When it comes to dealing with companies in the US or Canada, insurance requirements can differ considerably from those in the UK. This is particularly true in relation to insurance for public and products liability. If a company is selling goods or services into the US or Canada, they need to consider carefully their contractual obligations and possibly some specific insurance requirements.
Here are a few things to look out for:
- The jurisdiction of the contract – Most UK insurance policies will limit the jurisdiction governing the policy to UK law. This can be an issue if the contract to supply goods is under US jurisdiction. It will be more costly for a UK insurer to try and defend a claim in the US and therefore not all UK insurers are prepared to offer cover.
- Additional or joint insured status – This is common in the US and Canada, but it is not something the UK insurers like doing as they are worried about picking up additional liability. In the UK insurers can provide an “indemnity to principal clause” which effectively is the same. Some insurers with US/Canadian experience are prepared to note additional & joint insureds.
- Waiver of subrogation rights – This is when an insurance company waives its right to seek subrogation against the third party. Not all insurers are prepared to do this as they are likely to face a higher risk exposure. Some insurers will consider waiving their subrogation rights but will charge a higher premium.
- Vendor Agreements – This is a legal agreement that clearly states the provisions and conditions of the contract and may include the requirement for insurance. In some cases, there may be a requirement for a vendor’s certificate of insurance.