Intellectual Property (IP) Insurance provides protection in two critical ways. It will protect your patents and trademarks from others infringing on them and it will defend you if you are sued for infringing on patents and trademarks of others. If you are in the cannabis industry and manufacture a product, IP coverage would be very smart to consider. You could be making patented edibles, vapors, infused product or a number of ancillary products that could be financially desirable for others to replicate. Many times the most valuable asset of a product based business is the patent(s) around that product.
Fighting intellectual property suits can be extremely expensive which is one of the primary reasons to purchase this coverage. A good policy has a duty to defend your business even if the case has little to no grounds. IP insurance can be expensive, but not having it can put you out of business. Most policies will start at $10,000 per year. Underwriting IP coverage can be time consuming and costly. IP insurance companies may hire an attorney in advance to research your patent to be sure it is not infringing on others or being infringed upon. Some carriers may charge a retainer in advance of placing coverage just to provide this underwriting research.
Standard General Liability and Product Liability policies will typically have exclusions for intellectual property liability. You can't rely on your business package policy to help you in IP related claims. IP coverage is something many businesses consider when it's too late. If you have products that need protection, look into coverage early to protect your business. Early coverage can also help with the insurance costs. For more information on protecting your cannabis business and products, please contact our office. We work with the best IP insurance carriers and have experience in securing this vital line of coverage. We want to be sure you succeed, not your imitators.