USA Exposure in Life Sciences Insurance
Worldwide territory does not automatically mean worldwide jurisdiction, and neither phrase guarantees North American cover. The exposure has to be tested lens by lens.
Specialist
Market access
Hard-to-place
Our focus
Australia
National broking
Recognition
The Tank take
USA exposure should be tested across products, users, services, contracts, entities and courts. A policy can cover work performed worldwide yet exclude claims brought in the USA, or products supplied to US customers.
Direct US revenue is only one indicator. Indirect exports, app-store availability, clinical sites, distributors, US governing law, indemnities and US-domiciled related entities must all be disclosed and checked against every relevant policy section - because each section can treat North America differently.
The six-part USA exposure test
Run all six lenses before describing a risk as Australian-only or worldwide.
- 01
Customers and users: what direct and indirect revenue, patients, app users or trial participants reach the USA or Canada?
- 02
Products and distribution: can products reach North America through a distributor, marketplace or customer's onward sale?
- 03
Services and travel: does anyone perform work in, or deliverable into, the US?
- 04
Contracts and courts: is any contract governed by US law or subject to US jurisdiction or indemnities?
- 05
Entities and people: are there US subsidiaries, employees, contractors or representatives?
- 06
Policy mechanics: which sections include or exclude North American territory and jurisdiction, and are defence costs inside the limit?
US jurisdiction is priced, not waved through
In one Tank consultant placement, adding US jurisdiction moved the base premium from around $1,000 to around $2,800 for a $2M limit - nearly triple, for the same professional work. The underwriter also wanted the signed contract, the governing law, the services being delivered and the reason the cover was needed.
That is typical. US exposure triggers referral on high limits, detailed contract questions and material premium change. It is not a reason to avoid disclosure - undisclosed US exposure is a reason for an insurer to walk away from a claim - but it is a reason to present the exposure precisely: which contract, which customers, which sections need the extension and which do not.
Where the exposure is genuinely absent, saying so explicitly ("no USA exposure is required") strengthens the submission and keeps the premium where it should be.
How US exposure arrives without a US office
An Australian distributor or customer on-sells product into North America. The injury claim, when it comes, is filed where the injury happened.
A health app technically available for global download has users, reliance and potential jurisdiction wherever it is used. Download history is disclosable.
US governing law and jurisdiction clauses create a claims pathway independent of where the work is physically performed. One signed contract can change the whole placement.
US subsidiaries, employees and representatives can be treated differently under the schedule. The corporate structure needs to match the named insureds.
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Questions about USA Exposure
Not automatically. Territory, jurisdiction, exclusions, endorsements and the schedule must be checked - and PI, products, public, cyber and trials sections can each treat North America differently.
No. Indirect exports, online users, US contracts, trials, distributors and related entities can all create exposure without a dollar of direct US revenue.
It can affect where disputes are brought and the legal severity, even when the work is performed in Australia. Underwriters ask for the contract, not just the percentage of US revenue.
It depends on the sections, limits and exposure, but it is material: in one Tank consultant placement, adding US jurisdiction moved the base premium from around $1,000 to around $2,800 for a $2M limit.
General information only. This page does not take account of your objectives, financial situation or needs and is not legal advice. Cover depends on the insurer, policy wording, limits, excesses, exclusions and information disclosed. Read the relevant policy documents and obtain professional advice before deciding.
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