Article March 2, 2023

Intellectual property insurance for start ups and SMEs

Our new IPPE policy offers broad worldwide coverage including defence and pursuit enforcement, protection of loss of future profits and loss of IP rights.

This policy is perfect for start ups and SMEs. We’ve highlighted how IP exposures can easily occur and demonstrated how CFC’s IPPE policy would respond under each insuring clause.


Infringement defense

IP infringement can occur when IP is used, copied, or exploited without having permission from the IP owner. Anyone can be accused of infringing, but some allegations of infringement can be completely baseless or unfounded. Some companies use IP infringement allegations as a business tactic to protect their market. This an reduce the likelihood of receiving infringement allegations but cannot remove the risk of being accused entirely. IP insurance covers the costs of defense against infringement allegations and out of court settlements, or damages. Aside from infringement allegations, the defense cover can also include claims of entitlement by employees and certain elements of contract breach arising out of IP.

Invalidation challenges

All businesses should protect their work and investment by registering their IP. The process of registering IP to protect innovative and creative endeavours is costly, incurring registration fees, securing professional advice, and maintenance costs. An invalidity or revocation action is an attempt by a third party to challenge the validity of an IP right by alleging the right shouldn’t have been granted in the first place. Invalidation challenges from third parties are often an uninsured exposure, but it can be very costly to resolve unless there is IP insurance in place. CFC’s IP insurance covers legal costs and expenses incurred resolving an IP invalidation challenge.

Trademark oppositions

When a company makes an application to register a trademark, it is impossible to know whether the application is going to be of concern to other businesses. There are hundreds of thousands of businesses trading, and millions of trademarks currently in use worldwide. It only takes one individual, or business, to disagree with a proposed trademark application for a trademark opposition to be filed. Resolving this issue can cost thousands in legal costs, but IP insurance would cover this exposure.

IP title dispute

Creating IP (eg processes, products, brands) is usually a collaborative process, and this can mean disputes occur over the ownership of the IP. IP insurance covers legal costs and expenses incurred when resolving a dispute if the insured’s ownership of their IP is challenged by a third party, or any joint partners.

Infringement pursuit 

IP rights protect the intangible assets that are at the heart of every business. But there’s nothing to stop infringement occurring, it’s the IP owner’s responsibility to defend their IP and to take pursuit action. IP infringement litigation can be very costly, and not every business can afford to protect their IP by pursuing infringing third parties. Pursuit coverage provides legal costs cover for any costs incurred enforcing IP rights against third-party infringers.

Breach of contract pursuit

Every company uses some form of contract to provide services, products, designs, and more. Sometimes contract party may breach the terms of the contract and infringe upon IP. Businesses may engage in legal proceedings to rectify the damages incurred from the resulting infringement, but this can be costly, complicated, and time-consuming.

Loss of an IP right

If IP rights are revoked or invalidated because of infringement, this can leave IP owners with a huge hole in their business. CFC can reimburse fees that have been paid to register and maintain the IP right which is a reassurance for any small business.

Loss of future profit

The loss of future profit incurred due to the inability to use an IP right is a sizeable loss to a company’s activity, stunting its outlook. Within CFC’s IPPE policy, there is cover for the lost future income generated from the company’s business activities Recovering this expected future loss is an invaluable cover to SME businesses and can enable them to survive as an entity.


To find out more about CFC’s IPPE policy, please contact