is no specific coverage for trademark infringement.
Trade Secrets: There is no specific coverage for disclosure of trade secrets.
Standard General Liability Exclusions: The coverage outlined above is admittedly limited. However, there are further limitations. If you intentionally violated someone's privacy, or copyright, coverage is excluded. Further, if you are in the publishing, advertising, broadcasting, or telecasting business there is no coverage. Web designers, web hosting companies, and Internet content providers are also not covered.
The Best Solution: Professional Liability and E-Commerce Insurance - Protection for When They Sue You
If you are a Web-designer, publisher, advertising agency, broadcaster, Internet content provider, or simply have a website that is content-based, consider special insurance coverage designed specifically for the work you do.
Professional liability and e-commerce insurance policies offer a variety of coverage options. The policies may also plug other insurance holes you may have. Some examples: Web designers can be held liable for errors in programming/coding that results in web site downtime and loss of revenue. Publishers and broadcasters can be sued for libel and slander. E-commerce sites can incur significant losses caused by hackers and denial of service attacks. Web site owners may lose revenue when servers crash or power is interrupted.
Professional liability insurance and e-commerce insurance are two different things. Professional Liability Insurance protects against a wrongful act for which the policyholder is liable. Also known as malpractice insurance, this coverage can protect software and web designers from legal actions brought by clients who feel the software of site was not correctly designed. Policies can protect publishers and broadcasters from allegation of libel and slander, in addition to violation of intellectual property rights. Wrongful publishing and violation of privacy rights can also be included.
On the other hand, e-commerce insurance is a combination of many different coverage sections – from loss of business income when a web site goes down, to copyright infringement, to the services of a public relations team to repair your reputation after a hacker or cyber thief attack. Almost all of these policies include coverage for copyright and trademark infringement.
There are four issues to keep in mind when shopping for professional liability and e-commerce policies.
All Professional Liability and E-Commerce Policies Are Unique - There are no standard policies. Each insurer writes their own policy and provides their own, unique coverage. Get quotes from multiple insurers.
Deal With A Knowledgeable Advisor - Get quality help as you look for the right insurance coverage. A strong agent or broker is vital. Consultants, too, can help. These policies are complicated and require special expertise.
Understand What's Covered - Read the policy to learn the coverage included in the insurance. Don't rely on sales brochures or website descriptions. Get the actual policy and read it.
Understand What's Not Covered - Read the policy to learn the exclusions and limitations. Recall that the general liability policy discussed earlier covered copyright infringement, unless you are in advertising, broadcasting, or publishing. Insurers are famous for giving coverage then taking it away. Read the exclusions and definitions. Look for warning words like, "except" when reading the policy.
Coverage to Defend Your Intellectual Property - You Sue Them
The owner of a patent or copyright can incur significant expenses defending their intellectual property rights. For example, suppose a photographer posts a picture on her website. A web designer decides to use the photo without permission or compensation. When the photographer discovers the infringement there may be a series of emails from the artist to the website owner. From there, the dispute may escalate into a court battle. Time, court expenses, and legal bills become a part of the equation.
Worse are the expenses that may result in trying to enforce a patent, copyright, or trademark when a "little guy" is up against a Fortune 500 company with hundreds of attorneys.
Special insurance coverage is available to pay for your costs in going after an infringer. Coverage can be purchased to protect patents, copyrights, trademarks and trade secrets. Several specialty insurance organizations offer the policies. A web search for "intellectual property insurance" should bring up several such companies.
What property rights are protected? Be sure the policy you consider covers the rights you want to protect – patent, copyright, trade secrets, or trademark.
How much coverage are you buying? Policies are priced based on the limit of coverage you buy. A limit of $100,000 may sound like a great deal until you start thinking about the cost of attorneys and the related costs of a suit. Who are you going after? What resources will a Fortune 500 company have to throw at you? Most entrepreneurs buy this coverage to level the playing field. That means you'll need resources. Consider high limits of coverage.
