Business Insurance in Japan: A Guide for Foreign Companies

Decision map for a foreign company entering Japan: statutory schemes, contractually required cover, advisable commercial insurance, and the Article 186 question of whether the parent company's global policy can cover Japan

Most of the questions a foreign company asks about business insurance in Japan reduce to three. Which insurance is actually compulsory? Can the policies the parent company already holds cover the new Japanese entity? And, for whatever has to be bought locally, who do you buy it from and when? The answers are more specific than the usual "it depends", but they are not the answers a US, Chinese or European risk manager would expect by analogy with home. Japan has no general statutory requirement that a company carry commercial property or liability insurance. It does have statutory schemes for employees and vehicles that attach from the first day of business. And it has a rule, Article 186 of the Insurance Business Act, under which a foreign insurer without a Japanese licence may not, as a rule, insure property located in Japan or people resident in Japan, so a parent company's global policy is a thing to check against, not a substitute for local cover.

This guide is written for the people who have to make those decisions: the CFO, general counsel, risk or insurance manager and market-entry lead at the parent company, and the managers of the Japanese subsidiary or branch who will be asked to explain Japan to head office. It sets out how business insurance in Japan is structured, what Article 186 and the permission regime under it mean for a controlled master program, how Japan differs from the United States, China and the EU on ten points, which Japanese risks need attention, who the major non-life insurers are, how placement works through insurers, agents and brokers, and what to arrange at each stage from pre-entry to post-launch. It closes with a checklist for reconciling the Japanese policies with the parent's program.

Everything here is general. The actual requirements turn on your entry structure, industry, lease and customer contracts, headcount, asset base and the terms of the parent's program. Statutes and figures were checked on 28 October 2026 against the primary sources listed at the end.

This article is a general explanation. It does not describe any particular insurer, product, policy or endorsement, and nothing in it is legal, tax or regulatory advice. Questions on the application of the Insurance Business Act, labour insurance or social insurance should be put to the Financial Services Agency, the Ministry of Health, Labour and Welfare or a qualified adviser. Whether a given claim is paid is decided by the insurer under the policy wording and the facts of the case.

SummaryKey points

Japan does not oblige companies in general to carry commercial property, liability, D&O or cyber insurance. What is compulsory are statutory schemes: workers' accident compensation and employment insurance for anyone who employs a worker, health insurance and employees' pension for incorporated entities and branches, and compulsory automobile liability insurance (CALI) for every vehicle.
Article 186 of the Insurance Business Act prohibits, as a rule, a foreign insurer with no branch in Japan from insuring property located in Japan or persons resident in Japan. The prospective policyholder may apply to the Prime Minister (via the Financial Services Agency) for permission before applying for such a contract; reinsurance, international transit cargo, overseas travel and certain marine and aviation risks are excluded from the rule.
A controlled master program with DIC/DIL or financial interest cover is a common structure, but none of those devices automatically resolves the Article 186 question for a Japanese entity. The practical foundation is a locally admitted policy, with the master program checked for overlap and gaps.
Standard commercial fire insurance in Japan excludes earthquake, volcanic eruption and tsunami. The government-backed earthquake insurance scheme covers only residential buildings and household contents, so a business must add earthquake cover separately, usually with its own limits and deductibles.
Japanese insurance agents act for the insurer and may be exclusive to one insurer or represent several; insurance brokers are a separate registered category that acts for the customer. Ask which capacity applies before you brief anyone on your placement.

Enquiries about reviewing your organisation's insurance in Japan are welcome

No obligation to take out a policy

The short answer: what a foreign company actually has to insure in Japan

The clearest way to start is to separate four things that are often run together: what the law requires of every employer or vehicle owner, what your contracts require, what is advisable given your exposures, and what the parent company already holds.

Statutory. From the day a business starts employing a worker in Japan, it is within the scope of workers' accident compensation insurance (rosai hoken) and employment insurance. The Ministry of Health, Labour and Welfare states that workers' accident compensation insurance applies, as a rule, to every business that employs even one worker, regardless of size or industry. The Japan External Trade Organization (JETRO) explains that branches and sales offices of overseas companies are treated as incorporated businesses for health insurance and employees' pension purposes and that labour insurance applies to the workers of a representative office, even though the office itself is not registered. Every motor vehicle must have compulsory automobile liability insurance under Article 5 of the Automobile Liability Security Act before it may be driven. These are public or statutory schemes, not commercial policies, and they are not optional.

