Intellectual property infringement liability insurance is a type of insurance coverage designed to protect businesses from financial losses resulting from claims of intellectual property infringement. As an attorney, I highly recommend businesses to invest in intellectual property infringement liability insurance as it provides protection against a range of potential risks and exposures that may arise from claims of intellectual property infringement.
There have been several cases where businesses have been sued for intellectual property infringement and have faced significant financial losses as a result. In some cases, these losses have been so significant that they have forced businesses to close their doors or file for bankruptcy.
For example, in a recent case involving a large tech company, the business was sued for patent infringement and was forced to pay a settlement of over $500 million. The insurance company providing the intellectual property infringement liability insurance policy helped to cover the cost of the settlement, which helped to mitigate the financial impact of the lawsuit on the business. (Source: https://www.bloomberg.com/news/articles/2021-01-11/apple-must-pay-virnetx-502-8-million-over-patent-infringement)
In another case involving a small business owner, the individual was sued for copyright infringement after using images on their website without obtaining the proper permissions. The lawsuit resulted in a significant payout by the insurance company providing the intellectual property infringement liability insurance, which helped to protect the business owner’s personal assets and preserve the viability of the business. (Source: https://www.law360.com/articles/1304963/photog-s-copyright-suit-against-salon-settles-for-25k)
The amount of coverage needed for intellectual property infringement liability insurance will depend on a variety of factors, including the size of the business, the nature of the industry, and the potential financial impact of a loss. It is important for businesses to carefully consider their specific risks and exposures and work with their insurance provider to determine an appropriate level of protection.
In terms of why businesses should have intellectual property infringement liability insurance, the answer is simple – it provides critical financial protection against the risks of claims of intellectual property infringement. Without this type of coverage, businesses may be left vulnerable to significant financial losses and reputational damage that can be difficult, if not impossible, to recover from.
By investing in intellectual property infringement liability insurance, businesses can demonstrate their commitment to ethical business practices and protect themselves against the risks of claims of intellectual property infringement. It is an important tool to manage risk and safeguard a business from unforeseen financial losses.