What is the insurer's experience in the business? This isn't an area of insurance where hundreds of insurers compete. It's a specialty market with few players. You may pay a bit more for quality and experience. It will be worth it if you have a claim.
Read the fine print. Understand the coverage you are buying. What are the exclusions and limitations? Use an expert to help with your search and decision.
General Liability Insurance Policies - They Sue You
Defense of an allegation of infringement of intellectual property rights can be expensive and time consuming. The general liability insurance policy purchased by most businesses offers some coverage for the owners.
The primary coverage provided in a general liability policy is for bodily injury and property damage that comes out of your business. Common claims are product liability and slip-and-fall accidents.
The second section of the policy deals with personal injury and advertising injury coverage. Here the policy provides coverage for libel, slander, malicious prosecution and wrongful eviction. Also included is some coverage for your liability in intellectual property rights.
Here are some of the elements that are covered, and some of these policies' limitations:
Violation of Privacy: Most policies include coverage for "oral or written publication, in any manner, of material that violates a person's right of privacy."
Copyright, Trade Dress and Slogan Infringement: Most policies include coverage for copyright violations that take place within advertising. The word advertising is defined to include any notice to the public about your goods, products, or services including the Internet. However, web-sites are only covered for that part of the site that is about your goods or services for the purpose of attracting customers.
Violation Of Patents: There is no coverage under standard general liability policies for your liability arising out of an allegation of patent infringement.
Trademark Infringement: There is no specific coverage for trademark infringement.
Trade Secrets: There is no specific coverage for disclosure of trade secrets.
Standard General Liability Exclusions: The coverage outlined above is admittedly limited. However, there are further limitations. If you intentionally violated someone's privacy, or copyright, coverage is excluded. Further, if you are in the publishing, advertising, broadcasting, or telecasting business there is no coverage. Web designers, web hosting companies, and Internet content providers are also not covered.
The Best Solution: Professional Liability and E-Commerce Insurance - Protection for When They Sue You
If you are a Web-designer, publisher, advertising agency, broadcaster, Internet content provider, or simply have a website that is content-based, consider special insurance coverage designed specifically for the work you do.
Professional liability and e-commerce insurance policies offer a variety of coverage options. The policies may also plug other insurance holes you may have. Some examples: Web designers can be held liable for errors in programming/coding that results in web site downtime and loss of revenue. Publishers and broadcasters can be sued for libel and slander. E-commerce sites can incur significant losses caused by hackers and denial of service attacks. Web site owners may lose revenue when servers crash or power is interrupted.
Professional liability insurance and e-commerce insurance are two different things. Professional Liability Insurance protects against a wrongful act for which the policyholder is liable. Also known as malpractice insurance, this coverage can protect software and web designers from legal actions brought by clients who feel the software of site was not correctly designed. Policies can protect publishers and broadcasters from allegation of libel and slander, in addition to violation of intellectual property rights. Wrongful publishing and violation of privacy rights can also be included.
On the other hand, e-commerce insurance is a combination of many different coverage sections – from loss of business income when a web site goes down, to copyright infringement, to the services of a public relations team to repair your reputation after a hacker or cyber thief attack. Almost all of these policies include coverage for copyright and trademark infringement.
There are four issues to keep in mind when shopping for professional liability and e-commerce policies.
All Professional Liability and E-Commerce Policies Are Unique - There are no standard policies. Each insurer writes their own policy and provides their own, unique coverage. Get quotes from multiple insurers.
Deal With A Knowledgeable Advisor - Get quality help as you look for the right insurance coverage. A strong agent or broker is vital. Consultants, too, can help. These policies are complicated and require special expertise.
Understand What's Covered - Read the policy to learn the coverage included in the insurance. Don't rely on sales brochures or website descriptions. Get the actual policy and read it.
Understand What's Not Covered - Read the policy to learn the exclusions and limitations. Recall that the general liability policy discussed earlier covered copyright infringement, unless you are in advertising, broadcasting, or publishing. Insurers are famous for giving coverage then taking it away. Read the exclusions and definitions. Look for warning words like, "except" when reading the policy.
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