USA/Canada Exclusion Clause
A market-standard exclusion carving claims brought before United States or Canadian courts, or governed by their law, out of an otherwise granted worldwide liability extension.
- Clause type
- Exclusion
- Origin/Market
- DACH – statutory
- Favours
- Insurer
- Negotiability
- Market standard
Standard wordings
- GDV AHB 2016 clause 7.9 (base exclusion for foreign loss events)
- market-standard USA/Canada exclusion applied within a granted worldwide extension
Purpose
Because AHB clause 7.9 excludes liability claims arising from foreign loss events entirely by default, worldwide cover is always agreed as a separate extension. Within that extension, insurers routinely re-exclude claims brought before United States or Canadian courts, or assessed under their law, since the local liability and litigation environment presents a materially different risk profile.
Effect and limits
The exclusion is driven in particular by the US contingency-fee system for lawyers, extensive pre-trial discovery, and the risk of substantial punitive damages, which can reach a scale that overwhelms European coverage structures. It affects both general liability claims and, especially relevant in practice, product liability exposure arising from exports into the North American market.
Negotiation and practice
Businesses exporting to the United States or Canada should specifically buy back the exclusion or arrange dedicated USA/Canada cover, often through a locally admitted fronting policy. When reviewing the wording, it is important to establish whether the exclusion turns on where the loss occurred, the claimant’s domicile, or the governing law, as these connecting factors materially affect the actual scope of cover.