Insurance Day: Intellectual property insurance is evolving

9th December 2015

“[Nigel] Swycher points out there are more than 250,000 SMEs that are exposed to IP risk in the US. “If they are sued it could cost them $1m and potentially put them out of business. However, spread across all SMEs, the risk is less than a household burglary – and who doesn’t insure against that? This looks like a gold mine for anyone willing to engage with the data.”

Erik Alsegård, CFC Underwriting

Something has happened in the world of intellectual property (IP) infringement insurance. The tide has
turned and suddenly it is on ev- eryone’s agenda. Although there is still some way to go before it can be considered a commodity insurance product, IP insurance is now coming of age. So why will this class of insurance move from being a small, niche product to a volume product?

As with most developments in the intangible economy, this shift has come about as a result of subtle, incremental changes over the past 10 years. The changes are evident not only in how IP risk is underwritten, but also in how prospective clients put intangible assets and associated risks rmly on the board agenda.

Critically, the data analytics now available can transform the class from individual, tailored policies to a volume class. The cat- alyst for this transformation is in part the improved access to litiga- tion data and the ability to use this data as a predictor of future risk.

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* This article was published on 9 December 2015 issue of Insurance Day.

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