What Happened
Patent litigation costs hundreds of thousands or millions of dollars. Patent litigation insurance can cover those costs—for a premium. The market has grown in recent years, with more carriers offering more products.
Why It Matters
There are two main types: enforcement insurance (covers costs of asserting your patents) and defense insurance (covers costs of defending against infringement claims). Some policies cover both.
For small companies, enforcement insurance can level the playing field. Without it, you might not be able to afford to sue infringers. With it, you can enforce your rights even against deep-pocketed defendants.
For operating companies, defense insurance provides budget certainty. You pay a known premium instead of facing unpredictable litigation costs. That's valuable for financial planning and investor confidence.
But insurance isn't cheap. Premiums range from tens of thousands to hundreds of thousands of dollars annually. Policies have limits, deductibles, and exclusions. Insurers underwrite carefully—they don't insure weak patents or high-risk companies.
What You Should Know
If you're considering patent insurance, shop around. Different carriers offer different terms. Work with a broker who understands IP insurance specifically.
Read the policy carefully. What's covered? What's excluded? Who controls the defense? What are the settlement rights? These details matter.
Insurance isn't a substitute for good IP strategy. But it can be a valuable risk management tool, especially for companies where patent risk is material.
The market is maturing. Products are improving. For the right company, patent insurance makes sense.