How to Protect Against Intellectual Property Issues

Your building is protected from certain risks by property insurance; your employees, by workers’ compensation; and your vehicles, with commercial auto insurance. But what about risks associated with your business’s intellectual property (IP)?

Most business owners know protecting IP is crucial; one of the best ways to do so is with IP insurance. But how exactly does it work?

What is intellectual property? There are four types of IP (with definitions courtesy of Investopedia):

  • Trademark: “A symbol, word, phrase, logo, or combination of these that legally distinguishes one company’s product from any others. Any infringement on a trademark is illegal and therefore grounds for the company owning the trademark to sue the infringing party.”
  • Copyright: “The ownership of intellectual property by the item’s creator. Copyright law gives creators of original ideas, art, etc. the exclusive right to further develop them for a given amount of time, at which point the copyrighted item becomes public domain.”
  • Patent: “A government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time.”
  • Trade secret: “Any practice or process of a company that is generally not known outside of the company.”

What does IP insurance cover? There are two types of coverage to help in the event of alleged IP infringement. One pays the costs of your legal defense if someone claims you stole their IP; the other, the cost of suing someone you believe has infringed upon or stolen your IP.

For businesses centered on ideas or inventions, IP insurance to protect them is essential. Typically, commercial general liability policies exclude IP coverage. Sometimes available as a policy provision, and commonly paired with Errors and Omissions (E&O) policies, there are also stand-alone IP insurance policies.

Who needs it? Any company whose core business is the development of new products should have IP coverage.

For larger businesses, IP insurance is essential because of turnover. Patents can easily expire without anyone noticing, typically after 20 years. IP protection through constant and proper IP designations (think © and ™) is a good preventive measure, but IP insurance functions like liability protection.

All companies should consider IP insurance to protect against claims, especially small businesses, since they are more vulnerable to the costs of legal defense expenses or judgments, where damages can run from $650,000 to $5 million.

Finally, all businesses face employee IP theft risks.

Do you need IP insurance if you’ve correctly registered IP and know your idea is original? If accused, you’ll need to prove ownership of your IP, and IP insurance can help fund the expenses to do that without unneeded and unjust financial strain.

How do I obtain coverage? You must know you haven’t infringed upon anyone else’s IP and be able to prove you’ve conducted an IP search and filed patents, copyrights, or trademarks. You also can’t have any claims or lawsuits filed against or by you.

Contact your commercial insurance advisor to help you navigate the issues around IP.

‘Do I Need Workers Compensation’ And Other FAQs

If you’re considering starting a business, it’s important to have a comprehensive insurance package to protect your investment. Workers’ compensation is a type of insurance that provides protection not only for employees, but for the employer as well. Here are some frequently asked questions (FAQs) about workers’ compensation:

Do I have to purchase workers’ compensation? It depends on where your business is located. Many states require you to purchase workers’ compensation insurance if you have one or more employees; state laws also determine benefit amounts, provider options, and claim limits.

How does workers’ compensation protect employees? If an employee is injured while working, workers’ compensation helps handle the resulting medical bills and pays for lost wages. If an employee is killed on the job, workers’ compensation will provide benefits to dependents.

How does workers’ compensation protect employers? When employees use the workers’ compensation benefit, they automatically relinquish their right to sue you.

What if I have multiple businesses in different states? You’ll likely have to consult each state’s requirements to ensure that your policy is meeting standards all around. Your commercial insurance agent can help ensure your employees are covered no matter where they’re working.

How can I avoid workers’ compensation fraud? Questionable claims are on the rise. Protect yourself by hiring good employees and using background checks. At work, create a safety program, and ensure you communicate workplace best practices and benefits.

4 Myths About Rental Insurance And Why They’re Wrong

When buying a home, you must buy homeowners insurance to satisfy mortgage lenders. But when you’re renting, it’s different. Many landlords don’t require renters insurance, so many renters just go without. According to the Insurance Information Institute, “only 35% (of renters) have insurance.” Why? Well, it might have something to do with these four myths:

Myth #1: “My landlord’s insurance will cover damages”: A landlord’s insurance policy will provide coverage for any damages that occur to the building, but not to your possessions.

Myth #2: “My possessions aren’t valuable”: Many renters sell their possessions short. Add up what it would cost to replace everything you own. Chances are it will amount to thousands of dollars. And while your furniture may be old, you’ll spend big bucks replacing it (not to mention your electronics). Renters insurance can help cover losses after a disaster.

Myth #3: “Renters insurance is too expensive”: The amount of renters insurance you purchase is your call. But you’ll want to purchase enough to cover all your belongings, and that can be considerably less than you might expect.

