Does Your US Medical Device Insurance Cover International Distribution?

Probably not, and that is the gap most US device companies do not see until a claim is filed abroad. A standard US commercial general liability policy and a standard US products liability policy are written with policy territory limited to the United States, its possessions, and Canada. The day a device ships into the European Union, the United Kingdom, Japan, or anywhere in Asia-Pacific, the territory provision becomes the most important wording in the policy, and the answer most founders assume it gives is wrong.

The Territory Provision Is the Gating Question

Every commercial liability policy carries a policy territory definition. The mainstream US form defines territory as the United States, its possessions, and Canada, with limited extensions for short-term operations and goods sold for use outside the US under specific conditions. The exclusions and extensions sit in the boilerplate, not the headline, which is why brokers writing routine accounts often leave them alone. For a device company, those provisions are not boilerplate. They decide whether a unit sold in Germany or used in Singapore is inside or outside the policy.

The reason for the limit is structural. The carrier underwrote a US risk: US courts, US damages norms, US legal defense costs, US currency. A claim brought in a foreign court raises every one of those variables, and the form was not priced for that exposure. The remedy is either a territory extension on the same policy, a separate international or worldwide products liability placement, or in some cases a difference in conditions program that fills the gaps between the domestic program and the foreign exposure. Where the company operates in several countries with mismatched local policies, a difference-in-conditions program harmonizes the coverage rather than relying on each local form.

Where the Exposure Actually Lives for a Device Company

The risk does not begin at the foreign port. It begins at the contract that puts the device into a foreign distributor’s hands. A distribution agreement signed with a European reseller, a Japanese hospital group, or an Australian medical supplier extends the manufacturer’s products liability into that jurisdiction the moment the first unit is sold. The signing-day insurance review is covered in what insurance you need before signing a distribution agreement, and the territory question sits at the center of that review.

The exposure also follows the device. An implantable, an active therapeutic device, or a monitoring device used on a patient in Berlin or Sao Paulo carries the same product-liability theories US plaintiffs use, brought under that jurisdiction’s tort or product-liability regime. EU member states operate under the Product Liability Directive and its 2024 update, the UK under the Consumer Protection Act 1987 as amended, and Asia-Pacific jurisdictions vary widely. A claim brought under any of those frameworks lands in a forum the US policy was not written to answer. The EU dimension specifically is mapped in what the EU MDR means for a US device company’s insurance.

What an International Program Has to Answer

Three things matter when extending the program to international distribution. The first is territory itself, whether the policy reaches the geography. The second is jurisdiction, whether the policy responds to claims brought in foreign courts under foreign law. The third is currency, whether limits and defense costs are denominated in a way that does not get eroded by exchange when the claim plays out. A US policy with worldwide territory but only US-court coverage is not a full answer, and a worldwide policy that pays in dollars when the judgment is denominated in euros or yen is not either.

The companion pieces of the program have to follow. Products liability for the commercial device needs an extension or a parallel international placement, and any clinical study run abroad has its own territory question that does not solve itself when the trial ends. Distribution agreements in foreign jurisdictions often demand additional insured status on terms a US-only policy cannot provide.

What to Do Now

Before any international shipment, pull your products liability and CGL forms and read the territory clause specifically. Confirm with your broker whether the policy reaches the foreign jurisdiction you are entering, whether it covers claims brought in foreign courts under foreign law, and whether the limit and defense are calibrated for the currency and cost structure of that jurisdiction. If any of those questions returns a no or a maybe, place the extension or a parallel international policy before the first unit leaves the country, not after.

A US-only program is a sound answer for a US-only business, and it is not a sound answer for a device company touching foreign markets. The fix is not exotic; it is recognized international placement structures sold by the same specialty markets that write the US product. A specialty review through Tower Street Insurance can confirm whether your current policy reaches where the device ships, and what it takes to close the territory gap.