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US exposure
A US class action is a lawsuit in which one or more named claimants sue on behalf of a larger group with a common claim. For insurance, it matters because many small losses become one large claim, testing your jurisdiction clause, aggregation wording and defence costs cover.
Part of: Public liability with US jurisdiction
In short
In US federal courts, class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. A court must certify the class, finding numerosity, commonality, typicality and adequacy, and the case must fit a Rule 23(b) type; damages classes usually need common questions to predominate. The Class Action Fairness Act gives federal courts jurisdiction over class actions worth more than $5 million with minimal diversity, which can include claims against UK companies. UK businesses with US customers, users or investors face product, privacy and securities class claims. Whether UK policies respond depends on US jurisdiction cover, US exclusions, aggregation and how defence costs sit against the limit.
Last reviewed 7 October 2026 by the Apex commercial team.
A class action lets one or a few named claimants sue on behalf of a much larger group who are not individually joined to the case. In US federal courts the procedure is governed by Rule 23 of the Federal Rules of Civil Procedure, the rules that govern civil proceedings in the US district courts.
A case does not become a class action because the claimant says so. The court has to certify the class, and Rule 23(a) sets four prerequisites that must all be met:
| Requirement | Rule 23(a) wording | What it means in plain terms |
|---|---|---|
| Numerosity | “the class is so numerous that joinder of all members is impracticable” | Too many people to bring them all in as named parties |
| Commonality | “there are questions of law or fact common to the class” | The same core issue runs through every member’s claim, such as one product defect or one data incident |
| Typicality | the representatives’ claims or defences “are typical of the claims or defenses of the class” | The named claimants are not unusual cases |
| Adequacy | the representatives “will fairly and adequately protect the interests of the class” | The named claimants and their lawyers can properly act for everyone |
Meeting Rule 23(a) is not enough. The class must also fit one of the types in Rule 23(b):
For a 23(b)(3) class, the court must direct “the best notice that is practicable”, and members can ask to be excluded. A judgment binds members who do not opt out. Any settlement needs court approval as “fair, reasonable, and adequate” under Rule 23(e), and Rule 23(f) lets a court of appeals permit an appeal from an order granting or denying certification.
Federal or state court? Under 28 U.S.C. § 1332(d), the Class Action Fairness Act gives federal district courts jurisdiction over class actions where more than $5,000,000 is in controversy and there is minimal diversity. That includes a class member who is a US citizen suing a defendant who is a citizen of a foreign state, such as a UK company. It does not apply if the proposed classes total fewer than 100 members. State courts have their own class action rules, which this page does not cover.
Class actions turn a large number of small individual losses into one large claim. That is the exposure a UK business takes on when it has many US customers, users or investors. The examples below are illustrative, not real cases.
Even where the business wins, defending a certification fight and the discovery that comes with it takes time and money. That is why the defence costs part of the policy matters as much as the limit.
Whether a UK policy responds depends first on territorial and jurisdiction limits, and then on the cover type. The table shows the usual pattern; every point is subject to the policy terms.
| Type of class claim | Policy usually engaged | Where the gaps commonly are |
|---|---|---|
| Bodily injury or property damage from a product | Product and public liability | US and Canada exclusions, US sub-limits, or cover limited to exports with no US presence. Claims for purely financial loss may fall outside. |
| Product “worth less than paid” claims | Often none | Liability policies commonly exclude the cost of recall and the product itself, and need injury or damage to trigger |
| Data breach or privacy | Cyber | Territorial scope, sub-limits for privacy liability, and exclusions for unlawful collection of data |
| Securities claims | D&O | Entity cover for securities claims is usually written only for listed companies; US-listed exposure is underwritten separately |
| Negligent advice or service to a class of clients | PI | US jurisdiction exclusions and aggregation of related claims |
Aggregation. Many wordings treat claims arising from one cause or a series of related acts as one claim. In a class action that can mean one excess, but also one limit for everyone. Defence costs. Check whether they sit inside the limit. In long US litigation, costs inside the limit can use up much of the cover before any settlement is paid. Punitive damages are commonly excluded or limited too.
For the liability side, see public liability with US jurisdiction; for directors, see our D&O insurance guide.
If this affects your business, these are the points a broker will ask about:
Speak to a broker
US-facing liability cover, placed by a named broker
Send us your current schedule, or tell us about the property if you are arranging cover for the first time. Or leave your number and a named broker will call you back, usually the same working day.
Apex Insurance Brokers is an independent insurance broker based in Bristol, established in 2009 and authorised and regulated by the Financial Conduct Authority. We are not tied to one insurer: we work with over 30 markets, including Lloyd’s syndicates through wholesale brokers, and every client has a named broker who handles the placement, mid-term changes, certificates for clients and the renewal.
Certification is a court’s decision that the case can proceed on behalf of the whole class. Under Federal Rule 23 the court must find numerosity, commonality, typicality and adequacy, and that the case fits one of the Rule 23(b) types. It is not a finding that the defendant is liable.
It can be. The Class Action Fairness Act gives federal courts jurisdiction over class actions worth more than $5 million where, among other things, a class member is a US citizen and a defendant is a citizen of a foreign state. Whether a court has jurisdiction over a particular company is a US legal question.
Only if the policy includes US jurisdiction and the claim is for injury or damage the policy covers. Many UK liability policies exclude or sub-limit US and Canadian claims, and claims for purely financial loss, such as overpayment, often fall outside. Check the jurisdiction clause and exclusions with your broker.
Usually not. Many policies have aggregation wording that treats claims arising from one cause or related acts as a single claim. That can mean one excess, but also a single limit available for the whole class. Read how your policy defines one claim.
In a Rule 23(b)(3) damages class, yes. The court must direct the best notice that is practicable, telling members they can ask to be excluded and that a class judgment binds those who stay in. Other class types do not have the same opt-out right.
Apex arranges liability, cyber and D&O cover for UK businesses trading with the US. Tell us how you sell there and we’ll check where your current cover stops. Or call 0117 325 0027.
Start your quote Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
