The most important types of insurance in the US are liability insurance and D&O insurance. Liability insurance protects you against claims arising from negligent services or products, while directors and officers insurance protects you as a foreign CxO against direct lawsuits against you personally.

As is the case everywhere in the world, purchasing insurance is a complicated matter. In the U.S., for example, the use of a broker is mandatory. This means you cannot purchase insurance directly but must use an intermediary. You need to have sufficient confidence in this intermediary to ensure that, in the event of a claim, they will effectively represent the insured’s interests vis-à-vis the insurance company. Fundamentally, the goal of every insurance company is to avoid having to settle a claim whenever possible. Therefore, an insurance company’s representation of interests is fundamentally two-fold — that is, it involves both representing the claimant in the claims settlement process and, at the same time, assessing whether a claim actually needs to be settled. For this reason, close attention must be paid to the questionnaires and other information that you submit to the insurance company at the outset.

The purpose of insurance for a business, therefore, lies less in security or safety in the event of a claim and more in the compliance requirement of an existing insurance necessary to launch any business.

Similar to legal matters and tax consulting, it’s also helpful for the insurance broker to be familiar with at least European market practices. So feel free to reach out to me if you have any questions about the practical implementation of this!

By the way: Nothing I write here constitutes legal advice within the meaning of the German Rechtsdienstleistungsgesetzes. The content has been compiled to the best of my knowledge. I am not a lawyer (but I know a few, if necessary).