What is Intellectual Property Liability Insurance?
Intellectual property (IP) insurance typically serves two purposes — it can help companies cover litigation costs related to the enforcement or defense of patents, trademarks or copyrights, and it can help protect policyholders from patent infringement claims brought against them. In today’s economy, where intangible assets are an increasingly large part of corporate balance sheets, companies of all sizes in all industries can benefit significantly from strong IP liability protection.
Why is IP Liability Insurance Important in Today’s Market?
Whether you work in your company’s Risk Management, Finance or Legal department, it’s important to know that patent litigation is on the rise and can impact your business at any time. Following several years of decline from 2015 to 2019, case counts increased from 2019 to 2020 and again into 2021. In fact, 4,404 patent suits were filed last year.*
Importantly, the prevalence of patent defenses filed against technology organizations continued to grow, rising to 45 percent of all cases in 2021. In 2015, such cases represented only 35 percent of the litigation landscape. As more companies in all industries pursue digital transformation agendas and seek to build digital-first business models, this trend is expected to continue.*
When it comes to measuring the financial impact of patent litigation, 2021 was also a historic year, with courts awarding $3.8 billion in patent damages. This was the third largest amount awarded in the past 10 years.*
* Source: Aon 2021 Patent Litigation Trends Report
What Does Intellectual Property Insurance Cover?
Aon works with clients to help secure comprehensive intellectual property insurance, which can cover a wide range of situations, including:
Third-party infringement claims for patent, copyright and trademark infringement**
Scheduled coverage for products, processes and services
Coverage for both competitor and non-practicing entities (patent trolls)
Coverage for appeals and counterclaims
Coverage for trade secret misappropriation claims
Contractual indemnity coverage and indemnified party defense
Loss mitigation through expert witness testimony, technical analysis and design-arounds
Client's choice of counsel
Post-incident response needs
** Includes (1) litigation expenses, settlements, and damages, (2) post-grant review / re-issue proceedings, and (3) invalidity, rectification, cancellation, or revocation proceedings.
How Aon Can Help
The number of clients securing comprehensive intellectual property protection has doubled year over year for the last three years, and monthly submissions into the IP insurance marketplace now exceed 300 per month. We provide a data- and analytics-driven approach and offer value-add services, including:
Tailored Coverage Against Significant Damages
Using a data-driven risk model, Aon analyzes each client’s risk to deliver highly customized pricing and coverage tailored to its specific business requirements.
Efficient Policy Placement
Clients experience a streamlined placement process through Aon’s standardized approach to managing the data required by underwriters.
Competitive Risk Assessment
Aon helps clients assess litigation risks within their specific patent portfolio.
Should a claim be brought, Aon gives you access to deeply experienced intellectual property professionals who will develop a response plan and create design-arounds to help manage exposure to potentially catastrophic risks.