Insurance Companies are Increasingly Excluding Coverage for Copyright and Trademark Infringement Actions
Most companies obtain one or more insurance policies to help limit the company’s risk. A commercial general liability policy (or “CGL policy”) is arguably the most common insurance policy that companies obtain. CGL policies are often thought to provide broad protection to a company for various risk factors. This coverage includes things often outside the company’s control (e.g., things that happen just because the company is “in business”). Many companies rely on these insurance policies to provide coverage to defend against frivolous lawsuits, including those brought by trademark and copyright “trolls” whose primary purpose is to make money through litigation. Without insurance coverage, a company that is met with a (threatened) lawsuit is left to pay extensive attorneys’ fees for a legal defense, and/or must concede to the extortion of the plaintiff (which usually entails paying for a settlement, plus relinquishing other rights that negatively impact the company).