Insurance - UK client / US project

[John3]

Hi all

Just looking for some information about insurance.

My company’s client is a UK-based service provider - contract is governed by UK law. I’ll be working on a project for their US-based client, working on their systems remotely. I guess this is a fairly common situation.

I’m told by insurance brokers (and various threads here) that I don’t need anything other than standard insurance cover because the contract is governed by uk law. That would cover breach of contract and disputes between my ltd and the client.

But these policies still exclude any action taken in US so would not cover any action taken directly by the end client.

My question is whether there is any possibility, however unlikely, that the end-client could sue my ltd for negligence (rather than breach of contract) directly. Is this something that anyone else has considered?

I’m fairly sure I’m overthinking this but would welcome any comments.

[Lance]

Hi all

Just looking for some information about insurance.

My company’s client is a UK-based service provider - contract is governed by UK law. I’ll be working on a project for their US-based client, working on their systems remotely. I guess this is a fairly common situation.

I’m told by insurance brokers (and various threads here) that I don’t need anything other than standard insurance cover because the contract is governed by uk law. That would cover breach of contract and disputes between my ltd and the client.

But these policies still exclude any action taken in US so would not cover any action taken directly by the end client.

My question is whether there is any possibility, however unlikely, that the end-client could sue my ltd for negligence (rather than breach of contract) directly. Is this something that anyone else has considered?

I’m fairly sure I’m overthinking this but would welcome any comments.

PI cover is to protect against you being sued.

[jamesbrown]

The client's client has no contractual relationship with YourCo. It is your client that needs to worry about insuring themselves against claims by their US client, not you. Your client may, in turn, make a claim against YourCo under the terms of your contract with them, but you're not asking about that and it would be covered by your pre-existing PI insurance from what you've said (subject to the limitations of that policy, of course, but US jurisdiction and governing law is not a relevant limitation).

[John3]

Thanks for your replies.

I guess my question is about liability that goes beyond the contractual relationship. As I understand it (although the examples I've found tend to be related to the construction industry), a subcontractor could still be sued by the end-client for negligence. Law of negligence is separate from contract law.

If that's the case then surely there is a chance that a client's client could sue my ltd for negligence. Without additional insurance my ltd would not be covered by such an action that started in the US.

It might be unlikely to happen but I'm trying to work out if it is a possibility and if others have thought of it.

Thanks

[jamesbrown]

Sure, but it's far more likely that they pursue your client first. Why would they attempt to pursue a claim against a third party under UK jurisdiction and governing law when they have a US client in a contractual relationship under US jurisdiction and governing law? Seems quite far-fetched but, in any case, you have PI insurance that is valid in the UK and you'll need to read the T&Cs of that.