Do You Need US Business Insurance as a Non-Resident Owner?

A client contract requires it. The most common trigger by a distance. US enterprise procurement routinely requires vendors to carry general liability, and sometimes professional liability or cyber cover, at stated limits, with a certificate of insurance naming them as an additional insured.

If you are selling to US businesses of any size, expect this. It arrives during vendor onboarding, which is after they have decided to buy and while you are waiting to be paid, so discovering it then costs you weeks.

A marketplace requires it. Some platforms require sellers above a volume threshold to carry liability cover.

A lease requires it. If you rent US space, which most readers of this page do not. Note that a registered agent or virtual address is not leased space and does not trigger this.

You have US employees. Workers' compensation is the clearest legal requirement in this list, and it is the one we can source. It is mandated at state level, not federal, and the states do not agree with each other. California and Delaware require it from a single employee. Florida requires it from one employee in construction and four outside it, and counts LLC members toward that headcount. Texas does not require it at all for most private employers. Wyoming requires it only in extra-hazardous industries, by NAICS code.

All five, quoted from the state agencies, are on hiring in the US as a foreign-owned LLC, along with whether you as an owner are covered, which is a fourth different answer in each state.

It only applies if you actually employ people in the US, which is a much bigger decision than the insurance question and is made on that page rather than this one.

Embroker requires a physical address that is not a PO box, a mailing address or a registered agent's address, and tells fully remote companies to enter the founder's own address instead.[1]Embroker, Frequently asked questions

That matters because a registered agent or virtual address is what most readers of this page have, and it is the only US address they have. Embroker is the one broker in this market that publishes its rule; it tells a fully remote company to use the founder's own address instead, and for you that address is not in the United States. What happens next it does not say, and we are not going to invent it.

Expect the same question from others even where they do not publish it. It is the same wall that stops business card applications, where Ramp names registered agent and mail-forwarding addresses as excluded outright. If you are gathering documents for either, treat the address as the hard part.

This one wastes an enormous amount of people's time, so it is worth a section.

In US insurance regulation the words foreign and alien describe where the insurer was formed, not who owns the insured business: a foreign insurer is formed under the laws of another US state, and an alien insurer under the laws of another country.[2]National Association of Insurance Commissioners, UCAA definitions

So a "foreign insurer" is an Ohio company selling in Michigan. It has nothing to do with who owns the business buying the policy. Almost every official-looking result you find by searching for foreign business insurance is about licensing carriers across state lines, and none of it answers your question.

US insurance is regulated by the states rather than federally, through the chief insurance regulators of the 50 states, the District of Columbia and five territories.[3]National Association of Insurance Commissioners, About That is why there is no single federal answer to find, and why a rule you read for one state tells you nothing about another.

If you are a solo founder abroad, selling software or services to customers who have never asked, with no US premises, no US employees, no inventory and no contractual requirement, then nobody is requiring it and the decision is purely about your own risk appetite.

That is a legitimate reason to buy insurance and a poor reason to be sold it. Formation services that bundle insurance into packages for founders in that position are selling a product against a risk the buyer has not assessed.

The LLC provides limited liability, which is a different mechanism from insurance and is not a substitute for it.

Limited liability is about which assets a claim can reach. Insurance is about who pays to defend and settle a claim. A claim against your company can consume the company entirely without ever reaching your personal assets, and the limited liability worked exactly as intended.

So "I have an LLC" is not an answer to "are you insured," and a procurement team asking the second question will not accept the first.

Ask before you need it. When negotiating with a US business customer, ask early whether their vendor requirements include insurance and at what limits. It is a normal question and asking it during negotiation is much better than discovering it during onboarding.

If it is required, get the certificate before the contract is signed rather than after, because the payment clock does not start until vendor onboarding completes.

If it is not required by anyone, decide deliberately rather than by default in either direction.

No carrier publishes a position on foreign ownership. We read the published material of eight: Coalition, Embroker, Vouch, Hiscox, ERGO NEXT, Thimble, The Hartford and Chubb, looking for any statement about non-US-resident owners, or an SSN requirement on a business policy. Not one of them makes either.

That is a finding rather than a gap, and it is not the same as a refusal. It means the question is decided at underwriting rather than published, so you will have to ask a broker directly. Where we stopped, it was because the answer sits behind a quote funnel that wants personal data, or behind a login. We did not submit either.

One near miss worth knowing about: Coalition publishes the full list of what it needs to quote, and no owner identifier appears on it at all: company name, domains, industry, employee count, revenue and a US or Canadian headquarters address. That is suggestive and it is not a statement that no identifier is required later.

No state regulator publishes a position either. We checked the NAIC and the insurance departments of California, New York, Texas, Washington, South Carolina and Delaware. None addresses whether a foreign-owned entity may hold a US commercial policy. There is no rule to cite in either direction.

We have not verified premiums for any carrier, which is why no cost figure appears anywhere on this page.

Do I legally need business insurance for my US LLC? Generally not, unless you employ people in the US, where workers' compensation is mandatory in most states. What creates the requirement in practice is usually a contract.

My client is asking for a certificate of insurance. Is that normal? Yes, and it is routine in US enterprise procurement. Expect general liability at stated limits, often with the client named as an additional insured.

Doesn't my LLC protect me? Limited liability determines which assets a claim can reach. Insurance determines who pays to defend and settle it. They are different mechanisms and one does not replace the other.

Which carrier should I use? We cannot tell you. None of the eight carriers we read publishes a position on foreign ownership, so any list ranking them for non-resident founders is invented. Ask a broker, and ask about the address before anything else.

I searched and found lots of official pages about foreign insurance. Why do they not help? Because in this context "foreign" describes the insurer's home state, not the owner of the insured business. Those pages are about licensing carriers across state lines.

Can I use my home-country insurance? Possibly not for a US-domiciled risk or a US client's requirements. Ask the client what they will accept before buying anything.