What You Should Know About Game Development Company Insurance

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As a games developer, you operate on the leading edge of technology that often forms the blueprint for more mainstream applications. Writing the future of technology and pushing the boundaries of creativity, however, leaves you vulnerable to litigation and accusations of Software Copyright and Intellectual Property infringement. Game development insurance can help protect you from those exposures as well as other risks that all businesses face.

Video Game Developer Insurance
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Litigation Faced by Game Development Companies

If you visit Game World Observer’s ‘Notable Lawsuits’ page, you’ll find lawsuits against game developers including this one:

“Back in 2014 Capcom, the Japanese publisher and game developer accused its competitor Koei Tecmo of infringing two of Capcom’s patents, one of which had to do with controller vibration in proximity of an adversary, and the other – with different modes of video game content import. It was alleged that Koei Tecmo unlawfully employed the technologies in 49 video games, making about 93,000,000 U.S. dollars.

The district court of Osaka ruled in 2017 that Koei Tecmo infringed only the first patent, once, and awarded 50,000 U.S. dollars to Capcom. The publisher appealed.

In September 2019 Intellectual Property High Court in Tokyo agreed that Koei Tecmo used both patented technologies as part of its games, and increased the award to 1,500,000 U.S. Dollars.”

You’ll also find lawsuits against video game developers for the following:

  • Copyright infringement for music, software, characters, scripts, tattoo art, dance moves and graphic interface
  • Trademarked name violations 
  • Data and information leaks
  • Gambling violations for loot boxes
  • Blocking user accounts
  • The infamous case brought by a Montreal law firm against Epic Games because of Fortnite’s ‘addictiveness’

Think it’s unlikely to happen in the games industry in Canada? The gambling violations levelled against EA, Blizzard and Valve took place in Belgium and serves as a reminder that potential liability crosses borders and oceans as your games do.

Game Development Company Insurance Coverages

Commercial General Liability Insurance protects your video game development company from legal claims of personal injury, property damage, false advertising, libel/slander and more. For example, Commercial General Liability insurance can cover lawyer’s fees, defence costs, out-of-court settlements and awards for damages if a client is injured while on your property or if you injure them on their property. Commercial General Liability insurance can also include Copyright Insurance For Intellectual Property to defend you against IP claims and to enforce your rights against infringers.

Liability Insurance policies are also available for technology-specific businesses like game development companies. Made for businesses that provides services and products that are in the form of software, computer hardware, consulting and other data-related services to businesses and/or individuals in mind. Consider purchasing Liability Insurance tailor-made to your unique business needs.

Errors & Omissions (E&O) / Professional Liability Insurance – This type of insurance covers you for lawsuits alleging that your clients suffered losses due to your errors, negligence or associated with services and development work you are doing for others.

Cyber Liability & Privacy Insurance can cover the costs of a breach including losses sustained by third parties affected by a breach, costs to repair systems and data and notification costs.

Property Insurance protects your building and contents such as computers, consoles, mobile devices, office equipment and other assets owned by your video game development company in case of fire, flooding, burglary and other perils. Your business may also need:

  • Business Interruption insurance coverage to replace lost income after an insured peril; and 
  • Extra Expense insurance coverage to cover the costs of setting up a temporary location for your game developer business. 

Video Game Developer Insurance FAQ

Why do video game developers need insurance?

Video game developers need insurances due to the varied and serious nature of the potential exposures they face. Video game developers are vulnerable to being accused of copyright and intellectual property infringement due to the nature of this rapidly evolving industry. Being at the forefront of the gaming industry means breaking new ground, and unfortunately, that can sometimes mean greater risk.

Video game developers need insurance to protect them from potential lawsuits associated with their work that would require potentially large payouts. Even a small claim can have a large impact on an individual’s livelihood.

What kind of insurance does a video game developer need?

The main coverage video game developers need is protection against possible copyright infringement and trademark violations. They also have to protect themselves against data and information leaks related to new game software and other gaming perils that could include everything from accusations of leading users to gamble or causing gaming addiction. Additionally, video game developers and development companies have to protect themselves against potential claims for property damage or bodily injury related to their products or accusations that losses have been suffered as a result of a video game product.

Protecting property is another consideration, both physical property like computers to online property like stored data. There are a variety of potential risks faced by video game developers that can be addressed with the right insurance package.

How much does a video game developer insurance cost?

There are several factors that will influence the cost of insurance for a video game developer. The factors that will be analyzed include the type of work being performed and in which industry, the scope of your operation, projected annual revenues, the amount of personal user data that is being accessed by your video game product, and how many staff are working with you on your video game development.

Depending on the coverage you require and what package you choose, you will likely pay between $650-$2,000 per year for insurance for a smaller operation. But the best way to determine your video game developer insurance cost is to speak with an ALIGNED advocate who can analyze the particulars of your situation and determine the best coverage for you.

Get ALIGNED With the Right Game Development Company Insurance

With ALIGNED you get an advocate working with Canada’s top insurance companies to find you comprehensive game developers insurance policy that covers your liability risks at affordable rates – saving you time, money and the hassle of shopping for the right coverage. Contact an ALIGNED advocate to get a free quote on game development company insurance in minutes.

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