Expanding into US markets: What Nordic companies need to know about the liability risks

Despite increasing geopolitical tension and regulatory uncertainty, Nordic companies continue to expand into the U.S. market. For many, growth in North America continues to be strong, driven by market size, access to capital, innovation ecosystems, and customer demand.

Woman at the law office

The U.S. remains the world’s largest unified commercial market, offering scale that other nations cannot easily replicate. For growth‑oriented companies, especially in technology and digital services, the incentives are clear: vast revenue potential, faster market access, and closer ties to investors.

From a liability and risk management perspective, however, the U.S. market operates on entirely different principles as it is not merely “another jurisdiction.” Rather, it is a complex and unique liability landscape with legal standards, incentives, and exposure levels that differ significantly from the Nordics and broader Europe. Understanding this difference is critical before scaling operations, integrating U.S. technology platforms, or bringing products and services on the American market.

Why liability risk looks different in the U.S.

Nordic companies are accustomed to predictable regulatory enforcement, proportional damages, and strong administrative oversight. In the United States, liability risk is shaped by different logic and demands an alternate approach to risk management.

Key distinctions include:

  • Jury‑based civil litigation, where outcomes are more difficult to predict;
  • high damage awards, including so‑called nuclear verdicts exceeding USD 10 or even 100 million;
  • plaintiff‑driven litigation models, often supported by third‑party litigation funding;
  • a fragmented legal structure, with both federal and state‑level exposure.

“In practice, a single claim can jeopardize the survival of a company. Liability exposure should therefore be assessed not only by likelihood, but by taking a specific US severity potential into account,” explains William McKechnie, Head of Casualty Underwriting at If.

The incentive mismatch: when large damages become “Business as usual”

William McKechnie
William McKechnie, Head of Casualty Underwriting

One challenge for European companies operating in the U.S. is a clear imbalance in incentives. For global technology providers and large U.S. corporations, large settlements or fines may be absorbed as part of doing business. When revenues are measured in the tens of billions, even nine‑figure claims may not fundamentally alter behaviour.

"From a liability standpoint, this matters because contracts often transfer risk to suppliers and business partners. As a result, Nordic companies may find themselves responsible for regulatory compliance, compensation claims, or customer losses that exceed what would normally be expected based on their role in the business relationship," McKehnie explains. 

This asymmetry is particularly evident in areas such as data protection, digital services, software-as-a-service, and complex technology supply chains. It is therefore important for Nordic companies to consult U.S.-based counsel before entering into agreements with American partners, distributors, platform operators, or enterprise customers.

The opportunity – and the exposure: SaaS as a product

For companies delivering SaaS, AI tools, data platforms, or other digital solutions, one shift in particular demands immediate attention: in the United States, software and digital tools are increasingly being evaluated not only as services, but also through a product-liability lens.

Across much of Europe, software delivered as a service has traditionally been treated under service-law concepts, where liability is typically tied to professional negligence, contractual fault, and proportional damages. The provider is assessed on whether it performed its obligations competently.

“In the United States, this shift is already visible in how courts, regulators, and plaintiffs scrutinize SaaS platforms, AI systems, and digital tools. The focus is on how the technology is designed, how users rely on it, what safeguards are in place, and whether harm could have been prevented through clearer warnings, defaults, controls, or design choices”, Lindsay Dansdill, Partner at Chicago-based law firm Mercer Oak points out.

Under product-liability theories, a claimant may argue that the software was defective in its design, deployment, warnings, or safeguards, and that harm resulted. The focus may shift away from whether the provider acted negligently and toward whether the product experience itself was unreasonably dangerous or inadequately controlled.

Recent litigation illustrates this shift. In Raine v. OpenAI 1), plaintiffs alleged that ChatGPT’s design fostered emotional dependency, failed to provide adequate safeguards, and should have responded differently to crisis-related signals. The claim was framed around AI architecture, guardrails, monitoring signals, and product behavior rather than isolated chatbot outputs.

“For insurers and Nordic companies, the significance is clear: contractual labels describing software as a “service” may offer limited protection if the technology functions like a product in the real world”, Lindsay Dansdill, Partner at Chicago-based law firm Mercer Oak points out.

The EU response: expanding product and digital liability

Europe is also expanding its liability framework for digital technologies. The updated EU Product Liability Directive formally classifies software, AI systems, and digital services as “products,” lowers the burden of proof for claimants, and recognizes new categories of compensable harm, including data destruction.

