Mandatory Insurance in the United States

Mandatory insurance for businesses and recommended insurance: In the United States, most insurance is not required by law. This doesn't mean they aren't HIGHLY recommended.

To operate in the United States, various forms of insurance are necessary to cover a wide range of risks. It is advised to take out many of the policies described on this page, even if they are not mandatory.

ExportUSA works with several American insurance brokers specializing in business insurance. We can quickly obtain the best offers for all forms of insurance necessary to operate in the United States.

For Italian companies considering selling in the United States, or for those preparing to open a branch in America, we recommend thinking ahead about the insurance policies necessary to operate and sell in the American market. To ease entry into the American market, we publish a insurance guide in America where we have gathered all the necessary insurance solutions for companies wishing to export and work in America.

This is a complete and exhaustive list, proposed as a guide in the broad range of available alternatives: for each entry, you will find a complete description of the insurance policy and the damages and liabilities it covers.

It's useful to remember that insurance is a contract where one party (the insurer) stands in for another party (the insured) in civil liabilities to third parties arising from situations specifically described in the contract itself (example: damage caused by a defective product) up to an agreed limit.

In exchange for this coverage, the insured periodically pays a premium to the insurer, i.e., an amount of money based on the likelihood of the event and the maximum amount covered by the insurer. It's important to remember that criminal liability, by personal law, cannot be covered by any insurance, which focuses instead on the financial aspect.

We also emphasize the importance of repeatedly checking the exact terms of the insurance policy taken out in America with the insurance company, in terms of property areas and situations covered, as well as the due diligence required for the legitimacy of substitution in the liability relationship.
  

General Liability Insurance - General Liability Insurance in America

The "General Liability Insurance" policy provides basic coverage for all the main financial risks a company faces when it begins exporting to the United States, and it is therefore mandatory even for companies based in Italy. As the name suggests, the policy is of a general nature, and will need to be supplemented by others more targeted if specific risks are relevant by probability or impact on the business. Specifically, General Liability Insurance protects a company from compensation claims from third parties or companies due to personal injury, reputation, or property damage occurring on the company's premises or resulting from non-voluntary actions by the insured company or its representatives. Even legal expenses related to this category are covered by the policy. 
 

Product Damage Insurance for the United States - Product Liability Insurance [Product RC Policy]

Product damage liability in the United States concerns damages caused by the use of a product by the consumer/user. It affects both the manufacturer and those involved in its distribution, even in the absence of profit, throughout the "chain of commerce."

There is no federal regulation governing product damage liability in the United States. Specific regulations on product damage liability in America vary by state.

According to American law, the three causes of liability are negligence, strict liability, breach of warranty and refer to a defective product in terms of design, manufacturing defects, or lack of warning in the instructions for use.

Manufacturers or distributors who want to protect themselves from the risk of being held financially liable for damages caused by defective products in America can take out a Product Liability Insurance, although this does not cover product design defects or incorrect usage instructions. In these areas, however, it is also true that the manufacturer has a considerable degree of control. The premium for this policy depends on the type of product and the projected sales volume.
 

Theft and Fire Insurance United States - Property insurance

Property Insurance is a type of insurance policy that entrepreneurs with tangible assets in America, such as a building, office furniture and equipment, computers, and inventory, should consider to protect against damage that may affect these properties.

This includes environmental damage, fire, vandalism, or theft. An expense that, if not from an accounting perspective, at least from a strategic viewpoint, appears as a key investment since it allows reducing the uncertainty arising from events largely beyond the control of the entrepreneur operating in the United States.

And it is precisely in response to the multiple forms of business and their needs that this insurance can be configured to cover most risks associated with different types of properties. Finally, one can consider adding an additional policy to protect against business interruption and loss of profitability.
 

Auto Liability Insurance United States - Commercial auto insurance

Commercial Auto Insurance protects company vehicles in the United States against damage and accidents with the option to extend coverage to vehicles carrying employees, products, or equipment. If employees use their own vehicles for activities related to the business exporting to the United States, they should also be insured if the employee has not already made this provision; however, there are general and comprehensive policies that also include this need. An extension of Commercial Auto Insurance can overlap with the areas covered by General Liability and thus ensure a higher level of protection.
 

Worker’s compensation (only if employees are present in America)

Worker’s Compensation is a type of policy that many states in America, including New York, have made mandatory to operate a business in their territory if it includes employees. The insurance company replaces the entrepreneur in the statutory obligation to pay the amounts provided by law in case of medical care for work accidents or illnesses, allowances for temporary and permanent disability, and death of the worker.

In this case, the premium to be paid to the insurer reflects the potential liability of the entrepreneur determined by personal experience, the salary paid to employees, and the sector of the company. It also includes coverage of legal expenses for disputes related to the issues covered by the policy itself.
 

Insurance against damages resulting from management errors and omissions - Professional liability insurance (also known as "Errors and omissions insurance")

This policy provides coverage for legal fees and potential compensation for disputes arising from the inability or inadequacy in providing professional services by its own employees. It's a policy that mostly concerns individuals or companies working in the United States operating in the service or professional consulting sector, and allows for coverage of damages too indirect to be considered by a more general type of policy such as General Liability Insurance. 

With the option to also indemnify legal expenses, Professional Liability Insurance therefore covers damages resulting from the absence of providing necessary advice and erroneous or incomplete advice.

It covers financial losses and errors or omissions generated by a company's product or service. The need to take out a policy of this type lies in the protection against lawsuits for negligence, "misrepresentation," and bad faith in cases where, although there is no direct damage, there are grounds to proceed with legal action.
 

Directors and Officers Insurance United States - Directors and officers insurance

An insurance policy that protects the directors and officers of a company operating in the United States against legal expenses and damage compensation when directors and officers are sued for activities performed in the exercise of their corporate functions.

The reasons supporting this policy lie in the growing trend to hold directors and officers personally responsible for lawsuits, and the consequent need for such figures to feel more secure.

Directors and officers can indeed receive lawsuits and claims from a wide audience, and their decisions affect the lives of many individuals, so it's reasonable to think of a protection mechanism that allows those in these key roles to act without concerns other than pursuing the company's good.
 

Data breach insurance

A recommended policy for entrepreneurs who, during their activities, find themselves storing sensitive or otherwise non-public data about their clients, suppliers, or third parties residing in the United States.

The Data Breach Insurance Policy provides financial coverage (legal expenses and damage compensation) in legal cases where the privacy of such data is breached by external parties, as well as often offering an optional consulting service on current regulations and the best IT architecture to protect this information given the technical complexity of the subject.

Remember that sensitive data includes all data that allows identifying belonging to categories that could provoke discriminatory feelings towards the individual: examples are information on gender, religious beliefs, skin color, and similar.

See also insurance against risks for Cyber Damages -  Cyber Liability insurance