The USA Work, Sales, & Jurisdiction Exclusion: What Business Owners Need to Know

Many business owners assume their insurance coverage follows them wherever they do business. After all, if you’re insured in Canada, shouldn’t that protection extend when work or sales cross the border? Not always.

One of the most misunderstood policy provisions in commercial insurance is the USA Work, Sales & Jurisdiction Exclusion. It’s often buried in policy wording, rarely discussed at renewal, and only discovered when something goes wrong. Understanding it ahead of time can save businesses from costly gaps in coverage.

What Is the USA Work, Sales & Jurisdiction Exclusion?

In simple terms, this exclusion limits or removes insurance coverage related to business activities connected to the United States. Depending on the policy, it may exclude claims arising from:

• Work performed in the United States
• Products sold to U.S. customers
• Services provided to U.S.-based clients
• Claims brought under U.S. law or in U.S. courts

Even if your business is based entirely in Canada, exposure to U.S. risk can trigger this exclusion.

Why Does This Exclusion Exist?

The U.S. legal environment is significantly different from Canada’s. Lawsuits tend to involve:

• Higher settlement amounts
• More aggressive litigation
• Greater legal costs

From an insurer’s perspective, U.S. risk is more expensive and unpredictable. As a result, many Canadian policies automatically exclude it unless specifically added back through an endorsement.

Common Situations Where Business Owners Are Caught Off Guard

Many business owners don’t realize how easily U.S. exposure can arise. Here are a few common scenarios:

• A Canadian company sends employees to the U.S. for a short-term project
• Products are sold online and shipped to U.S. customers
• Consulting or professional services are provided remotely to a U.S. company
• A contract includes U.S. jurisdiction clauses
• Trade shows, installations, or training occur in the U.S.

Even minimal or occasional U.S. involvement can be enough to trigger the exclusion.

What Happens If a Claim Falls Under This Exclusion?

If a claim arises that falls within the excluded scope, the insurer may:

• Deny the claim entirely
• Decline to defend the business in a U.S. lawsuit
• Refuse to cover legal costs, settlements, or judgments

This can leave a business owner personally responsible for extremely high legal and financial exposure—often far beyond what they expected.

Does This Mean You Can’t Do Business in the U.S.?

Not at all. It simply means your insurance coverage must match your actual business activities. Many insurers offer options such as:

• Adding U.S. exposure endorsements
• Purchasing separate U.S. liability coverage
• Expanding territorial or jurisdictional limits

The key is disclosure and alignment—not avoidance.

Questions Business Owners Should Ask

If your business has any connection to the U.S., it’s worth asking:

• Do we sell products or services to U.S. customers?
• Do employees travel to or work in the U.S.?
• Could a claim reasonably be brought in a U.S. court?
• Does our policy include a USA Work, Sales & Jurisdiction Exclusion?
• If so, what options exist to address it?

Insurance works best when there are no surprises—especially at claim time.

The Bottom Line

The USA Work, Sales & Jurisdiction Exclusion isn’t a flaw in your policy—it’s a risk boundary. But boundaries only work when you know where they are.

As businesses grow, expand digitally, or explore cross-border opportunities, insurance coverage needs to evolve alongside them. Taking the time to understand this exclusion can be the difference between a protected business and an exposed one.

Knowledge doesn’t just reduce risk—it builds confidence.

Let’s Keep Talking:

Jenny is a business insurance broker with Navacord. With 19 years experience, she will well versed in the technical aspects of business insurance coverages.

She can be reached at 604-317-6755 or hello@jennyhollyhansen.ca             

Connect with Jenny on LinkedIn at https://www.linkedin.com/in/jenny-holly-hansen-365b691b/.  

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