For Nordic companies operating transatlantically, this creates a dual layer of exposure: U.S.-style litigation risk on one side of the Atlantic, and increasingly stringent EU liability on the other. The revised framework adopts concepts familiar from product-liability systems and may increase exposure for companies operating across both jurisdictions.

From a U.S. perspective, these developments may also influence litigation strategy.

“Plaintiffs may cite European developments as evidence that software, AI, and digital services should be treated as products, or that certain risks were foreseeable and should have been addressed through design controls, warnings, or safeguards," Dansdill describes.

Lindsay Dansdill, Partner Mercer Oak
Lindsay Dansdill, Partner at Mercer Oak law firm

The contract as a first line of defense

Contracts with U.S.-based distributors, resellers, platform operators, and enterprise customers frequently contain provisions that shift product liability exposure onto the software vendor, impose open-ended indemnification obligations, or include warranty representations that inadvertently support a product liability theory.

“It is important for Nordic companies to engage U.S.-based counsel before entering into agreements with American partners or customers,” Dansdill stresses. “What reads as a standard commercial contract to a European lawyer can contain enormous liability transfer provisions that would be immediately flagged by a U.S. practitioner," she concludes.

She notes that, at a minimum, an agreement covering between a software service provider and a U.S. based vendor should contain a liability cap covering all theories of recovery — including product liability — tied to fees paid in the preceding 12 months, and an express warranty disclaimer using Uniform Commercial Code (UCC)-compliant language that excludes implied warranties of merchantability and fitness for a particular purpose. Many states impose these warranties automatically unless they are conspicuously and specifically disclaimed; a general limitation clause may not be sufficient.

A consequential damages waiver should also be included, excluding lost profits, business interruption, and data loss and other indirect damages to the fullest extent permitted by the governing jurisdiction.

Beyond these baseline protections, vendors should negotiate narrowly scoped indemnification obligations limited to defined claim categories such as intellectual property infringement rather than open-ended language covering “any claims arising from use of the software.” Where appropriate, a product-liability carve-out or characterization of the agreement as a services contract may preserve an additional line of defense, even if it is not dispositive in all jurisdictions.

Governing law, venue and arbitration provisions

According to Dansdill, governing law and venue should be negotiated toward predictable commercial jurisdictions such as Delaware or New York, with language that prevents plaintiffs from electing their home court. Contracts should also clearly assign compliance responsibilities and acceptable use obligations to the customer and should restrict the customer’s ability to bring claims on behalf of end users or downstream parties whose conduct the vendor cannot control.

“Where the commercial relationship is business-to-business, mandatory arbitration clauses are worth serious consideration. Properly drafted, arbitration provisions can reduce litigation costs, preserve confidentiality, and keep disputes away from juries," she mentions.

When contracts are not enough: the role of insurance

Even a well-drafted contract is not an impenetrable shield. Courts may override limitation clauses, governing law provisions can be challenged, and product liability claims may be brought by end users or third parties, outside the original agreement.

For Nordic software companies entering the U.S. market, a comprehensive insurance assessment is essential. Key considerations include, for example:

  • whether the policy covers claims arising from software embedded in or bundled with a customer’s product offering;
  • contractual liability coverage, including whether indemnification obligations are covered when they exceed what the base policy would otherwise cover;
  • accumulation risk across multiple customers, users, deployment environments, or products using common code or shared infrastructure;
  • access to defense counsel with experience in American litigation and settlement dynamics; and
  • policy sublimits, exclusions, and aggregation clauses that could limit coverage in a multi-claimant or multi-jurisdiction scenario.

The central lesson is that U.S. exposure should be addressed before market entry, not after a dispute arises. 

For insurers, this requires underwriting that looks beyond traditional service-error scenarios and accounts for design-defect theories, downstream use, accumulation risk, and the potential severity of U.S. claims.

In the U.S. market, liability insurance is not merely a financial safety net, it is a strategic enabler of growth. Properly structured, it helps companies to absorb severe but low‑frequency losses and to navigate complex litigation environments. It also supports long‑term expansion without disproportionate risk concentration.

New EU Product Liability Directive

Meet our experts

Håkan Larsson, Liability RM Specialist | William McKechnie, Head of Casualty Underwriting