Renters insurance covers theft of your covered property. That’s commonly understood, and theft is one of the perils that is named in the policy. But what is covered property? Would that include your intellectual property? If you have Charlottesville, VA Renters Insurance and someone steals your idea, your writing, or a creative work can your insurance reimburse you for the intellectual property theft?
No. Intellectual property theft is not covered by renters insurance.
Personal Property Is Tangible
Personal property, as defined in and covered by the policy, is tangible. Intellectual property is not something you can touch or hold. By definition, it’s something that’s created by and from your mind. Intellectual property lacks the inherent ability of personal property to suffer direct physical loss or damage.
Direct physical loss or damage from perils named in the policy is exactly what your renters insurance policy is protecting your property against. Property that can’t be impacted by that type of loss is not covered. As a result, intellectual property theft is not something your renters insurance would respond to.
Intellectual Property Frequently Does Not Belong To An Individual
While there are certainly many exceptions, IP often is the property of a business or business entity of some sort. Whether you’ve incorporated to protect yourself from the risks of your idea or to protect your idea, that’s clearly a business. If you make or endeavor to make more than a very small threshold of money from your IP in a year, it’s a business pursuit. Renters insurance is designed to cover individuals, not businesses.
If it belongs to a business, it’s not covered by renters insurance. Intellectual property owned by a business would not be covered property, and so its theft would not be a covered loss.
Renters Insurance Covers Specific Things
What does renters insurance cover? The perils listed in the policy, and generally only those perils. Examples include fire, theft, and vandalism. Theft, of course, is limited to covered property. While there are many other perils listed in the policy, none would apply to intellectual property.
Those perils named in your Charlottesville, VA Renters Insurance also apply only to tangible personal property, so the types of covered loss are irrelevant to intellectual property.
When Is A Theft Not A Theft?
What’s commonly referred to as theft of intellectual property is actually more frequently something else. From a technical standpoint, there are likely to be patent, copyright, or trademark concerns that form the basis of the actual loss. These losses are also often difficult to quantify. If you were a large business, could you insure against that risk? Most likely. As an individual, the risks involved with someone stealing your intellectual property are generally minimal.
The value of an idea is minimal. Execution is where you get value. Once you begin to execute, you’re likely engaged in business pursuits. You probably have legal counsel to advise you on intellectual property concerns. You also likely have business insurance, or you should. Your renters insurance policy just isn’t going to cut it once you’re engaged in business.
If A Computer With An Idea On It Is Stolen, What Does Renters Insurance Replace
If a computer containing your ideas is stolen, what exactly will renters insurance replace? The computer, of course, would be replaced. That’s tangible personal property. It would generally be covered at replacement cost to get a new, current computer of like kind and quality. The disk drives would be replaced, and commercial software products which you verifiably own and had legitimately installed on the computer could also be replaced.
What’s not replaced is the work product on the media. Media is replaced with blank media of like kind and quality – DVD disc for DVD disc, for example. Your work product is not something that can be valued or replaced. Whether you have ideas or your Ph.D. thesis on there, renters insurance will not replace the intellectual property of your work product. There would be no practical way to do that.
The lesson here, of course, is to back up your work product. Computers can be replaced, your work cannot.
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