Does Your Insurance Cover Trademark Litigation?
If your company is ever sued for trademark infringement, do not forget to check your company's insurance policy to see whether such litigation is covered. Many people do not realize that a standard Commercial General Liability (“CGL”) insurance policy often covers trademark infringement litigation. The form CGL policy, upon which most insurance companies base their policies, covers “advertising injury,” and trademark infringement is generally considered to be an advertising injury.
However, many policyholders do not realize that trademark infringement may be covered under their policy. Therefore, they fail to make a claim and take advantage of their coverage. Of course, individual policies vary, so it is important to check your company's policy in particular to determine whether trademark infringement is covered.
If trademark infringement is covered, your company can save a significant amount of money just by promptly checking the terms of its insurance policy and making a claim early in the trademark infringement litigation.
The form CGL policy generally does not cover patent infringement, as patent infringement is not considered an “advertising injury.” This is because the injury is based on the infringement, not the advertising. However, many insurance companies offer patent infringement coverage, either as an endorsement to a CGL policy or as a separate policy.