Contractual. Office leases, customer agreements, construction contracts, logistics and warehousing contracts and loan agreements in Japan frequently require insurance: a tenant's liability and contents cover under a lease, products liability with a certificate for a large customer, contractors' cover on a project. These are obligations you take on by signing, and the required lines, limits and certificates are set by the counterparty.

Advisable. Commercial property, business interruption, general and products liability, professional liability, D&O, cyber, marine cargo, commercial auto beyond CALI, and employer's top-up to the statutory workers' scheme are, with few exceptions, voluntary in Japan. Whether to carry them is a decision about your risk appetite and your exposures, including the ones specific to Japan such as earthquake.

Already held. The parent's global program may be written to include subsidiaries worldwide. Whether it may lawfully respond to a risk located in Japan, whether the Japanese entity is actually a named or covered insured, and whether a claim could be paid to the Japanese entity are three different questions, and Article 186 sits behind all of them.

The rest of this guide takes each of these in turn. If you read only one more section, read the next one on Article 186, because it determines how much of the rest you will have to buy locally.

How business insurance in Japan is structured

Public and statutory schemes

Four public schemes meet every foreign employer in Japan. Workers' accident compensation insurance covers work and commuting injuries and is administered through the Labour Standards Inspection Office; the insurance relationship arises by law on the day the business starts (Article 3 of the Act on Collection of Labour Insurance Premiums). Employment insurance covers unemployment and related benefits. Health insurance and employees' pension insurance apply to all incorporated entities, which for this purpose include the Japanese branch of a foreign company. Compulsory automobile liability insurance (CALI) is a statutory third-party bodily-injury scheme that every vehicle must carry. These are separate from commercial non-life insurance. A company that has arranged commercial policies but has not filed its labour-insurance enrolment is not compliant, and a company that has filed everything but carries no commercial cover is compliant but exposed.

Commercial property and casualty insurance

The commercial lines available in Japan correspond broadly to what an international risk manager would expect: commercial property (in Japan usually written as fire insurance with extensions), business interruption, general and public liability (in Japan commonly split by cause into premises, contractors' and products liability, or combined in a package), professional liability and errors and omissions, directors' and officers' liability, cyber, commercial automobile, marine cargo and transit, and employer's top-up cover above the statutory workers' scheme, usually written as a form of business accident or employer's liability insurance. The names, structure and standard exclusions differ from US and European forms, which is the subject of the comparison section below.

Contractually required insurance

Japanese commercial contracts are often less prescriptive about insurance than US contracts, but the requirement is there in the places that matter. Commercial leases commonly require the tenant to insure its contents and improvements and to carry liability cover for damage to the leased premises, with the landlord insuring the structure. Large Japanese customers ask suppliers and distributors for proof of products liability insurance, sometimes with the customer named as an additional insured. Construction contracts specify contractors' all-risks and liability cover. Logistics, warehousing and supply agreements allocate risk of loss and may require cargo or property cover. Lenders may require property insurance with the lender's interest noted.

Three concepts from international practice need translation. A certificate of insurance is, in Japan, a document issued by the insurer, usually through the agent, confirming the existence and content of a policy; whether an English-language certificate is available for a given commercial policy is a question for the insurer. Additional insured status exists as an endorsement under some Japanese liability wordings (for example, an additional insured clause for products liability that treats the additional insured and the named insured as third parties to each other), but it is not a universal, standard form available on every line, and its scope is not identical to a US additional-insured endorsement. Waiver of subrogation also exists as a non-exercise-of-recovery clause under some wordings. Do not assume that a clause common in a US or UK contract can be reproduced on every Japanese policy; confirm it line by line before you sign a contract that promises it.

Commercially recommended insurance

The table below classifies the main lines. The classification is general and will differ for a given company: a line that is "generally recommended" for a manufacturer may be irrelevant to a three-person sales office, and a line that is voluntary in law may be contractually required for you.

