Key Takeaways

  • Patent infringement insurance protects companies from both defending against infringement lawsuits and pursuing claims against infringers.
  • Policies can be defensive (covering legal costs when sued) or offensive (covering costs when enforcing patent rights).
  • Startups and high-growth companies often benefit from IP insurance, as litigation costs can be overwhelming and deter investors.
  • Coverage can include legal defense fees, settlements, damages, and business interruption losses tied to patent disputes.
  • Costs vary widely, with annual premiums often starting around $50,000 for $1 million in coverage, though newer carriers and programs are creating more affordable options.
  • Companies should carefully review policy exclusions and limits, as not all forms of infringement or international disputes may be covered.
  • Providers such as RPX, IPISC, and The Hartford offer specialized programs tailored for startups and established businesses.
  • Patent insurance can also serve as a financial asset, helping companies leverage IP rights as collateral for funding.

What Is Patent Insurance?

Patent insurance is coverage from patent infringement lawsuits when they are filed against a company. Standard policies could cover some of the needs, but patent insurance takes on the rest if there is a gap between the two.

What Is Intellectual Property Insurance?

This broad form of coverage works well when lawsuits are filed against companies for any patent-related reason, including intellectual property infringement of any kind. Both offensive and defensive patent and intellectual property insurance give companies the best protection possible. Startup businesses find intellectual property a huge topic to hurdle. New businesses find the questions confusing with the law reforms, patent trolls on the hunt, and content syndication. Insurance is a good way to curb risks, and there are plenty of policies that can help.

Why Patent Infringement Insurance Matters for Startups

Startups are particularly vulnerable to intellectual property disputes because they often build their value around unique ideas, technology, or branding. A single patent infringement lawsuit can cost hundreds of thousands of dollars, even if the startup ultimately prevails. This financial strain can deter potential investors, delay product launches, or even threaten the survival of a young company. Patent infringement insurance mitigates this risk by covering defense costs and, in some cases, settlements or damages. For startups seeking venture capital or strategic partnerships, having coverage in place can be a signal of sound risk management.

Defensive and Offensive Policies

Patent insurance allows companies to have offensive or defensive capabilities, unlike personal, media, or advertising liability insurance. Defensive policies act like regular insurance policies in that they allow the company protection when they have to defend themselves against a claim. Offensive policies, which are also called pursuit and abatement policies, cover costs if a company has to pursue another entity for infringing on a patent. Having both offensive and defensive patent and intellectual property insurance give companies the best protection possible.

What Patent Infringement Insurance Typically Covers

Patent infringement insurance policies vary, but most cover:

  • Legal defense costs if your company is accused of infringing another’s patent.
  • Damages and settlements that may result from litigation.
  • Enforcement expenses if you need to pursue an infringer to protect your IP.
  • Business interruption losses tied to patent disputes, including revenue losses while a product is pulled from the market.

Companies should review policies closely, as some insurers may exclude certain technologies, industries, or international disputes from coverage

Specialty Policy Limitations

While IP and patent insurance has a high price on it, there are not very many limitations. The limits are enough to scare some new companies away, but those that look into the opportunity close enough often see that the benefits outweigh the risks.

  • The policy costs range from $50,000 for limits as high as $1 million.
  • The long underwriting procedures can take a lot of time.
  • More carriers are getting into the market so pricing and underwriting are starting to come down, but this insurance is hard for new companies to grab with time and money flow limitations.

Practical Tips When Shopping for Coverage

Experts recommend businesses consider the following when evaluating patent infringement insurance:

  1. Scope of coverage – Ensure both domestic and international risks are addressed if your company operates globally.
  2. Exclusions – Look for carve-outs, such as willful infringement, prior knowledge of disputes, or specific industries.
  3. Policy limits – Balance premiums with realistic litigation costs; cases often exceed $1 million in expenses.
  4. Reputation of carrier – Work with insurers experienced in IP litigation and claims handling.
  5. Alignment with strategy – Choose between defensive-only coverage, offensive coverage, or a blended policy depending on your company’s IP strategy.

