Aerial view of Dresden

Intellectual property secures competitive advantages for companies, but also involves risks. Violations of intellectual property rights are many and varied. Today‘s insurance solutions still come from the Anglo-American regions. German insurers are likely to be players in future.

Intangible assets are becoming increasingly important. Ten years ago, the names of the world‘s largest companies were Walmart, Exxon and BP. Today, they are Apple, Alphabet, Microsoft, Amazon and Facebook.

They often owe their success to new, IP-based business models. However, digitisation is leading to an increase in intangible corporate assets, even in companies with conventional business models. With its large number of patents, Germany holds a leading position worldwide. In addition to patents, intellectual property also includes trademarks, designs, copyright and trade/company secrets.

Market situation

On the one hand, this development offers great opportunities and is often vital when taking companies into the future. On the other hand, there are risks that threaten companies’ own assets, for example, through IP loss or other internal or external infringements of intellectual property rights – especially in cases where IP is a company‘s most valuable asset. A company‘s own, often unintentional, infringements of third-party IP rights can also have a massive impact.

16 %
of the value of intangible assets has so far been insured against possible loss.*

Frequently, practice shows that companies record patents by number, but not by value. There is often only an insufficient overview of strategic developments, both globally and among competitors – or none at all. This means that companies miss out on major development opportunities such as the use of their IP rights as collateral for investors in the case of corporate actions.

With lawsuits filed by competitors for alleged infringements of intellectual property rights at a high level, they are being used increasingly strategically to weaken competition. In extreme cases, companies acquire intellectual property rights with the primary aim of capitalising on them through legal action.


In Germany, IP insurance has long failed to receive the attention it enjoys in the USA or the UK. To date, attempts by German insurers to approach this subject have not been met with resounding success. It is therefore not surprising that the insurance products available today are almost exclusively from the Anglo-American legal area.

Many companies are now looking at their IP exposure. In the future, IP insurance solutions are set to play a major role in Germany, too. It is only a matter of time before IP insurers enter the German market.

Dr. Jochen Schuster

Along with greater competition – as is usually the case in the insurance market – rates are set to fall, terms and conditions extended and deductibles set to decrease.

Currently, limits of the order of up to EUR 250m can be obtained on today‘s active markets, depending hugely on the specific industry. In the lawsuit-prone bio-sciences and medical industries, significantly lower limits are being offered compared with those offered in the engineering industry, for example.

Market trends

IP losses often occur among companies in the competitive arena. A competitor (or other third party) alleges that the policyholder is infringing its intellectual property. This includes attacks by NPEs (non-practising entities, or “patent trolls”) whose business model is to professionally accuse others of infringing intellectual property. The attacked company intends to defend itself against this allegation. To do so, it has to analyse whether the allegation is true. This means inevitable legal defence costs. If the allegation is substantiated, further costs will be incurred. These may include licence fees, compensation payments or destruction costs. The costs and expenses incurred in this connection can be covered by an IP insurance policy.

Insurance cover can also exist the other way round if the company taking out the insurance wishes to take active action against infringements committed against it by third parties. IP insurance can also provide protection in a contractual sense, for example, when it comes to covering contractual indemnification obligations in relation to IP-relevant products. Insurance protection can also be tailored to cover an individual portfolio of rights or a specific individual case.

* 2019 Intangible Assets Financial Statement Impact Comparison Report. Global Edition. Sponsored by Aon. Independently conducted by Ponemon Institute, LLC. April 2019, p4