in the specialty insurance marketplace, this insurance product is
still very much in its infancy. The potential market, however, is
seen as in the billions. IP coverage is associated with four general
exposures: copyrights, trade secrets/ideas or practices, patents,
and trademarks. Given the explosive internet growth, there is already
a very significant dollar volume of litigation in play.
currently available are entirely manuscripted, with nothing even
approaching a standardized coverage form. The two broad categories
of insurance consist of "Mitigation",
" Abatement" or some other similarly-termed designation,
generally referring to legal expense to stop infringement by others;
and conversely an "Infringement Defense" insurance covering
legal expense to defend against actions alleging misappropriations.
Keep in mind that these policies are essentially legal expense insurance
only, and afford no other benefits of any kind. (Future versions
may or may not include options for insuring first party types of
financial loss, etc.)
policies commonly specify a deductible and/or coinsurance feature,
coinsurance typically being 20%. Their period-of-coverage features
bear a vague resemblance to ordinary "claims-made"
type insurance policies, in that they may or may not cover prior
acts, and usually slam shut with regard to claims upon expiration
or close of some discovery period. Underwriters typically require
a specific scheduling of the properties to be insured (Patents,
copyrights, etc.), and policies often contain rather onerous provisions
for insurance company sharing in monetary awards received as judgments
in successful actions. Underwriters may also impose any of numerous
documentation requirements at the insured's expense as a condition
of granting insurance.