With car insurance claims easily being >100k due to injuries/death/multiple vehicle collisions, what kind of monthly rate could possible cover that?
Other examples with high claim amounts, flood insurance, health care, etc.
It doesn't matter how high the minimum cost is, and you cant judge any kind of insurance based solely on that. The chance of it happening is just as important. Let's say 1% of all companies get sued for patent disputes every year (I don't know the stats on this, just an example), with an average defense costing $500 000. The insurance company also wants to make money, so let's have them charge 150% over cost.
$500k x 1.5 = $750k (amount of revenue per 100 customers)
$750k x 0.01= $7500 (cost per customer per year)
$7500 / 12 = $625 (cost per customer per month)
Now even that number isn't that high, and I assume 1% of companies getting hit with patent lawsuit per year is bigger than the real figures.
Average cost of a claim and average claims per year are incredibly important.
Average cost of a car claim (ignoring glass) is probably in the $5,000 range. The average person gets in <0.5 accidents a year, so coverage is <$2,500 for the average person.
Average cost of a patent claim is, say $200,000 (that is a minimum, but we will treat it as an average). Average company gets 0.05 patent claims per year (1 in 20). Coverage would be $1,000 a month. Not too bad.
Now lets add what happens after the first time you pay out an insurance claim within 6 months. Someone in your company gets $200,000 for a client list, your patent claims per year just became 10 per client. Good luck.
Other examples with high claim amounts, flood insurance, health care, etc.
It doesn't matter how high the minimum cost is, and you cant judge any kind of insurance based solely on that. The chance of it happening is just as important. Let's say 1% of all companies get sued for patent disputes every year (I don't know the stats on this, just an example), with an average defense costing $500 000. The insurance company also wants to make money, so let's have them charge 150% over cost.
$500k x 1.5 = $750k (amount of revenue per 100 customers)
$750k x 0.01= $7500 (cost per customer per year)
$7500 / 12 = $625 (cost per customer per month)
Now even that number isn't that high, and I assume 1% of companies getting hit with patent lawsuit per year is bigger than the real figures.