IP Enforcement Insurance policy of IPISC's Collateral Protection Insurance (CPI)

There is quite an advantage to copyrights, trademarks, patents, and IP rights within a company. They are not just policies that a company holds and may never need. The value can be monetized in the future, which can allow a company to grow. The IPISC Collateral Protection Insurance, otherwise known as CPI, can ensure the value of your IP rights for a number of years, which generally span up to three. The policy you hold along with your original IP are both financial assets that can help you get a loan by way of collateral. Companies don't have to give you equity to obtain funding when they use extra interest on the loan through the CPI premiums and fees.

RPX Offers Cost-Effective Patent Insurance for Emerging Companies

Companies interested in patent insurance need to know the costs and locations for such policies. RPX offers a number of options at cost-effective prices so new companies can enjoy the safety and security of insurance at a price they can actually afford. Many companies enjoy working with RPX because:

  • RPX Insurance Services LLC offers a backup plan from Lloyd's of London.
  • RPX holds an A rating, which is the highest option, and stands for excellent.
  • RPX allows policyholders to manage the cost of doing business against possible threats that could come along.
  • Any company in any state can get the coverage they need.

Advantages to Getting Patent Insurance Coverage

New companies could face large consequences based on the patent demands that are in place today. Litigation coverage for patents includes cost-effective insurance for companies that are new to the scene.

NPEs are also sometimes called patent trolls since they bring up the most patent litigation. Lawsuits filed by NPEs has increased in large numbers in recent years, according to a survey done by the National Venture Capital Association and the cost of these preparations can go well over $50,000 per case. Some companies have spent millions of dollars, and that doesn't even include the internal time they spend on the case.

Costs and Affordability of Patent Infringement Insurance

Patent infringement insurance premiums depend on factors like company size, industry, litigation history, and scope of coverage. Policies for established companies with broad coverage may start at $50,000 annually for $1 million in limits. Startups may find tailored programs with lower entry points through providers such as RPX or industry-specific programs. While the cost may seem high, it is often minimal compared to the potential multi-million-dollar expenses of defending or pursuing a patent infringement case. Some insurers now offer flexible plans for early-stage companies, reducing upfront costs while still providing meaningful protection.

Applying Online

Companies can complete an easy online application in a matter of minutes. Applications get responses quickly, and RPX could begin coverage in a matter of a few days.

If you need help with patent insurance, it is easy enough to contact the senior vice president of RPX Insurance Services by calling 866-779-7641 or sending mail to RPX Corporation, One Market Plaza, Steuart Tower, Suite 800, San Francisco, CA 94105.

Choosing the Right Provider

Several insurance providers now specialize in patent infringement insurance.

  • IPISC offers both defensive and enforcement policies, including collateral protection insurance that can help businesses leverage patents as financial assets.
  • RPX provides cost-effective group programs, making coverage more accessible for startups and small businesses.
  • The Hartford offers broad intellectual property protection tailored for companies in technology and digital industries.

When selecting a provider, consider the insurer’s financial strength, claims-handling reputation, and ability to adapt coverage to your company’s unique IP risk profile.

Frequently Asked Questions

  1. What is patent infringement insurance?
    Patent infringement insurance protects businesses against the high costs of defending infringement claims or enforcing their own patent rights.
  2. How much does patent infringement insurance cost?
    Premiums often start around $50,000 annually for $1 million in coverage, but costs vary based on company size, industry, and policy scope.
  3. Does patent insurance cover international disputes?
    Some policies do, but many exclude foreign litigation. Companies operating globally should confirm international coverage before purchasing.
  4. Who needs patent infringement insurance the most?
    Startups, tech companies, and businesses with IP-driven products or services benefit most, as litigation risks are high and can threaten survival.
  5. What’s the difference between defensive and offensive policies?
    Defensive policies cover costs when your company is sued for infringement, while offensive policies help you enforce your patents against infringers.

If you need help with patent insurance costs, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.