UK Exporters and Manufacturers of Products Exported to the USA Must Have Correct Level of Insurance
UK exports of goods and services in the 12 months to April 2019 increased by 4.0% to £645.8 billion. A lot has changed in the world in this short period but there have been a number of recent success stories with UK companies exporting to the USA, even during the Coronavirus pandemic.
It was reported earlier this month that UK businesses are now eligible to export beef to the USA. The first of these 4 food businesses based in Northern Ireland and Wales have now been officially listed by the US Department of Agriculture’s Food Safety Inspection Service as eligible to export UK beef to the USA and the UK Government reports that it is anticipated the first exports of UK beef will take place in the coming weeks. It is also expected that in the coming months, more food businesses in the UK will be able to take advantage of this exciting new export opportunity.
Although your business may not be exporting food products it is essential you have the correct and relevant insurance cover in place to protect your business. We have helped many businesses obtain the right level of insurance cover including exporting products such as beauty products, health food supplements or technology exports, carry increased risks and this is where we can provide specialist guidance that ensures you have peace of mind and the correct product liability protection when exporting to North America or Canada.
If you export products to the USA or Canada specialist insurance will be needed and exports to certain areas require special consideration
Due to the high risk nature of certain products and the litigious society in the USA, it is mindful to consider that each state has different rules, regulations and exposures. You should consider:
- Make sure you understand your exposures when exporting to the USA.
- Be mindful of the litigious environment and high payouts in the US and make sure that you have the right insurance cover in place in case of possible lawsuits.
- It’s important to remember that the US is made up of 50 states but 51 insurance jurisdictions, each with different rules, regulations and exposures.
- Be aware of the differences in the types of cover available in the USA.
- Do not assume that a UK policy can just be extended to cover the US. Insurance to cover your liabilities in the USA must be flexible enough to be scalable with your business requirements, buying insurance cover today knowing that sales to the USA or Canada is going to increase soon could cause a problem.
- Make sure that your limits are high enough. As an example, think of the substantial amount of damages that might be awarded against you in something like a product liability case.
- The legal system in the USA differs to ours in the UK and usually relies on what is known as ‘Strict Liability’. This means that even if you have only supplied the product you could be deemed liable for any losses that might occur from it.
- Remember that your duties to customers are often more onerous than in the UK; try to prevent any possible accusations of ‘failure to warn’ relating to your products.
- Legal action can come from individuals, businesses or class actions where lots of people take action against you or your company because they have suffered from using your product.
- Finally, ensure that you speak with a specialist broker such as USA Protect who understand the US export market- giving you peace of mind that you are correctly covered and that any claims will be dealt with by knowledgeable people who understand the environment.
Specialist insurance is required as litigation is extremely costly and court awards much higher. A defective product for example that causes injury can result in a product liability legal claim against either the manufacturer, distributors or importers.
Insurance for exporters of specialist products to the USA
All exporters to the USA will need insurance cover whatever they are doing, it’s an essential part of your business and protects your assets whether it is just whilst stock is being moved or if you have a full manufacturing business.
For suppliers of specialist products that are purchased elsewhere you might be storing products in the UK that require warehousing before your products are shipped or perhaps you sell your products online that go into the USA through Amazon, as such Amazon FBA Insurance [LINK] is a requirement.
Ensure your business is best protected
Please remember that when making decisions about insurance it’s essential you check whether the cover is appropriate to your needs from a specialist insurance broker such as USA Protect, a trading style of Real Insurance
When making decisions about insurance it’s essential you check whether the cover is appropriate, particular if circumstances have changed during this unprecedented period. Talk to an insurance specialist today on 01623 889530.