If you work with American clients, even remotely from the UK, you could be exposed to legal risk in the USA.
You might not need a separate American insurance policy, but you do need to understand the risks and ensure whatever cover you have includes USA jurisdiction and claims.
Follow our advice and you won’t go wrong.
Why is the USA different?
The USA is a more litigious environment than the UK: claims are bigger, legal costs higher and contractual insurance requirements more demanding.
Most UK insurance policies will automatically exclude:
- Claims brought in American or Canadian courts.
- Liability governed by American or Canadian law.
- Work carried out in the USA or Canada.
If your policy excludes the USA, you could find yourself uninsured if a claim arises from an American client.
What types of insurance are affected?
Depending on your business activities, you may need USA cover for:
- Professional indemnity insurance
Standard professional indemnity cover almost always excludes USA claims. So, if you provide any professional services to American clients, you’ll need to ensure your policy covers USA and Canadian jurisdiction to protect you from negligence claims in North American courts.
- Public liability
Public liability covers you for damage or injury. So, if you travel to the USA or have a branch there, you’ll need to extend your cover. If you work remotely from the UK and never visit, you may not need it, although some business contracts require you to have public liability insurance regardless, so you’ll need to check.
- Product liability
If you manufacture or supply products for export to the USA, consider extending your product liability because the exposure in the USA is significantly higher than the UK.
- Cyber insurance
If you handle data from American clients, you could be exposed to American privacy regulations and class action claims, so ensure your cyber policy includes international cover. Most high-quality cyber policies will, but you should still declare your intention to work with American clients as this can be relevant to the underwriting process.
Do American clients require American cover?
If you’re working with American clients, they will usually insist you have American cover. They may request:
- Minimum indemnity limits, which are often higher than UK norms.
- American jurisdiction coverage.
- Specific policy endorsements.
- Being named as an “additional insured”.
Never sign an agreement without reviewing the insurance clauses and ensuring you comply.
What about Canada?
Most insurance companies bundle the USA and Canada together. So, if your policy excludes USA claims and contracts, it will exclude Canada too. If a policy states North America, that’s defined as USA and Canada.
Keep your insurance under review
Once you’re sure you are covered for working with or in American markets, you can confidently work with clients but keep your insurance under review because your business won’t be safe if it’s not protected on both sides of the Atlantic.
Still unsure? Speak to our friendly experts.
