Liberty Specialty Markets (LSM), part of Liberty Mutual Insurance, has launched a new product that aims to prevent contract negotiations between businesses stalling because of concerns relating to intellectual property (IP).
LSM’s Intellectual Property Contractual Liability Insurance has been designed to provide a solution for IP indemnification issues that could otherwise delay or terminate a potential contract. The product is based on LSM’s existing IP insurance, but has been streamlined to speed up the application and underwriting process. The product covers in-licensing and out-licensing – both the sale and purchase of the right to use a product or service. It will be underwritten by LSM’s IP team in London and be available globally.
Camilla Walker, LSM’s Underwriter, said: “This product is relevant to any contract in which intellectual property is addressed, across a wide variety of sectors including engineering, technology, packaging and software development. Effectively, it indemnifies a business against IP-related disputes that could arise based on products or services provided under a contract or licencing agreement. The requirement to provide this indemnification within contracts is something we’re seeing much more frequently.
“Businesses want to be confident that if they license a product or service, it won’t result in them incurring significant costs defending a claim for infringing a third party’s IP. The usual solution is to ask the vendor to indemnify the purchaser, but that indemnity is not always forthcoming. That’s why we’ve developed this product to provide specific, lower cost coverage for just these situations. As importantly, we’ve streamlined the product so that it’s a quicker application process. Speed is clearly an important factor during contract negotiations.
“The coverage acts as a business enabler, giving clients the opportunity to enter into revenue generating deals they otherwise would not have been able to, or to negotiate better terms and conditions within contracts through settling the issue of IP indemnification in this manner.”
The product provides for legal fees, expenses and damages incurred in defending legal proceedings relating to infringement of IP. This could include an IT business licensing the rights to use a piece of technology, but then being sued by a third party claiming that through its use of this technology it is infringing the third party’s IP rights.