Insurance exists to protect against dangers, but given the potentially high stakes, manufacturers should have some understanding of what is covered, what is not, and what are the basics to making an insurance claim.
Dale R. Kurth, Counsel at Partridge IP Law
3. Conduct must be during the policy period
The focus here is on when the insured’s conduct actually happened, not when the plaintiff’s injury took place, which can be at a later time in some cases. Your policy period will be shown in the policy’s Declaration pages.
4. Offense must be committed in the “coverage territory”
CGL policies issued in the U.S. generally cover offenses that take place in U.S. territories and possessions, Puerto Rico and Canada. Other parts of the world may also be included in the “coverage territory” if the plaintiff’s claim arose out of goods made or sold in the covered geographic areas. The policy may also apply to a covered offense committed on the Internet, provided that the plaintiff filed a lawsuit against you in the “coverage territory.”
5. Offense must arise out of your business
The qualifying offense must also be alleged to have arisen out of your business activities, rather than personal conduct.
6. The claim must seek “damages”
The term “damages” is usually not defined in the policy, but is construed to mean some form of monetary award to compensate the plaintiff for his losses. A lawsuit asking the court only to impose an injunction on you, for example, will generally not be covered. Sometimes a claim that seeks payment of legal restitution, such as by disgorging profits alleged to have been derived by you from wrongdoing, can also be considered to be “damages.” Indeed, recovering an infringer’s wrongful profits is a legal remedy specifically allowed in many cases of copyright infringement and trademark infringement.
