Copyright Infringement Insurance: A small business guide

Copyright Infringement Insurance: A small business guide

Is your business involved in the creation, production, or distribution of content such as articles, videos, photographs, books, television shows, or blogs? If you answered yes, you need copyright infringement insurance for your company.

Your business being sued is the last thing you want to hear. Lawsuits can be costly in terms of money, time, reputation, and stress for all parties involved. They’ve also been known to close down some businesses. This coverage will defend your company against claims of libel, plagiarism, and invasion of privacy based on intentional torts.

Regardless of what you do, copyright infringement insurance is a fascinating concept to learn and something that is always worth comprehending. And, in this article, we’ve looked at the concept to help you understand it better.

The mere appearance of any image, literary work, music, software, design, or other media that is freely available on any platform such as the internet, newspaper, bulletin boards, magazines, posters, brochures, or other media does not make it exploitable.

Copying, using, or reproducing intellectual property for our own benefit without the permission and license of the owner of the image, literary work, or other intellectual property would be a copyright infringement.

If the owner or licensor of the copyright is aware of the infringement, he or she can most likely sue the infringer and demand a large sum of money as compensation. However, if you have an insurance policy, the situation can be completely different and more favourable.

Today, copyright infringement is a significant risk for businesses. Patent infringement, trademark or trade dress infringement, copyright infringement, trade secret misappropriation, and unfair competition are just a few of the infringement claims. When a company is sued for infringement, the cost of defending the claim can be prohibitively high. It’s possible that you’ll be covered by insurance.

Copyright Infringement Insurance covers the costs of defending copyright, trademark, registered design, patent, or trade secret infringement lawsuits. It can also cover the costs of legal action resulting from an unintentional infringement of intellectual property, as well as Loss of Revenue and Directors’ and Officer’s Insurance.

A patent, trademark, or copyright is only part of the solution; you should also consider intellectual property insurance to cover the costs of enforcing your rights.

Most copyright infringement risks are specifically excluded from most commercial general liability policies.

Patents on machinery, equipment, software, processes, or drugs; copyrights on books, music, songs, software, and websites; trademarks such as slogans, symbols, company names, and packaging; and trade secrets such as formulas, processes, customer lists, and strategies expose most businesses to copyright infringement.

If your company isn’t protected, it risks incurring significant costs as a result of failing to defend your company against an intellectual property claim, which can result in high settlement costs, design-around costs, strained customer relationships, and a stock price drop.

Your Company’s Copyright Insurance Intellectual Property Rights (IP) Patents, copyrights, trademarks, and trade secrets are all examples of intellectual property that can be valuable assets to your company. To protect your intellectual property, it’s critical that you understand the laws surrounding these concepts. You must also ensure that your actions do not infringe on the intellectual property of others.

  • Type of trademark
  • Similarity of design
  • Similarity of the product
  • Identity of retail outlets and purchasers
  • Similarity of advertising media used
  • Defendant’s intent
  • Evidence of actual confusion

Infringement Defense Cost Reimbursement

This copyright infringement insurance policy reimburses the policyholder for legal fees incurred in defending a lawsuit alleging that the policyholder has infringed on a patent, trademark, or copyright.

Because the policy is only intended to cover defence costs, there is no insurance coverage for damages to the policyholder if the policyholder’s intellectual property is found to be infringed.

The reason for this is that violations are frequently (but not always) intentional, and it is public policy to protect policyholders’ deliberate actions.

Why does your business need Infringement Defense Cost Reimbursement

Your ability to defend yourself in patent infringement lawsuits could be crucial to the survival of your business. No matter how frivolous the suit may be, every lawsuit alleging infringement must be taken very seriously and vigorously defended.

Abatement Enforcement Coverage 

When you have to enforce your patents, trademarks, or copyrights against infringers, Infringement Abatement Insurance reimburses you for your legal expenses. When a countersuit for invalidity challenges your patent, trademark, or copyright, Infringement Abatement Insurance covers your legal costs.

