An absolutely massive issue I am having is getting insurance to trade with the US. As soon as insurers hear I will do 40% of my business with the US they say sorry you are too risky for us to even quote on.
I am in the retail industry selling home furnishings and although the US are more friendly (than the UK) with their duty free rate of $200 the legal system is making me consider whether I can even do business there from the UK.
It is too big of a risk to take selling physical products to the US when one legal case can take me out of business.
If anyone can recommend me a UK based insurer who will even quote on a product importer to the US I would be delighted to know.
Aren't you a product exporter? Your counterpart in the US would be the importer.
As a bit of a counterweight, yes, the US is 'sue happy' but being abroad typically takes a good part of the wind out of the 'I'll see you in court' attitude. It takes a lot more from the litigating party to set up a lawsuit with an overseas party, on top of that the courts in the UK are much less likely to award idiotically high damages.
As a first stop, before talking to insurers I think you should talk to a UK based lawyer that has experience defending a UK party from a US party suing them to get a good idea of the lay of the land and the likely hood of such a lawsuit.
As soon as you incorporate in the US your chances of being sued will go up enormously, and so will the cost of your defense. In the UK it will be manageable, in the US it will likely put you out of business. As one friend who runs a consumer electronics company said "The US is a very large market and we can not ignore it. But the cost of doing business there in terms of legal hassle is something that we simply pass on to the consumers in the US, which is our way of dealing with it.".
We ship direct to customers in a way similar to how you might buy from ebay an item from a seller overseas and they will send the item. We want to make the process as easy for our customers as possible so we through our couriers will take care of all customs clearance and duties if they apply.
Our biggest advantage of not setting up in the US apart from the legal aspect is being able to avoid a lot of the taxes.
When I spoke to the insurers here they told me that should someone in the US sue us it would be in a US court and not a UK court where as you mention the damages are potentially extortionately high!
As we are a very young company our exposure to the US is low but it is something that I cant ignore as a risk. Intuitively I would agree that the likelihood of being sued is greatly reduced not being registered in the US but it is a market I would like to grow into.
I think seeking advice from a lawyer with experience with US defense is a good advice and I will do this, thanks.
Someone in the US would sue you in their state, which if you lost they could potentially seize your assets in that state. If you are UK based, this would entitle them to nothing upon winning. You have literally nothing to lose.
I have been manufacturing a product (not software) since 2004 and have had the pleasure of verbal threats of lawsuits a few times. After 100,000 products sold I am still waiting to see my first letter from a lawyer telling me a suit has been filed.
While the US is very litigious, the risks are not there for you. You do not have the same legal exposure as McDonalds or Wal-mart so I would not be overly concerned about it. Sell to the US as much as you want and don't worry about lawsuits. The only time you would need US insurance would be to sell to large distributors who will demand proof of insurance. For my product that used to cost $20,000 per year for insurance, now it is down to $6000 a year because of the lack of lawsuits.
I think that contains some information that bears on your situation.
My short form advice to you would be: don't worry about lawsuits that you have not been confronted with. It's fine to look ahead but this is something that most likely will never come to pass and you have no control over whether and when it will. Such lawsuits are typically reserved for companies that are wealthy enough to defend against them, a proverb in my country says that 'you can't pluck feathers from a frog' so if you're not a very plump target with assets in the US then you have little to worry about.
Concentrate on your product quality, market it with realistic expectations and you'll likely be just fine.
I am in the retail industry selling home furnishings and although the US are more friendly (than the UK) with their duty free rate of $200 the legal system is making me consider whether I can even do business there from the UK.
It is too big of a risk to take selling physical products to the US when one legal case can take me out of business.
If anyone can recommend me a UK based insurer who will even quote on a product importer to the US I would be delighted to know.