UK Business Insurance Tips - What's the Best State to Open a US Office?

UK Business Insurance Tips - What's the Best State to Open a US Office?

There’s never been a better time for UK firms to spread their wings and trade globally.  Whether you are looking for new clients, or your existing clients are opening in new locations, non-UK business is making up an ever increasing amount of an SME firms revenues.

Spreading Your Wings

While modern IT and communication systems make it easier than ever to reach clients from your UK base, you may be ready to take things to the next level by opening an office abroad.

China and the Far East may be the current darlings of global growth, but for many Tech or Professional firms, the United States still represents the most obvious choice.

According to the UK Trade & Investment, the USA is the fourth easiest country to do business. Even with this in mind, conducting business in any foreign country can create significant challenges and requires meticulous planning.


Stateside Options

Right, you’ve taken the plunge and decided to progress your first US operation, good for you! However, which of the US States offer the best solution for UK firms operating in the America?

Here is 10 of the best States for UK firms, identifying some of the key benefits for each location to help you start your search:

#1 New York

  • Offers a robust and diverse travel and distribution hub composed of rail, motorway, seaborne and airborne transport
  • Start-Up NY, a state programme that offers several beneficial incentives such as zero taxes for 10 years and, if established on a university campus, access to state-of-the-art facilities and talent
  • Promises access to a broad range of markets such as agriculture, manufacturing, distilling and technology — which rivals that of Massachusetts and Silicon Valley — as well as easier access to Canadian markets

#2 Georgia

  • CNBC ranked the state as the most favourable business climate in 2013 and 2014 due to tax incentives, including its low corporate tax rate of 6 per cent
  • Quick Start, a state-wide workforce training programme that provides free, bespoke workforce training to qualified businesses
  • Offers grant opportunities to help offset the higher costs of relocating

#3 California

  • Boasts strong rail and motorway infrastructure with possible access — depending on location — to markets in Mexico and the Pacific Rim
  • California Competes Tax Credit, an income tax credit available to businesses that want to come, stay and grow in California
  • Houses the United States’ strongest manufacturing economy, a robust agricultural sector and Silicon Valley, the nation’s technology hub

#4 Texas

  • Provides the largest amount of business incentives anywhere in the United States, including no personal and corporate income tax
  • Offers access to 29 ports and 27 airports, making it highly beneficial for import and export trade

#5 Louisiana

  • Structures incentives to attract and benefit software development and media production companies
  • Highly developed seaborne infrastructure — including the ‘Superport’, the nation’s only port capable of handling superships
  • Promises a low cost of living

#6 North Carolina

  • Offers one of the lowest business tax rates in the country at 5 per cent
  • Job Development Investment Grant, a discretionary incentive that provides sustained annual grants to new and expanding businesses
  • Houses the ‘Research Triangle’, an area encompassing three of the nation’s top research universities, numerous global Fortune 500 companies and a hub for technology startups

#7 Florida

  • Boasts one of the world’s most extensive transport systems with four major international airports, deep-water shipping ports as well as a considerable rail and motorway network
  • Qualified Target Industry Tax Refund, an incentive for companies creating jobs in certain industries
  • Possesses strong agricultural and fishing sectors and a major aerospace centre

#8 Washington

  • Grants a variety of tax and hiring incentives, primarily targeting aerospace and high-tech industries
  • International Services Credit, a tax credit for businesses engaging in international services
  • Boasts a highly skilled workforce that has access to lauded academic institutions

#9 Colorado

  • Supports a diverse economy resembling the West Coast without the associated higher cost of living
  • Strategic Fund Incentive, a programme that supports and encourages business relocations
  • Houses an extensive network of freight rail as well as the Denver International Airport

#10 Massachusetts

  • Boasts the nation’s second largest technology industry and research hub after Silicon Valley
  • State Research & Development Credit, offering tax incentives for investment in manufacturing and research and development companies
  • Supports a diverse economy comprised of biotechnology and biomedical companies, financial services, information technology as well as a strong fishing industry

Business Insurance In The USA

If you are trading in the US, be it exporting, importing, or supplying professional services, it is vital that you inform your insurers to ensure you have the right level of cover in place. Some of the key areas to look out for include:

Products Liability

Supplying any form of product to the USA can increase your Products Liability exposure.  Should someone suffer an injury from a product you have supplied, Products Liability will provide indemnity for compensation awards and damages.

Many insurers are wary of providing Products Liability cover in the United States due to the complex nature of the various state laws and increased award payments, as well as the general litigious nature of US society.

Professional Indemnity

If you are supplying a service or other form of professional advice, you should be arranging Professional Indemnity Insurance for your overall business.  Professional Liability (or Errors and Omissions as it is known in the US) provides cover for professional negligence claims as a result of the advice or services delivered by you, or your business.

For example, an Accountant fails to provide the correct tax advice and their client suffers a penalty from the local tax authority, the client deems that the Accountant is responsible and requests compensation.

When working or dealing with contracts outside of the UK, you should ensure that the territorial limits provided by your Indemnity cover is adequate as some policies may be restricted to UK or EU work only.

In a similar vein, PI policies also carry a jurisdiction limitation – i.e. the laws andCourts in which indemnity will be provided. Typically this will exclude the US and Canada unless the cover is specifically requested and extended.


Local Cover

When you open an office in the US or another foreign country, you are likely to be purchasing business contents and equipment or other local assets which will need to be insured.

Similarly, if you employ local workers, you will need to ensure you meet legal requirements and have adequate insurance protection should an employee suffer injury in the course of the work and hold you responsible.

In the UK cover for employees is provided under the employers liability section of your business or Office Insurance policy. Still, where you are engaging local workers you may need more specific cover purchased locally -In the US you will need Workers Compensation Insurance (Workers Comp).

Global policies are available in the UK, which may provision in terms of arranging local policies as required. Alternatively, you could arrange your own policy in each location, but this can be difficult to manage if you grow to multiple locations with a number of different trading entities. In the first instance, we would suggest you take the advice of your Insurance Advisor.

FREE Business Insurance Review

Insync specialises in all areas of business cover for small to medium-sized enterprises. We can Compare Professional Indemnity Insurance or other covers from the UK’s leading insurers in minutes. We can also arrange specialist mini-global policies embracing all your global insurance needs under one simple policy.

You can request a quotation online, alternatively, why not book a free review with one of our expert Gurus who can help you find the right level of cover at the right price.