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
Invoking Coverage
When you find out about a claim against you, do not ignore it. Time is of the essence. You must act promptly to preserve your right to any insurance coverage that may exist.
First, consult with your insurance broker or other professional to identify all the policies you have that might have potential coverage for the claim.
Second, notify all those carriers whose policies potentially cover you that a claim has been made, and tender the claim to those insurers for defense. This should be done in writing. To preserve coverage that might otherwise exist, you must comply with all policy conditions, particularly the notification requirements. Policies usually say that the insurer must be notified of a claim or lawsuit “as soon as practicable” or “immediately.” Those terms are most often construed to mean within a reasonable time. But in some circumstances, allowing even a very short period, such as two or three weeks, to elapse before giving notice to your insurer could be considered to be an unreasonable delay. Coverage can be lost completely due to late notice, so always treat the receipt of a third party claim or lawsuit seriously and promptly.
Third, make sure you comply with all other conditions of the policy. For example, most liability policies include a cooperation clause. This requires you to assist the insurer in defending the claim, such as by producing relevant documents and information.
NOTE: This article offers only very general guidance on the IP-related coverage available in a typical commercial general liability insurance policy. However, insurance coverage for a particular claim depends on your individual policy, your state’s law, and several other factors. Given the complexity of the issues, readers are encouraged to review the details of your coverage with your insurance specialist and your legal counsel.
Dale R. Kurth is Counsel at Partridge IP Law, a Chicago-based IP law firm. He has a wide variety of experience in IP, including dealing with claims for infringement of copyrights, patents, and trademarks, as well as experience in ascertaining insurance coverage for those and related claims. Kurth can be reached at dkurth@partridgeiplaw.com.
