With a number of new start up businesses either trading online or via a platform such as Amazon, it is important that business owners comply with terms and conditions of vendors, and also understand the complexity of US Jurisdiction if exporting to the USA – wherever you sit in the supply chain.
Product Liability Insurance for North America can be significantly different, with additional cover requirements not usually found in a standard UK policy.
When you supply a product to a customer in the USA, it’s not just the item itself or the way it is manufactured that may cause a problem. This can be everything from how it’s designed, manufactured, marketed, advertised or perhaps just because of a particular state statute, different states can have different laws.
The limit of indemnity which is chosen should adequately represent and reflect the risks by taking into consideration what is the product being exported, is the customer requesting a minimum amount of cover and what might the worst-case scenario be, of course there are lots of factors that will go into this decision.
When buying Product Liability insurance, it is always wise to ensure that the cover you are provided meets your requirements for selling to customers in the USA.
Having an insurance policy that states cover will only operate if a claim is bought in the UK, isn’t going to be much help to you if the case is brought in a North American court. This is the difference between UK and US Jurisdiction and is an important factor. The cost of legal action in the USA can also be considerable.
Insurance to cover your liabilities in the USA must be flexible enough to be scalable with your business requirements.
If you are a UK business and sell products to clients in the USA or Canada, a standard UK product liability insurance policy is not likely to cover you if your product is deemed to have caused damage or injury. The resulting lawsuit could be extremely costly, and this is where specialist USA Product Liability Insurance is essential.
Why is specialist product liability insurance so important to US exporters?
Firstly, most business insurance policies don’t automatically include cover for products sold in North America.
The business culture in the USA is very much about ‘litigation now, ask questions later’. Even when a product has been designed to the highest standards using the best quality materials, accidents can still happen. Product liability insurance is designed to cover the cost of compensating someone who claims to have been injured by a product that your business designed, manufactured or sold. If you make or supply products to the general public it’s your responsibility to make sure they’re safe. You also must comply with health and safety and product safety laws – otherwise you may face legal action.
Defending a claim against you, or being instructed to pay out compensation, can be very expensive. Product liability insurance protects you and your company against the legal and compensation costs arising from death, loss or property damage as the direct result of someone using your product so you won’t have to find the money yourself.
Product liability insurance claims, including solicitor fees and compensation, can run into thousands of pounds.
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.
Most manufacturers or distributors have additional exposures not limited to their products
Due to the high risk nature of many popular exports to the USA, and the litigious US society, it’s important to consider that each state has different rules, regulations and exposures. Exporting products such as health food supplements, beauty and technology products, carries increased risks and USA Protect can provide an insurance policy that gives you with peace of mind and the correct product liability protection when exporting to North America.
Insurance for exporters of specialist products to the USA
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 is a requirement. Find out more here: https://usaprotect.co.uk/product-liability-insurance-vendors-extension/
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.
Further reading: US Exporters must have correct level of insurance – USA Protect
We are a specialist UK insurance broker for companies seeking US product liability cover. But don’t just take our word for it…
“Able to quote quickly and competitively where other companies either couldn’t help with our line of business or were very slow to react. Thanks especially to Steve.” Robin Hemsley
“Real Insurance was a blessing in the skies for me! They accommodated all of my requirements. Everything was explained perfectly and the response speed was very fast. Extremely happy with this service and I would highly recommend to anyone looking for insurance that meets US requirements.” Kristina
“Literally a business saver when my longstanding insurers baulked at my % of USA & Canada sales. Seriously cannot say how much I appreciate what Mike and Catherine have done. Highly recommend.” Sharon Miller
“I was given a price of £5k to be able to sell my products to the US. Mike sorted me out for £700. Result!” Neale Hayward-Shott
Ensure your business is best protected
If you had legal action made against your business or had to make a claim and were incorrectly insured, this would leave you faced with the remaining costs yourself which could be anything from hundreds, to thousands, to millions of pounds.
To ensure you have the most appropriate insurance that provides best available cover for product liability when exporting to North America or Canada talk to one of our specialists today on 01623 889530.
Wishing you a safe and successful 2021.