Working with US clients can be a fantastic opportunity, but it does require a little more preparation. Things like governing jurisdiction, unfamiliar insurance terminology and different products often come up and can leave freelancers scratching their heads. Don’t worry—we’ve likely seen it before. That’s why we’ve put this guide together.
First things first: whose contract will you be using? Yours or the client’s?
We’ve covered policy jurisdiction in detail before. You can read more about that below:
- Will my insurance cover me if I work with US clients?
- What do you need to consider when working with clients abroad?
But as a quick reminder, your professional indemnity policy excludes US and Canada jurisdiction by default. This means that if a US client brings a valid claim against you in a US court, your insurance policy would not be able to respond.
This is why it’s better to have clients enter into your contract. Your contract should state that any disputes are governed by the law of the country you’re based in. For example, England & Wales, Scotland, or Northern Ireland.
Your clause will probably look something like this:
Governing law and jurisdiction.
This Agreement and any dispute or claim arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with the law of England and Wales. The Parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter.
If a US client signs your contract and a dispute arises, it would be handled under UK jurisdiction. This means your professional indemnity insurance would be able to respond.
The alternative is to extend your insurance policy to include US jurisdiction. However, this comes with a significant price increase due to the higher litigation risks in the US.
If you’re only working with one US client and they insist on using their contract, one option is to pass the additional insurance cost back to them as part of your fee.
Changes in terminology to be aware of
It’s a reasonable request for clients to ask you to carry certain types of insurance. After all, if a mistake you make costs them money they need to know they can comfortably recover that money from you.
Where things become confusing is terminology. The US and UK use different names for very similar types of cover.
For example:
- Public liability (UK) is often called general liability (US)
- Professional indemnity (UK) is often called professional liability (US)
- Employers’ liability (UK) is often referred to as workers’ compensation (US)
Because of these differences, you may find a US client asking whether you have certain types of liability insurance. It can be difficult to answer if the terminology doesn’t match what you have.
In these situations, it’s helpful to clarify the cover you do have and provide documentation. For example, you might say something like:
“I don’t have general liability insurance. In the UK this is typically called public liability insurance. I’ve attached my certificate of insurance along with the policy wording so you can confirm it meets your requirements.”
This keeps things clear and avoids confusion around terminology.
It’s also worth remembering that while the policies may be broadly similar, there can still be differences and that’s why it’s sensible to share your policy wording. This extra bit of due diligence allows the client to confirm the cover meets their requirements.
Some insurance products are common in the US but not in the UK
If a client sends you their standard contract, it will often include a list of insurance requirements. Some of these may be unfamiliar. In some cases the product may not even exist in the same form in the UK.
One example we often see with US contracts is umbrella or excess liability insurance.
Umbrella insurance is very common in the US, which is why many American contracts ask suppliers to carry it. This is because the US is more litigious and the cost of defending claims is higher.
However, it would be unusual for a freelancer in the UK to carry this type of cover.
If a US client asks you to carry umbrella liability insurance, a practical compromise could be to agree on a higher indemnity limit on your existing policy. After all, contracts are there to be negotiated!
In many cases, when a US client asks for umbrella insurance, they’re simply looking for reassurance that the total level of cover available meets their requirements.
Consider the exchange rate
Speaking of indemnity limits, if a client asks for a specific level of cover it will likely be expressed in US dollars rather than pounds.
Because exchange rates fluctuate, it’s worth keeping this in mind when checking whether your policy meets their requirements. A limit that looks equivalent today could fall short if the exchange rate moves.
For that reason, it’s usually sensible to err on the side of caution and carry a slightly higher level of cover to ensure you comfortably meet the client’s requirement in USD.
The client wants to be noted as an additional insured
Lastly, a common request from US clients is to be named as an additional insured on your policy.
This means the client can benefit from your insurance if they’re pulled into a claim connected to the work you carried out for them.
This is a fairly standard request and is something we can arrange by issuing an endorsement to your policy.
