While the technology and life sciences sectors have been traditional areas of focus for intellectual property (IP) insurance, one specialist insurance provider says now is the time for brokers to open up discussions to include other industries.
Maddi Brown, intellectual property practice leader with London, U.K.-based CFC Underwriting, said Canadian brokers should not just be thinking about “easy, typical” sectors like tech, but a wide range of industries.
“There’s more IP in places that people haven’t previously realized,” Brown said, citing the agricultural and manufacturing spaces in Canada as examples. “We’ve seen it as well in construction and building. These are areas that [brokers] need to start looking into, because clients are starting to protect solutions in those areas.
“Clients want this cover, they just don’t know it exists.”
Brown spoke with Canadian Underwriter last week about IP insurance, and how the insurance industry needs to move forward and simplify IP coverage for the small- and medium-sized enterprise market. IP insurance typically involves long, complicated proposal forms, a fee charged to get a proper quotation, and a lot of legwork and time, she said.
The coverage helps businesses defend themselves against claims of IP infringement, and can help businesses pursue those who are infringing on patents, copyrights or trademarks. There can also be coverage for things like contractual indemnities, loss of IP rights and loss of profit.
For brokers, there are several reasons why now is the time to talk about IP insurance “across the board,” Brown said, whether that involves clients in oil and gas, agriculture, manufacturing, construction or other industries.
One is that the pandemic has highlighted the importance of intangible assets and how to protect them.
Another consideration is how a business uses its IP, and if IP is now applicable to much larger clients and a broader scope since the pandemic.
IP insurance also comes in handy for mergers and acquisitions. Consider a client who has patents, but also insurance to protect those patents. “We’ve had clients say that this has really helped them for the next round of funding,” Brown said.
Having the insurance policy is also another comfort to the acquirer. “We still have a lot of clients who have retained the insurance policy, despite being acquired because, again, that third party doesn’t want to take on that risk. But if they can take on the risk with the insurance… that is another layer of protection.”
For Brown, the value of IP insurance is to SME clients “first and foremost. And I think in order to grow the market in a sustainable way, it’s where the focus should be, and that’s where brokers should focus.”
Feature image by iStock.com/putilich