Specialist insurance provider CFC has announced the release of a new product for licensing-agreement liability. The new product expands on CFC’s suite of insurance products for media and intellectual property.
The global licensing industry is worth an estimated $280 billion, and is rapidly expanding as brand owners increasingly monetize intellectual-property assets – including logos, trademarks, graphics and animations – through third parties.
However, the COVID-19 pandemic has forced many businesses to put plans on hold, and the financial impact of cancellation or rescheduling could have a catastrophic effect for promotional partners, licensees and businesses involved in merchandising, CFC said.
“Licensing agreements often include a mandated insurance requirement, but to date the market has struggled to deliver a bespoke solution, forcing clients to purchase a full-fledged media liability policy instead,” said Jade Gilstrap, media team leader at CFC. “We’re excited to offer a stand-alone product with cover that’s designed specifically for these licensing exposures.”
The new product is designed to protect licensees against unintentional breach of a licensing agreement, and covers individual licensing contracts or annual licensing agreements between multiple brands and the licensee. It provides coverage for breaches including selling in unauthorized channels or territories, incorrect usage or quality assurance breaches, and improper sublicensing, among other activities. It also includes coverage for intellectual property infringement in relation to the asset or assets specified in the agreement.
“There are numerous sectors where we see licensing activities as a core part of business, including sports, food and beverage, arts and entertainment, fashion, gaming and even corporate or institutional brands,” Gilstrap said. “While the long-term effect of the COVID-19 pandemic on license relationships remains to be seen, our product can help enable these businesses and provide peace of mind that they are protected while using third-party IP.”
