Patent Insurance — FTO Search Requirements

Research by Max · February 21, 2026 · Context: Provisional patent filing, prior FTO desktop search showed LOW risk

TL;DR

Patent infringement insurance providers almost universally require a formal FTO opinion letter from a licensed patent attorney — not just a search report from a patent search firm. A $500–$2.5K search-only report will likely not satisfy insurance underwriting requirements.

Recommendation: Get insurance quotes first (free), then pursue a targeted attorney opinion on the 2–3 highest-risk patents from your existing search, estimated $2,000–$5,000.

1. The Critical Distinction: FTO Opinion vs. Search Report

Aspect	FTO Search Report	FTO Opinion Letter
What it is	List of potentially relevant patents + basic infringement analysis	Formal legal document from licensed patent attorney
Cost range	$500–$2,500	$6,000–$50,000+
Legal weight	Informational only	Can be used in court to defend against willfulness claims
Insurer acceptance	Generally NOT accepted	Required by most major insurers

What Insurers Specifically Require

Based on research across multiple insurance sources:

Favorable infringement opinion letter from qualified IP counsel addressing:
- Enforceability of third-party patents
- Validity of third-party patents
- Non-infringement by your product
Opinion must conclude likely non-infringement — typically requiring a 51%+ probability of success if challenged
Written to "standards of the profession" — meaning from a licensed patent attorney, not a search analyst

"The Named Insured shall...supply...a current FAVORABLE INFRINGEMENT OPINION letter written to the standards of the profession which sets forth the relevant claim, claims or protected rights of the patent, trademark, or copyright alleged to be INFRINGED and rendering an opinion of non-infringement favorable to the Named Insured."

— AIPLA (American Intellectual Property Law Association)

2. The $500–$2.5K Options — What You Actually Get

Patent Search Firms (Search-Only, No Legal Opinion)

Firm	Typical Cost	What You Get
PatSnap	$1,000–$3,000	Patent landscape, infringement analysis, but no legal opinion
MaxVal	$800–$2,500	FTO search with detailed report, claim charts
Cardinal IP / Landon IP	$500–$2,000	Comprehensive patent search + infringement assessment
Clarivate (Derwent)	$1,500–$4,000	Professional search with analytical report

Insurer acceptance: Likely not sufficient for standalone FTO requirement, but useful as supporting documentation for underwriting.

The Sweet Spot: Targeted Attorney Opinions ($2,000–$5,000)

An independent patent attorney can provide a targeted opinion focused on the 2–3 highest-risk patents identified in your existing desktop search. This is significantly cheaper than a full $8–20K BigLaw FTO.

Provider	Typical Cost	What You Get
Independent patent attorney	$3,000–$8,000	Full FTO opinion letter with legal analysis
Patent boutique firm	$5,000–$15,000	Comprehensive opinion + freedom-to-operate certification
BigLaw firm	$10,000–$50,000+	Full opinion with jurisdiction coverage, willfulness defense

3. Can You Get Coverage WITHOUT a Full FTO?

Short answer: Possibly, but it depends on the insurer and your risk profile.

Options to explore:

Target niche/specialty insurers who focus on startups:
- ip.insure — specialized in IP insurance
- Founder Shield — works with early-stage companies
Demonstrate low risk through other means:
- Your existing desktop FTO search showing LOW risk
- Design-around options if a relevant patent exists
- Limited market entry (initially US-only sales)
Negotiate scope of required opinion: Some insurers may accept an opinion focused only on the highest-risk patents

4. Recommendation — What to Do, In What Order

Step 1: Get Insurance Quotes First (Before Paying for Any FTO)

Contact 2–3 IP insurance brokers (quotes are free):

ip.insure — specialized IP insurance broker
Embroker — tech-focused, offers IP insurance
Founder Shield — startup-focused

Step 2: If FTO Is Required, Pursue Targeted Attorney Opinion

Get quotes from 2–3 patent attorneys for a targeted opinion on the top 2–3 patents from your existing search.

Estimated cost: $2,000–$5,000 (vs. $8–20K for full FTO)

Step 3: Re-Evaluate Insurance Need

After getting quotes:

If insurance premium is reasonable (<\$5K/year) and you have the attorney opinion → proceed
If insurance is prohibitively expensive → consider self-insuring given LOW risk finding

Cost Summary

Item	Low Estimate	High Estimate
Insurance quotes	$0	$0
Targeted FTO opinion	$2,000	$5,000
IP insurance premium (annual)	$3,000	$10,000+
Total to get coverage	$5,000	$15,000

5. What We Still Don't Know (Gaps Requiring a Lawyer)

Specific insurer requirements — each has different underwriting guidelines
Whether a targeted opinion satisfies insurers
Policy exclusions and coverage triggers
Whether provisional patent status affects eligibility
Defensive vs. enforcement coverage — what's the difference?
Whether LOW risk FTO finding affects premium pricing

Sources

AIPLA — "How to Obtain IP Insurance for Clients" — Professional association article (Confidence: High)
Dickinson-Wright — "Freedom to Operate Opinions" — Law firm alert (Confidence: Medium)
Levin Consulting Group — "FTO and Patents" — Consulting firm blog (Confidence: Medium)
ip.insure — FAQ and website — IP insurance broker (Confidence: Medium)
UpCounsel — "Patent Infringement Insurance" — Legal marketplace (Confidence: Medium)
Founder Shield — "IP Insurance for Startups" — Insurance broker blog (Confidence: Medium)