US Business Insurance Terminology for UK Recruiters

US Insurance Insights – US Business Insurance Terminology for UK Recruiters

Whilst expanding into the US job market, UK recruiters must ensure they understand the various business insurance requirements, and the specific terminology used in the US.

While there are many similarities between the structure of US and UK business insurance, there are notable differences in terminology that recruiters should be aware of when operating across the pond. For example, what is known as General Liability Insurance (GLI) in the US is typically referred to as Public Liability Insurance here in the UK. Similarly, Commercial Property Insurance in the US aligns with the UK’s Buildings and Contents Insurance. The US Workers’ Compensation Insurance, which is mandatory for employee injury coverage, is comparable to the UK’s Employer’s Liability Insurance (although the US system is more regulated at a state level). Professional Liability Insurance in the US is similar to Professional Indemnity Insurance in the UK. Additionally, the Business Owner’s Policy (BOP), a packaged policy in the US, may resemble combined policies in the UK but with different terms and inclusions.

Understanding these differences is crucial for UK recruiters in ensuring they have the appropriate coverage when operating in the States.

Below we outline the key essential terms and insurance products UK recruiters may need to consider, dependant on how you are operating in the US. Recruiters based in the US face distinct insurance needs and requirements compared to those operating through a UK entity or partnering with a local EOR/AOR. Click here to learn more about the different insurance needs when working in the US.

An Overview on US Insurance Terms

General Liability Insurance (GLI)

Provides coverage for claims of bodily injury, property damage, and personal injury (such as defamation) that occur either on business premises or due to business operations. This is often a foundational policy for businesses in the US.

Commercial Property Insurance

Protects physical assets such as buildings, equipment, and inventory against risks like fire, theft, and natural disasters.

Business Owner’s Policy (BOP)

A bundled package that typically includes both general liability and commercial property insurance. BOPs are designed for small to mid-sized businesses and may include additional coverages like business interruption insurance.

Workers’ Compensation Insurance

Mandatory in most states, this coverage provides benefits to employees who suffer job-related injuries or illnesses, covering medical expenses and lost wages.

Professional Liability Insurance (Errors and Omissions Insurance)

Covers businesses against claims of negligence, misrepresentation, or inadequate work. This is particularly important for service-based industries such as consulting, legal, and financial services.

Commercial Auto Insurance

Covers vehicles owned or used by the business for work purposes, providing protection against liability and physical damage.

Directors and Officers (D&O) Insurance

Directors and Officers (D&O) Insurance protects the personal assets of directors and officers when lawsuits arise from wrongful acts in company management.

Cyber Liability Insurance

Offers protection against data breaches, cyberattacks, and other digital risks that can result in financial losses and legal liabilities.

Employment Practices Liability Insurance (EPLI)

Covers claims made by employees relating to wrongful termination, discrimination, harassment, and other employment-related issues.

Regulatory Considerations

Unlike the UK where insurance regulation is centralised, US insurance is regulated at state level. This means that each of the 50 states has its own regulatory framework, creating significant variations in how insurance is governed across the country. Furthermore, each state has its own insurance department, which oversees the licensing of insurers, regulation of policies, and enforcement of insurance laws.

Multi-State Compliance

Recruiters must ensure that its insurance policies comply with the laws of every state in which it operates. This could mean having different policies, endorsements, or limits depending on state requirements. Recruiters should also be aware that States may have specific insurance requirements beyond the federal minimums. Businesses therefore may need to adjust their coverage to meet state-specific requirements. Legal interpretations and enforcement can also vary by state, directly impacting how policies apply and how claims are resolved.

Navigating the Differences in US Insurance Regulations

UK recruiters expanding into the US must navigate varying state insurance laws, regulatory bodies, and compliance requirements. Working closely with knowledgeable legal advisors who understand these regional nuances is essential to ensuring that your business remains compliant and adequately protected throughout any state it operates in.

Expand Your Recruitment Operations with Confidence

Are you a UK recruiter considering you plans for US expansion? Expanding to the US is an exciting and substantial move for UK recruitment agencies. The US job market’s diversity, economic growth, and technological innovation offer an abundance of opportunities! Ensure your success today with the right legal expertise. 

13e4Our advisers at WTT Legal are experts in all areas of law pertinent to temporary and permanent recruitment and outsourcing arrangements. WTT Legal’s Dual US-UK qualified Director of Legal Services, Carla Roberts, holds extensive experience in both the UK and US recruitment market. Our legal team provides expert advice on conducting business in the US and using your UK entity to engage with US clients. Contact our specialised legal advisors today to navigate your US expansion confidently.

The information contained in this blog is provided for informational purposes only and should not be construed as legal advice on any matter. Individual circumstances will affect risk and legal advice should be tailored to your unique requirements.

Please note that WTT Legal Ltd. is not authorised to offer advice on insurance-related matters. For guidance on insurance or protection issues, individuals are advised to consult a professional insurance specialist.