Table 1: Business insurance in Japan by requirement category (general classification, as of 28 October 2026)
Line	Category	Basis and notes
Workers' accident compensation insurance, employment insurance	Statutory	Applies to any business employing a worker; labour-insurance filings with the Labour Standards Inspection Office and Hello Work. Public scheme, not a commercial policy.
Health insurance, employees' pension insurance	Statutory	All incorporated entities, including Japanese branches of foreign companies. Representative offices are treated as sole-proprietor establishments (JETRO).
Compulsory automobile liability insurance (CALI)	Statutory	Every vehicle (Article 5, Automobile Liability Security Act). Covers bodily injury to third parties only, with statutory limits.
Sector-specific requirements	Statutory (industry-specific)	Licensing laws for particular activities may impose their own insurance or security requirements. Check the licensing statute for your activity.
Tenant's contents and liability cover	Contractually required (typical)	Commercial leases. Landlord usually insures the structure.
Products liability with certificate	Contractually required (typical)	Customer and distribution agreements, especially with large Japanese buyers.
Contractors' all risks, contractors' liability	Contractually required (typical)	Construction and installation contracts.
Commercial property (fire) with earthquake extension	Generally recommended	Earthquake, eruption and tsunami are excluded from standard commercial fire insurance and must be added separately.
Business interruption	Generally recommended / case-by-case	Earthquake-related interruption usually requires the earthquake extension on the property side as well.
General and premises liability	Generally recommended	Any entity with premises, visitors or operations in Japan.
Voluntary automobile insurance (liability above CALI, property damage, own vehicle)	Generally recommended	CALI does not cover property damage or the insured vehicle.
Employer's top-up (business accident / employer's liability)	Generally recommended	Statutory benefits do not extinguish the employer's civil liability.
Directors' and officers' liability	Case-by-case / generally recommended for a subsidiary with local directors	Japanese directors owe duties under the Companies Act; parent D&O may or may not cover subsidiary directors.
Cyber	Industry-specific / generally recommended for data-holding businesses	Japanese personal-information rules and incident notification apply to the Japanese entity.
Professional liability / E&O	Industry-specific	Technology, consulting, engineering, licensed professions.
Marine cargo, transit	Industry-specific	Importers, exporters, distributors. International transit cargo is one of the exclusions from Article 186.
Machinery breakdown, product recall, trade credit, event cancellation, environmental	Case-by-case	Depends on operations.

Can your parent company's insurance cover the Japanese operation?

Japan's non-admitted insurance rule: Article 186

Article 186(1) of the Insurance Business Act (Act No. 105 of 1995) provides that a foreign insurer that has not established a branch or other office in Japan shall not conclude an insurance contract relating to persons with an address or residence in Japan, property located in Japan, or ships or aircraft of Japanese nationality, other than contracts excluded by Cabinet Order. Article 186(2) places the obligation on the other side of the transaction: a person who intends to apply for such a contract must obtain the permission of the Prime Minister before making the application. The Financial Services Agency (FSA), in a public notice of 17 October 2024 warning about solicitation by unlicensed foreign insurers, summarises the rule as a prohibition on "direct overseas insurance" in principle, with permission as the exception, and notes that applying without permission may attract a non-criminal fine of up to 500,000 yen.

Three features of the rule matter in practice.

First, it is defined by the location of the risk, not the nationality of the policyholder. A Japanese subsidiary's office contents, a branch's leased premises, and employees resident in Japan are all within the rule whoever the ultimate parent is.

Second, it has exclusions. The Cabinet Order excludes reinsurance and contracts relating to Japanese-flag ocean-going vessels and commercial aircraft, their cargo and the liabilities arising from them. The Cabinet Office Ordinance adds space risks, cargo in international transit while located in Japan, and the injury, sickness and baggage of overseas travellers during overseas travel. International marine cargo and overseas travel programs are therefore commonly handled differently from property and liability.

Third, permission is a real procedure, not a dead letter. Article 186(3) lists the grounds on which the FSA must refuse, including that an equivalent or better contract could easily be concluded with a Japanese-licensed insurer. The Ordinance for Enforcement sets a standard processing period of sixty days, allows the application documents to be filed in English without translation, and permits an opinion letter from a registered insurance broker to be attached. In 2021 the FSA proposed simplifications aimed at employers who wish to extend home-country group cover to staff transferred to Japan. In other words, permission is designed for cases where the Japanese market genuinely cannot supply the contract, and it is granted contract by contract, including on renewal.

What the rule does not do is make every piece of foreign cover unlawful. A program issued to the parent abroad, under which the parent is the insured and the subject matter is the parent's own interest, is not the same thing as a foreign insurer insuring Japanese property; the line between the two is exactly where financial interest cover sits, and it is a legal question for each program.

Locally admitted insurance

The counterpart is insurance written by an insurer licensed in Japan: a Japanese non-life insurance company, the Japanese branch of a foreign insurer holding a foreign non-life licence under Article 185, or the Society of Lloyd's under its specific licence. As of 19 October 2026, the FSA lists 57 licensed non-life insurers: 35 Japanese companies (a figure that includes Japanese subsidiaries of foreign groups and reinsurers), 21 foreign insurers operating through branches, and Lloyd's. A policy from any of these is "locally admitted" in the international sense, is subject to Japanese policy wordings, Japanese claims handling and Japanese consumer and supervisory law, and is what landlords, customers and courts in Japan expect to see.

