Complexity of subject makes buying insurance challenging, said Miller
Despite the growing importance of intellectual property assets, only 28% of risk managers said that their companies were currently buying insurance to protect them, according to Miller.
‘Intangible assets now account for around 75% of a company’s value. Simply put, we are a far more knowledge-based economy than ever before,’ commented Greg Collins, director of professional risks at Miller. ‘Despite this, we are not surprised to see this low level of take up of insurance cover for these assets, in particular the intellectual property owned by a business. While IP is clearly maturing fast in terms of value and importance, it is often overlooked as it can be a complex subject area that requires specialist advice.
‘Another reason for the low level of take up for this form of cover is that many companies leave their IP strategy and decisions to the legal team. Our survey showed that in almost half of cases it is the legal or patent team who is responsible for the protection of IP exposures. However, as the value to businesses of these assets increases we believe a more holistic approach is required, with a combination of skills from risk management, the head of legal, the CEO and other parts of the business. Encouragingly, some companies are beginning to embrace this concept since around 28% of respondents said that management of intellectual property matters was a joint effort between risk management, legal and patent departments.
“The risks to a business from IP exposures are many and varied.
Greg Collins, director of professional risks at Miller
‘The risks to a business from IP exposures are many and varied. For example, supply chain issues surrounding the effective management of relationships with suppliers and manufacturers, and merger or acquisition activity when the management and protection of IP, both from the perspective of the buyer and seller, is crucially important. Despite this, only 40% of our respondents said IP risks were considered to be a business critical issue.
‘We believe that this is because IP is often seen as an issue that only really affects high tech industries. However, the simplest of objects can hide a number of IP issues, and it is as important for companies to ensure that they do not infringe on the rights of others, as it is to control their own IP exposures. By focusing on this topic at AIRMIC we hope we have raised some questions in the minds of risk managers and their employers and opened their minds to the options available within the insurance market.’
Miller conducted a survey of attendees at the AIRMIC 2008 conference in Edinburgh.