Intellectual Property Insurance

Protecting the patents, trademarks, copyrights, and trade secrets a business is built on

Intellectual property insurance protects your business against the cost of defending and pursuing disputes over patents, trademarks, copyrights, trade secrets, and trade dress — the exact exposures a standard commercial general liability policy carves out with a broad intellectual-property exclusion. It pays legal defense, settlements, and judgments when you are accused of infringing someone else's rights, and, on the enforcement side, funds the cost of stopping a competitor who is copying your own protected work.

The critical point is that a general liability policy's "personal and advertising injury" grant is a narrow, closed list that responds only to the insured's own promotional advertising and expressly excludes intellectual-property infringement other than a sliver of advertising-idea and slogan claims. Patent litigation — the most expensive category of business litigation in the country, routinely running into the millions before trial — sits entirely outside that grant. Intellectual property coverage is the dedicated market built for that gap.

What Intellectual Property Insurance Covers

Coverage is written in two directions — defending claims against you and enforcing your rights against others:

Infringement Defense — Pays to defend the business against claims that its products, services, branding, or content infringe another party's patent, trademark, copyright, or trade dress.

Damages & Settlements — Covers the settlements and judgments a business must pay when an infringement claim succeeds, not just the cost of the defense.

IP Enforcement / Pursuit Cover — Funds the legal cost of pursuing infringers who copy the business's own patented invention, brand, or copyrighted work — protecting the value the business has built.

Contractual Indemnity to Customers — Responds to the IP infringement indemnities a business signs into customer, licensing, and reseller contracts, which most other policies exclude.

Loss of Net Income — Covers lost profit when an infringement injunction or dispute forces the business to stop selling a product or using a brand.

Legal Defense Costs — Pays the defense costs that, in patent and trademark disputes, are frequently the largest single exposure — often exceeding any eventual damages.

What It Does Not Cover

Intellectual property coverage is dedicated content-and-rights protection, so it excludes adjacent risks that belong on other policies:

• Bodily injury and property damage, which belong to general liability
• Data breach, ransomware, and network-security losses, which belong to cyber
• Errors in professional services delivered to a client, which belong to professional liability or technology E&O
• Deliberate, willful, or knowing infringement, and claims known before the policy's retroactive date
• Media content offenses like defamation and invasion of privacy, which belong to media and advertising liability

Who Needs Intellectual Property Insurance

Any business whose value lives in what it creates, brands, or licenses is exposed, especially:

• Technology and software companies shipping products that could read on someone's patent
• Manufacturers and consumer-product companies with distinctive designs and trade dress
• Life sciences, medical device, and hardware startups built around a patent portfolio
• Media, publishing, gaming, and creative studios that license and reuse content
• Businesses that sign IP indemnity clauses into enterprise, reseller, or licensing contracts
• Companies raising capital, where investors and acquirers increasingly expect IP coverage in diligence
• Brand owners who need the means to enforce their trademarks and patents against copycats

How Coverage Is Structured

Intellectual property insurance is a specialty, claims-made line placed largely through surplus and specialist markets. A defensive policy responds to infringement claims made against the insured; an enforcement or pursuit policy advances the cost of the insured going after an infringer, usually with a co-payment and a recovery-sharing feature. Policies carry a retroactive date, so prior known disputes are excluded, and coverage territory must be set to match where the business sells and where its rights are registered. Limits, defense-inside-or-outside-the-limit terms, and consent-to-settle provisions vary widely between carriers, and patent coverage in particular is underwritten around the specific products and claims at issue.

Real-World Claim Examples

• A patent assertion entity sues a growing software company, and general liability denies the defense under its IP exclusion while intellectual property coverage funds the fight through discovery and claim construction
• An enterprise customer tenders an IP indemnity demand after being sued over technology you supplied, and the policy responds because it was written to cover the IP indemnities you sign into customer contracts
• A competitor sells a near-identical copy of your patented device, and enforcement costs are paid only if the optional pursuit coverage was purchased rather than defense coverage alone
• A company keeps using a logo after a cease-and-desist letter arrives, and the later suit is denied as a known claim and as willful infringement
• A publisher reuses licensed photos beyond the license terms and is sued for copyright infringement, covered as an IP claim, while a defamation count in the same suit belongs on a media policy

Any one of these can run well into six or seven figures in defense costs alone, which is why defense funding is the heart of the coverage.

Regulatory & Contract Context

Intellectual property risk is increasingly driven by contract, not just litigation. Enterprise software, manufacturing, licensing, and reseller agreements now routinely require the supplier to indemnify the customer against IP infringement claims and, more and more, to carry intellectual property insurance as a condition of doing business. Patent assertion by non-practicing entities remains a large and persistent source of demand letters against operating companies of every size, and investors and acquirers treat a clean, insured IP position as part of diligence. Coverage is not a substitute for good IP hygiene — clearance searches, registration, freedom-to-operate opinions, and disciplined contracting — but it is the financial backstop when a dispute lands anyway.

Why Proper Placement Matters

Underwriters weigh your products and how close they run to crowded patent fields, your trademark and copyright portfolio, revenue and territory, the IP indemnities you have signed, any prior demand letters or disputes, and the strength of your clearance and registration practices. Because capacity is specialized and terms differ sharply on defense treatment, consent-to-settle, enforcement co-payments, and retroactive dates, the placement details matter as much as the limit. Matching the policy to the real exposure — defensive, enforcement, or both — and aligning it with the indemnities in your contracts are the essential steps. The two sides behave differently when a dispute lands. On defense, the policy funds a patent suit against you within its limit, but forms differ on when a demand letter counts as a claim, who chooses counsel, and whether your consent is needed to settle. On enforcement, the policy typically advances only part of the cost of pursuing a copycat and shares the recovery, so you stay a financial partner in your own lawsuit.

The gap that hurts most is assuming your general liability's "personal and advertising injury" cover defends an infringement suit. The form excludes copyright, patent, trademark, and trade secret infringement, with a narrow exception for copyright, trade dress, or slogans used in your own advertisement. A patent demand letter arrives, general liability declines, and the defense bills start with no policy behind them.

Our Approach

At Cory Washington & Co., we treat your intellectual property as the asset it is. We place coverage that defends the infringement claims your general liability policy excludes, funds enforcement when someone copies your work, and backs the IP indemnities you've signed into customer contracts — set to a limit and territory that fit how and where you actually do business. We read your contracts for the indemnity obligations that drive the exposure and coordinate the placement with your other lines. We also insure closely related risks, including media and advertising liability, cyber, professional liability, and technology companies.

Your ideas are your most valuable asset and the one your general liability policy leaves out — we build the coverage to defend them and to enforce them, defense costs and customer indemnities included.

All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.

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