Controlled master programs, DIC/DIL, financial interest cover and fronting

International insurers and brokers describe a controlled master program as a master policy issued in the parent's country combined with locally admitted policies in the countries where the group operates. The master typically carries difference-in-conditions (DIC) and difference-in-limits (DIL) clauses: where the local policy's conditions are narrower than the master's, or its limits are exhausted, the master responds for the difference, provided a local policy is in place. Financial interest cover (FINC) is a different device: rather than insuring the subsidiary's loss, the master insures the parent's financial interest in the subsidiary, so that a loss in a country that does not permit non-admitted insurance is paid to the parent at home. Fronting is an arrangement in which a locally licensed insurer issues the local policy and reinsures most of the risk to the group's chosen carrier abroad.

Each of these is a well-established structure. None of them is a way around Article 186. A DIC/DIL clause assumes a local policy exists; it is a supplement to local cover, not a replacement. Financial interest cover is drafted precisely so that the insured is the parent and the payment goes to the parent; whether a particular FINC wording respects the line that Japanese law draws, how the parent then funds the subsidiary, and how that funding is treated for Japanese tax purposes are questions for the insurer's legal team and your Japanese tax adviser, not assumptions. Fronting produces a Japanese policy in the ordinary way, so the Article 186 question falls away, but the Japanese fronting insurer carries the contractual obligation to you and will price and underwrite accordingly. Treat all three as structures to be examined for your program, not as answers that have already been given.

Two companion articles go deeper. Non-admitted insurance in Japan sets out the legal framework of Articles 185, 186 and 337, the exclusions and the permission procedure; global insurance programs in Japan works through the design of the Japanese local policy within a controlled master program, with a worked hypothetical.

Parent and subsidiary coverage gaps: the reconciliation checklist

Whether or not the group runs a master program, someone has to lay the parent's policies next to the Japanese policies and read both. The list below is the minimum.

Table 2: Reconciling the parent's program with the Japanese policies (checklist)
Item	What to confirm
Named insured / additional insured	Is the Japanese entity named on the master, and by its registered Japanese name? Is the parent an additional insured on the Japanese policy if a customer contract requires it?
Covered entities	Does "subsidiary" in the master include a branch or a representative office, which are not separate legal persons?
Territorial scope	Does the master's territory include Japan for both occurrence and claims brought? Does the Japanese policy cover exports and overseas activity?
Jurisdiction and governing law	Which policy responds to a claim filed in a Japanese court? In a US court against the Japanese entity?
Limits	Per occurrence, aggregate, and whether the Japanese policy's limit erodes the master's aggregate.
Deductibles / retentions	Currency, who bears the retention, and whether the Japanese entity can fund it.
Exclusions	Earthquake and flood on property; contractual liability, professional services and cyber on liability; local statutory schemes.
Claims notification	Who notifies whom, in which language, within what time. Japanese policies expect notification by the policyholder through the agent.
Claims-made versus occurrence	D&O, professional and cyber are commonly claims-made; general liability is commonly occurrence-based. Retroactive dates and run-off on a change of program.
Policy period	Japanese policies are commonly annual and may not align with the master's anniversary. Align or document the gap.
Local insurance requirements	Article 186, CALI, labour insurance, lease and customer requirements, certificate language.

A Japanese reader will recognise this as the same exercise described, from the opposite direction, in our Japanese article on reconciling a Japanese parent's master policy with overseas local policies.

Japan compared with the United States, China and the EU

The comparison below is organised to answer one question: what should a risk manager from each of these systems change in the way they approach Japan? Each row is labelled by the kind of difference it describes, because a difference fixed in statute, a difference of market custom, and a difference that varies by product or by state or member state call for different treatment.

