Bitten by Big Claims, Intellectual Property Insurers Are Wary

Lawsuits arising from intellectual property infringement claims have the ability to devastate the bottom line of any company, Richard Reed, a vice president at Chubb, told BestWeek. Chubb is one of the few U.S. insurers continuing to offer comprehensive intellectual property insurance after the dot-com bubble burst.

Like Chubb, St. Paul Travelers Cos. revised its intellectual property offering in 2001, renaming it Internet liability protection. The revised product offered coverage against copyright and trademark infringement-related claims, but it excluded patents and trade secrets.

The move to provide only Internet-related coverage was driven by the fact that much of their policyholders' intellectual property exposures were moving into the Internet and e-commerce realm as opposed to being more media focused, Aaron Latto, director of market solutions at St. Paul Travelers' Global Technology Underwriting unit, told BestWeek.

Other exclusive content in the June 6 issue of BestWeek:

-- Why State Farm's new tiered pricing system for auto insurance could spark what one observer is calling "a technological arms race" among the top insurers.

-- How the looming State Modernization and Regulatory Transparency Act, a measure that some regulators fear would pre-empt state insurance regulation, could be putting a fire under state regulators just in time for the upcoming National Association of Insurance Commissioners Summer National Meeting.

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