AI Boom Spurs Surge In IP and Copyright Insurance In India | Banking and Finance News

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The AI revolution is rewiring India’s economic landscape at a breakneck pace. With Fintech, IT, media and entertainment, HealthTech, EdTech, Indian businesses are rapidly rewiring their businesses using AI. Along with this innovation is a wave of increasing legal ambiguity. As businesses are using AI to create content and products, they are finding themselves more and more embroiled in intellectual property (IP) and copyright disputes, leading to a significant rise in demand for IP and copyright insurance in India.

Machine-generated content frequently relies on huge datasets which might contain copyrighted work, and so the danger of accidental infringement becomes high. Indian EdTech sites utilizing AI for creating interactive modules of study materials are facing criticisms regarding duplications of pre-existent curriculum content, for example. Likewise, music or scripts developed through AI have the chance of replicating copyrighted material without noticing it. These are leading to legal concerns, considering the law in India for AI-created content is still under-developed.

To cover this risk, Indian businesses are increasingly taking out IP and copyright insurance. Policies are designed to cover a range of scenarios, from defending infringement claims to enforcing one’s own IP rights. A company that is found to be using copyrighted content without permission can incur enormous amounts on legal fees even if the complaint is later dismissed. Copyright insurance steps in to cover such fees, including court fees, settlements, and damages. It also provides protection against infringement on a company’s own IP, including reimbursement for enforcement costs like cease-and-desist letters or litigation. Where patents or copyrights are contested or invalidated, some policies also give compensation for the loss of asset value that occurs.

IP-intensive sectors are growing at twice the rate of the rest of the economy. Patent filings are rising more than 12% annually, while the rise in copyright filings demonstrates a growth in online content production. As a consequence, this also translates into an unprecedented jump in litigation. Indian courts resolved more than 35,000 IP-related matters alone in the year 2022. Start-ups, and especially tech start-ups and media start-ups, end up being part to such conflict of rights, sometimes as defendants and sometimes as claimants. Either way, legal action can be expensive without insurance cover. Although still in its early stages, India’s IP insurance market is expanding at a fast pace. Compared to mature markets in the West, Indian firms are only beginning to embrace it.

The growth is fast, industry projections show IP and copyright insurance in India is growing at a CAGR of 25–30% every year, driven by the digital revolution across the board. As businesses like software development, pharma, and entertainment become more and more dependent on AI and intangible assets, protection from IP risks become inevitable.

While digital transformation speeds up and enterprises are more and more data-driven, the threat environment is also rapidly changing. In addition to IP and copyright concerns, companies using AI solutions also have to worry about the ever-increasing threat of cyber events—ranging from data theft to ransomware. Cyber insurance has also become another vital layer of security for Indian enterprises riding the AI wave. These policies include coverage for financial loss as a result of cyber-attacks, data breaches, business disruption, and the recovery and notification process costs.

As AI systems tend to become both high-value targets and conduits for sophisticated cyber-attacks, cyber insurance policies not only mitigate the monetary impact of such attacks but also give access to expert help with incident response as well as regulatory compliance. The intersection of copyright, IP, and cyber insurance enables companies to more effectively protect their digital properties and customers’ trust, promoting resilience in the face of the fast-evolving nature of AI technologies.

Insurance provides a buffer that allows firms to innovate without the constant risk of interruption by the law. It supports experimentation and taking risk, therefore skills are essential to innovation in the era of AI. As India emerges as a global innovation hub, insurance’s role in protecting intellectual property will grow stronger. The revolution in AI is not only altering the way we build and make; it is redefining what businesses must do to thrive and survive.

Authored by Manoj Rane, Senior Vice President Placement and Underwriting (Liability Lines), Alliance Insurance Brokers

The views expressed in this article are those of the author and do not represent the stand of this publication.