Intellectual Property in Contracts — and Your Insurance

Most software licensing agreements contain clauses regarding intellectual property infringement, usually indemnifying the client for any IP infringement complaints. Rarely are these clauses supported by insurance, which is important to understand should problems occur. Remember, your contracted indemnification agreements do not obligate your insurer beyond their existing policy terms! Indemnification is a term associated with a financial promise to provide legal defense and damage awards for claims.

What may be covered to some extent on your General Liability / Property policy:

  • Trademarked or Service Marked titles or slogans
  • Copyrighted advertising materials

IP exposures usually covered by an Internet Liability policy:

  • Copyright Infringement
  • Infringement of Title
  • Infringement of Trade Name
  • Infringement of Trademark
  • Infringement of Slogan

IP exposures not covered:

  • Patent Infringement (You may secure patent infringement offense and/or defense coverage through specialty markets). Applications require an opinion letter, which can also be secured specifically for insurance purposes.
  • Trade Secret Infringement

This outline serves primarily as a benchmark warning to recognize areas, that should be reviewed by professionals who can alert you to risks and exposures. Always let your agent and insurer know about those insurance related sections of the contracts you sign.