Why get this coverage

Your intellectual property is a valuable asset that you should protect. Every act of infringement reduces its value, and unchecked infringement can eventually render it worthless.

The following are the options you have for dealing with infringement:

  • Allow your intellectual property rights to lapse
  • Attempt to license the infringer while you’re in a financial bind
  • Sue the infringer and spend all of your cash reserves on legal fees

Commercial General Liability Insurance

Under your commercial general liability insurance policies, you’ll be protected from a copyright infringement lawsuit, which includes coverage for:

  • Copyright infringement
  • Defamation, including libel and slander
  • Misappropriation of advertising ideas
  • Invasion of privacy

If a copyright infringement case drags on for a long time, it could cost tens of thousands of dollars. If you are found guilty by the court, your small business will most likely be responsible for both parties’ court and attorney fees, as well as damages.

You’ll also be told to stop using the infringing work and hand over any company property that contains it.

Fortunately, up to the policy limit, your general liability policy will cover all of your legal defence costs and other expenses.

Most policies, on the other hand, only cover unintentional breaches of confidence. Your insurance policy may not cover the lawsuit if the court finds that you purposefully used another company’s trademarked work, leaving you to foot the bill.

Professional indemnity insurance

Professional indemnity insurance covers the costs of compensating clients for losses or damages caused by a business’s or an individual’s negligent services or advice.

If you work as a self-employed individual or for a company and offer your knowledge, skills, or advice as part of your profession, you should consider purchasing professional indemnity insurance.

Professional indemnity insurance is required by some professions’ professional bodies or regulators.

The majority of professional indemnity insurance is offered on a claims-made basis. This means that your insurer will only cover you for claims made against you while your policy is active. You will not be covered for a claim made against you after your policy has expired, even if the incident occurred while your policy was active.

Ask your insurance agent or broker, as well as the actual terms of your policy, if your current insurance policy covers you or your business for copyright infringement.

Remember that an insurance claim must be submitted in writing, within a reasonable amount of time, and in accordance with your policy’s claims procedure. Follow the policy’s terms or contact your insurance company directly.

If you are a frequent image user and find that your current policy does not cover you, consider shopping around for a policy that does. There are numerous policies to choose from, and they are not as costly as you might believe.

Also bear in mind that litigation is expensive, and because these policies will protect you in such a situation, the cost of obtaining one is likely to be less than the cost of defending a claim in court.

To have your work copyrighted in the United Kingdom, you don’t have to pay a fee or register it. Copyright law automatically protects your original work once you’ve created it. Normally, copyright belongs to the person(s) who created the work, but if the work is created for an employer as part of a job, copyright often belongs to the employer.

Unless there is a copyright transfer agreement, this usually does not apply to freelance or commissioned work.

You can use the copyright symbol or request a copyright notice from the Intellectual Property Office to deter plagiarism, show that your work is copyrighted, or identify yourself as the copyright owner.

It’s critical to take every precaution possible to avoid copyright infringement. These pointers could help you and your company stay safe.

  • Make Written Agreements – and Keep Accurate Records
  • Protect Your Reputation
  • Employ Sound Employment Practices
  • Fill out a claim form indicating a potential infringement threat and laying out the pertinent facts and details.
  • Once the policy terms have been met, the insurance company can approve the lawsuit and begin reimbursing litigation costs.

Companies that only require defence coverage should budget between $2,500 and $3,500 per year. A yearly premium for larger companies that require defence and indemnity insurance ranges from $3,000 to $20,000. Other policies vary depending on the policy term and account for 2 to 5% of total coverage.

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Both businesses and individuals benefit from copyright infringement insurance because it protects them from the liability of a claim and the payment of large compensations. When dealing with such large client companies, the professionals are always on the line, and copyright infringement insurance acts as a messiah during these crises.

As the number of copyright infringement cases rises, so do the monetary costs of each claim. Individuals and professionals should be aware of this insurance benefit and its benefits as soon as possible in order to protect themselves.

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