Professional indemnity insurance when clients are based in the USA

[seeker7]

Hi everyone.

Most of my clients are based in the USA now, and I am finding it almost impossible to find a insurer that will cover me for professional indemnity. My insurance broker told me they will need to go through Lloyds of London, and most likely the premiums are going be stratospheric.

Has anyone experienced the same situation? Should I go without PI insurance, given that I work through my limited company and thus have limited liability anyway?

Thanks for any help!

[Lance]

Hi everyone.

Most of my clients are based in the USA now, and I am finding it almost impossible to find a insurer that will cover me for professional indemnity. My insurance broker told me they will need to go through Lloyds of London, and most likely the premiums are going be stratospheric.

Has anyone experienced the same situation? Should I go without PI insurance, given that I work through my limited company and thus have limited liability anyway?

Thanks for any help!

If you can't afford the PI then you can't afford it. Simples.
What jurisdiction are your contracts under?
You might want to try US insurance companies.

What is the common method used in the USA? It might be different, or PI might not even be expected anyway. And I think it is called errors and omissions (E&O) insurance.

[eek]

Randell Dorling via IPSE was the go to recommendation here in that scenario

I don't know if it's possible to go direct.

[Manic]

I used Hammond Professional back in the day. Typically premiums were 5/6 times higher than non US.

[jamesbrown]

Randell Dorling via IPSE was the go to recommendation here in that scenario

I don't know if it's possible to go direct.

Yep. Or Kingsbridge, as it turns out (even cheaper, but in roughly the same ballpark of a few hundred quid per year, depending on level of cover). Not sure who underwrites Kingsbridge. For RD/IPSE, it's Hiscox and you need to have IPSE+ cover to access it whereas you don't need anything for Kingsbridge. Other than those two, it's pretty much (at a sensible premium).

[escapeUK]

Hi everyone.

Most of my clients are based in the USA now, and I am finding it almost impossible to find a insurer that will cover me for professional indemnity. My insurance broker told me they will need to go through Lloyds of London, and most likely the premiums are going be stratospheric.

Has anyone experienced the same situation? Should I go without PI insurance, given that I work through my limited company and thus have limited liability anyway?

Thanks for any help!

No, not at all. My client is in USA. And I just rung up QDOS explained the situation and took advantage of their standard insurance.

The key factor is that it must be UK law and our courts that applies and not US courts. They don't want any claim to go through American bulltulip courts. Also you contract must state our courts have exclusive jurisdiction.

[jamesbrown]

No, not at all. My client is in USA. And I just rung up QDOS explained the situation and took advantage of their standard insurance.

The key factor is that it must be UK law and our courts that applies and not US courts. They don't want any claim to go through American bulltulip courts. Also you contract must state our courts have exclusive jurisdiction.

Well, yeah, if your contract has UK jurisdiction and governing law of, say, England and Wales. However, it is quite obviously implicit in the OP ("I am finding it almost impossible to find an insurer") that the OP's contract does not have UK jurisdiction and/or governing law of England and Wales.

[SecurityJay]

I feel your pain.

We are in the same situation. Did finally get a deal from Lloyds but for £5m cover they wanted £20k, even with a £500k excess.

Biggest kicker as already mentioned is the jurisdiction so we have asked the client to move us to one of their UK/EU subsidiaries.

We were even thinking of setting up a US business but it seems the cost/hassle of setting up in the US + US policy, worked out about the same.

I think we in UK/EU are fairly lucky not to live in such a litigious society.

Another company we know has a policy where the excess = limit of indemnity.

So if there is any claim (up to their £5m limit), they would need to fork out £5m upfront:

1. Their risk must be super low;

2. They have ring-fenced their consulting business so if any claim did arise, they would just shut it down;

3. They tick the box for having that cover, but from a Client point of view (if they knew what they were looking for), would be a RED flag

[oliverson]

So, just been contacted by client regarding providing evidence of cover as they've been audited and told they need proof for each contractor.

Logged-in to QDOS and downloaded my policy schedule. Whilst cover is provided worldwide it is specifically excluded for jurisdiction of USA/Canada. Reviewing the contract with them, sadly the jurisdiction is USA/Canada.

Phoned Hiscox and they're saying absolute minimum of £ 500 which is over three times the price of my UK cover. Last contribution to this thread is August 2021 so I'm wondering if anybody in a similar situation has an update please? I think having the contract revised to UK jurisdiction would be a non-starter. They have no UK presence and that's the only reason the IR35 reforms don't apply.

[jamesbrown]

Well, yes, it will be more expensive. It’s completely standard to have exclusions for N.A. Surprised you weren’t aware of this or didn’t check and now have no cover, which is a massive risk when dealing with N.A. clients. That said, I use Randell Dorling, which used to be underwritten by Hiscox, but now Axa. It’s a few hundred quid depending on your PI cover amount. It may not be vastly cheaper than Hiscox, but probably a bit. Kingsbridge is competitive too, IIRC.