Expanding into the US market offers major growth potential for UK businesses, but it also introduces complex insurance and legal challenges. One of the most common hurdles faced by UK exporters is the expectation from US clients that they provide evidence of insurance in the form of an ACORD Certificate of Insurance (COI). These certificates are a US standard and differ significantly from typical UK insurance documentation.
US supply contracts often include strict insurance clauses requiring specific liability limits, jurisdiction under US law, and the addition of the US client as an ‘Additional Insured’. UK insurance policies and brokers are generally not able to meet these terms, and issuing an ACORD certificate directly from the UK is often not feasible.
A practical and strategic solution for many UK companies is to establish a subsidiary in the USA. By doing this, the business can obtain a US-admitted insurance policy that meets local requirements, is underwritten in the appropriate jurisdiction, and can be accompanied by an ACORD certificate issued by a US-licensed broker. This approach not only satisfies the client's expectations but also demonstrates commitment to the US market.
A US-based policy can provide cover on an occurrence basis—standard in the US—and allows for proper inclusion of Additional Insureds, waivers of subrogation, and other contractual endorsements. While setting up a US entity does involve administrative and tax considerations, for companies with long-term US trade plans, it often proves to be the cleanest and most commercially efficient path.
However, setting up a US subsidiary and securing local insurance should not be done in isolation. It is vital to work with a UK broker who understands the complexities of US risk and has established relationships with reputable US brokers or correspondents. This collaborative approach ensures that your UK and US insurance programmes are aligned, with coordinated cover across jurisdictions and consistent risk management strategy.
The UK broker plays a key role in managing the global programme, identifying coverage gaps, and ensuring that both the UK and US policies dovetail correctly. They can also help navigate ACORD issuance through their US counterpart, and support contractual negotiations where insurance terms are too onerous or incompatible with available cover.
For businesses not ready to establish a US presence, alternative approaches such as using a US distributor or negotiating contract amendments may work in the short term. However, for sustained trade, a properly structured US subsidiary with compliant insurance is often the most robust and professional approach.
In summary, trading with the USA requires more than just ambition and a good product—it demands strategic planning around risk. UK companies should involve an experienced broker early in the process, ideally one with international capabilities and US broker partnerships. With the right guidance, you can meet US insurance expectations without exposing your business to unnecessary risk or contractual breaches.
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