Hi there everyone,
Chamber Ambassador David Walton from Bromwall Commercial Insurance brokers sent me the following update on Insurance Cover for Trade with the US.
With Brexit approaching and the world changing, more businesses are discovering alternative markets to trade and sell their wares or services. One area which is already increasing in popularity and with the promise of a special trade deal after the UK leaves the EU is the USA.
The USA is arguably the largest economy in the world and is already the second largest trading partner with the UK after Europe. So what is so special about insurance and the USA? For anyone who has tried to obtain cover, the answer is clear. It can be very tricky, expensive and full of clauses. But why is this the case?
Many UK brokers are inexperienced in obtaining US liability cover. Most of the mainstream insurers are limited in the cover they can provide due to re-insurance and limited treaties so when your turnover exceeds 10 or 15% to the USA the cover is unavailable. The US has many standard clauses in contracts that under UK insurance law, simply cannot be met. So, is it all doom and gloom?
There are many insurers available in the UK market which are more than happy and able to offer cover to UK businesses trading in the US, even if all your turnover is generated from trading in the USA. There are clauses which when requested from insurers, should meet the demands of the US clients, without comprising your position or the UK insurance law. Acord forms (a standard declaration throughout the USA and requested by most US business to evidence cover) are able to be issued in the UK. It is reported that to start a defence of a liability claim from the UK for a US issue starts at £24,000. This is before any potential payout. It is not surprising that many insurers shy away from US cover.
So why is obtaining cover for the USA a problem for some UK brokers and not for others? Bromwall has been trading for over 46 years and in this time we have obtained agencies with specialist insurers able to meet the unique demands of modern business. Ask your broker if they have experience in dealing with USA contracts and arranging cover. It is becoming vital that the option to trade with the US is met and you could be risking your business if your insurance cover cannot meet your demands.
You can contact David on 01707 883377