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Most businesses would not consider insurance for intellectual property (IP) a priority, if at all. For many, personal injury and revenue are priorities for insurance, while other potential liabilities are often neglected. However, there are forms of insurance that can protect less obvious assets. 

IP is an incredibly valuable asset to have as a business, and for this reason, you should take active steps to register or assert your IP rights. In addition, you can use IP to demonstrate your legitimacy as a business to potential investors. If you consider your IP integral to the value of your business, you may want to investigate if IP insurance is right for you and your company. 

What is IP Insurance?

Generally, IP insurance policies allow you to obtain cover for disputes that may arise from your IP, such as the costs of legal proceedings. Depending on the type of cover you choose, you can use IP insurance to cover legal costs for: 

  • enforcing claims against infringers (e.g. damages for loss of profits or reputation) and can apply to any IP right locally or internationally; or
  • defending yourself against infringement claims, such as claims made against your clients, customers or licensees.

What Does IP Insurance Cover?

As a rule, IP insurance only covers IP that is specifically identified to the insurer. For example, if you have started a new business and are interested in protecting your brand name, you will need to purchase a new policy or extend your existing insurance coverage. Keeping track of your IP in the form of a portfolio will help you decide on the type of policy that is most applicable to you. 


Like most insurance, there are limits on the payment of legal expenses and what amounts you can recover, which the insurer controls. Some initial conditions may include that your insurer:

  • needs to be satisfied that your case has a reasonable prospect for success;
  • may cap the amount, and your insurer may not fund unlimited legal expenses, spending on the specific policy you purchased;
  • will have the right to withdraw funding under certain circumstances, such as if you reject a reasonable settlement offer.

Like most things, IP insurance will not solve all of your problems. However, it may help you out if you find yourself caught up in a dispute. 

What Factors Should I Consider?

Before you purchase IP insurance, be sure to consider if it is a good investment for your business. Some points to consider include:


Questions To Consider

The likelihood of litigation

Is the risk of being taken court over your IP real and likely? Is the industry that your business operates in prone to litigation? 

The value of your brand

How valuable is your IP to your business? Has your brand become iconic or achieved a significant reputation that you want to protect? Generally, the longer that your brand has been around, then the more valuable your IP is. This is why some businesses may consider IP insurance after trading and using their IP for some time.

Level of coverage

How much coverage do you need? You may only need to purchase a policy with limited coverage to protect your key products/services. Consider purchasing a basic, limited insurance policy to act as a safety net to reduce the risk.

Self-funding options

Are you prepared to fund your litigation if necessary? How much could your business be damaged if you cannot afford to enforce your rights? This is quite difficult to predict, but having some amount in reserve to protect your IP may offset how much you need in insurance.

If you think that IP insurance might help you and your business, we recommend that you seek further advice on whether IP insurance is right for you. 

Key Takeaways

Overall, purchasing insurance for your IP is a commercial decision and depends on how valuable you think your intellectual property is. Some key factors to consider are:

  • is the risk of a dispute arising from your intellectual property high? If it is, are you likely to be out of pocket from legal costs; and
  • does your existing insurance cover your IP? If you have recently developed IP, an existing policy will not automatically cover this new intellectual property.

Get the right advice on whether IP insurance is right for you, and be sure to check what is covered by the policy and if there are any significant limitations. If you have any questions about intellectual property insurance, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What will IP insurance cover?

Depending on the insurance you select, your IP insurance may cover your legal costs against trade mark infringers, or cover legal costs to protect you against infringement claims by others.

Why is it important to protect my IP?

Your IP is important, as it can help you grow your branding and business, as well as attract investors. For this reason, it is important to have systems in place to protect your IP.


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