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
7. Exclusions to PAI coverage
Finally, the claim must fall outside of all the exclusions listed in the policy, and that list will vary considerably from one policy to the next. Some of the more common exclusions include:
- Knowing violation of another’s rights
- Claims arising out of material that was first published prior to the start of the policy period
- Criminal acts committed by or at the direction of the insured
- Claims arising out of the failure of the your goods or services to conform with any statement of quality or performance made in the “advertisement”
- Claims arising out of breach of contract
- Infringement of copyright, patent, trademark or trade secret
This last exclusion, known as the IP exclusion, can be confusing. It generally bars PAI coverage for claims arising out of the infringement of the four listed types of IP rights, or infringement of other intellectual property rights. However, the IP exclusion is not quite as broad as its name implies. It might not bar coverage for those claims that fall under one of the two enumerated offenses mentioned in the first section above for IP-related claims. You should consult with your coverage attorney to understand the terms of your policy.