Myth #4: “I don’t need liability coverage as a renter”: If someone injures himself or herself in your apartment, you could be sued. Renters insurance will cover your legal expenses, as well as medical bills, in this situation.

As with homeowners insurance, not all renters insurance policies are equal. Talk to your insurance agent; he or she will explain different policies and help you select the one that’s best for you.

Smart Homes May Lead to Reduced Premiums

When the auto industry introduced smart cars, the insurance industry had to figure out how to insure them.

Luckily, engineers intended smart cars to be safe cars. Recently, the 2014 Smart Fortwo and the Scion iQ received “Good” scores in three out of four crashworthiness tests conducted by the Insurance Institute for Highway Safety (IIHS).

This certainly makes drivers and insurance agents happy, but smart technology isn’t limited to the roads. One of the next innovations many people want to take advantage of is smart homes.

According to a survey recently conducted by Harris Poll for Lowe’s, most Americans crave the ability to control things in their home by accessing their phone. Sixty-two percent of those polled felt that a smart home was crucial for “monitoring safety and security.”

Cranky morning jokes aside (e.g., How does turning on your coffeepot from the comfort of your bed make you safer?), some smart home features are designed for convenience and others for energy efficiency.

Is the ability to remotely adjust the coffeepot or the thermostat likely to impact your insurance? Probably not.

However, some smart home features will. In fact, your insurance rates may drop significantly if, for example, your home comes equipped with moisture sensors located near sinks and toilets (think flood avoidance).

Or, what if your built-in security system is able to notify you via a phone app as soon as something goes wrong at home, such as a break-in?

Other apps allow you to lock your door from afar. And Nest-a company heavily involved in designing smart technology-has just released an advanced fire alarm that alerts you at the first sign of smoke and senses carbon monoxide.

If you’re considering purchasing a smart home or making smart upgrades to your current home, don’t forget to notify your insurance agent. It saves to be smart.

How Much Do You Know About Life Insurance?

Of the 35 million American households without life insurance, 11 million include children under age 18, according to LIMRA, an insurance industry research organization.

That’s strange, because providing for one’s children after one’s death is considered a classic use of life insurance. It’s a situation that may be the result of misunderstanding how life insurance works. Think you know a lot about life insurance? Try our quiz to see if you’re right.

1. What is life insurance used for?

(a) Providing for a loved one financially after your death.
(b) Estate planning.
(c) Both of the above.

2. What percentage of consumers say most people need life insurance?

(a) 95%
(b) 85%
(c) 62%

3. What percentage of consumers say they have life insurance?

(a) 84%
(b) 62%
(c) 51%

4. What percentage of Americans who have life insurance don’t think they have enough?

(a) 90%
(b) 50%
(c) 40%

5. Which is not a type of life insurance?

(a) Term life
(b) Whole life
(c) Partial life

The percentage of American households with individual life insurance has hit a 50-year low, thanks in part to high unemployment and confusion over products. But life insurance is an important part of your overall financial plan and shouldn’t be overlooked. Your insurance agent can help you determine if you need a policy, and if so, which type of coverage and how much you need for your individual circumstances and goals.

(Answers: 1c, 2b, 3b, 4c, 5c.)

Are You One of 4 Million Facing Health Tax Penalties?

Most Americans had until March 31, 2014, to begin the enrollment process in health coverage under the Affordable Care Act of 2012. To help ensure consumers would take the need to purchase health care seriously, the Act set out tax penalties.

Tax preparer H&R Block estimates the majority who remain uninsured after the deadline will qualify for penalty waivers. However, you may be one of the four million uninsured the company believes won’t qualify for a waiver and will face a tax penalty this year.

Penalties

What is the penalty for going without insurance? Penalties start small but increase each year. The penalty for tax year 2014 is 1% of adjusted gross income (AGI) or $95 per adult and $47.50 per uninsured child, whichever is higher. In 2015, the penalty increases to $325 per adult or 1% of AGI and $162.50 per child. And in 2016 it will rise to 2.5% of AGI or $695 per adult, with an additional $347.50 per child. High wage earners face additional tax implications.

Waivers

Exceptions to penalties may apply if you missed the open enrollment deadline. Triggering events such as a job loss or a divorce may allow you to enroll after the open enrollment period. In addition, if you qualify for Medicaid in your state, you can enroll at any time.

To avoid tax penalties, and to have peace of mind concerning your health, talk to your insurance agent. Healthcare coverage may prove to be more affordable than you think.