Table 3: Business insurance in Japan, the United States, China and the EU on ten points (statute and published practice, as of 28 October 2026)
Point	Japan	United States	China	EU
1. Supervisory structure [statute]	National: Financial Services Agency under the Insurance Business Act.	State-based under the McCarran-Ferguson Act; the NAIC coordinates state regulators but is not itself a regulator.	National: National Financial Regulatory Administration (NFRA), established in 2023 on the basis of the former CBIRC.	Home-state supervision under Solvency II (Directive 2009/138/EC, as amended by Directive (EU) 2025/2 applying from 30 January 2027); EIOPA coordinates. The Insurance Distribution Directive governs intermediaries.
2. Statutory insurance for businesses [statute]	Labour insurance (workers' accident compensation, employment), health and pension insurance, CALI. No general commercial-insurance mandate.	Workers' compensation mandatory for most employers in every state except Texas (NAIC); state minimum auto liability limits. No general commercial-insurance mandate.	Work-related injury insurance (gongshang baoxian) for all employing units (Regulation, Art. 2); compulsory traffic accident liability insurance; work-safety liability insurance compulsory for eight high-risk sectors under the Work Safety Law Art. 51 and the 2025 implementing measures.	Motor third-party liability compulsory in all member states (Directive 2009/103/EC); other compulsory lines are set by member state and profession, for example statutory accident insurance in Germany (SGB VII) and ten-year construction liability insurance in France.
3. Direct insurance by foreign (non-admitted) insurers [statute]	Prohibited in principle for Japanese risks, with Cabinet Order exclusions and case-by-case permission (Art. 186).	Permitted through the surplus lines market: non-admitted insurers may write risks the admitted market will not, via a licensed surplus lines broker, under state law and the federal NRRA (2010). Surplus lines premium was about 12% of the US P&C market in 2024 (NAIC).	Domestic legal persons that need domestic insurance must insure with insurers in the PRC (Insurance Law, Art. 7, current numbering). Representative offices of foreign insurers may not conduct insurance business (Art. 80).	EU/EEA insurers may write risks in any member state under passporting. Third-country insurers require branch authorisation in the member state (Solvency II Art. 162); cross-border writing without a branch is governed by each member state's law.
4. Role of locally licensed insurers [statute / practice]	57 licensed non-life insurers (FSA, 19 October 2026). Locally admitted policies are the expected form for property and liability.	Admitted carriers are the default; surplus lines fill the gaps without state guaranty-fund protection.	Domestic PRC insurers, including foreign-invested insurance companies licensed in China.	Any EEA-authorised insurer, by establishment or services.
5. Employee injury [statute]	Public workers' accident compensation scheme; employer's civil liability survives, so a voluntary top-up is common.	State workers' compensation systems (private insurers, state funds, or monopolistic state funds in some states), with employer's liability cover alongside.	Social-insurance scheme funded by employer contributions; commercial employer's liability cover is a separate market.	Member-state social-security schemes (for example Germany's Berufsgenossenschaften under SGB VII); employer's liability cover varies by country.
6. Corporate liability insurance [practice / product]	Premises, contractors' and products liability written separately or as a package; Japanese-language wordings. No standard industry form equivalent to ISO CGL.	Commercial General Liability and Business Owners Policy on ISO standard forms with carrier variations; a mature additional-insured and certificate culture.	Commercial liability products from PRC insurers; sector mandates for high-risk industries.	Varies by member state; professional liability compulsory for certain professions (for example lawyers and auditors in Germany).
7. Property and natural catastrophe [statute / product]	Earthquake, eruption and tsunami excluded from standard commercial fire cover; added by endorsement with separate limits. Government-backed earthquake insurance is residential only.	Catastrophe perils (earthquake, flood, named storm) commonly excluded, sub-limited or written separately depending on region and carrier.	Property cover from PRC insurers; catastrophe terms by product.	Varies by member state and by product; no EU-wide rule on catastrophe cover for businesses.
8. Agents and brokers [statute]	Agents act for the insurer and may be exclusive or multi-insurer; the insurer is liable for the agent's conduct in solicitation (Art. 283). Brokers are separately registered (Art. 286), post a deposit, owe a statutory duty of good faith to the customer (Art. 299), and only mediate. 64 brokers were registered as of 1 September 2026.	Producer licensing by state; independent agents and brokers both common; surplus lines broker licence for non-admitted placements.	Agents and brokers licensed under the Insurance Law and NFRA rules.	Insurance intermediaries defined and regulated under the IDD; agent and broker categories set by member state.
9. Fit with a global program [practice]	Japan is typically a "local policy required" country in global programs; DIC/DIL and FINC are used around, not instead of, the local policy.	Master policies are commonly issued in the US; local policies abroad for compliance.	Treated as a non-admitted-restricted country in global programs; FINC commonly discussed.	Within the EEA, one policy can cover several member states; outside the EEA the same local-policy logic applies.
10. Contract and claims practicalities [practice]	Japanese-language policies and claims; the agent is the day-to-day contact; certificates issued by the insurer via the agent; annual periods.	English forms, broker-managed, certificate and additional-insured requests routine.	Chinese-language policies; local claims handling.	Language of the member state; broker-managed in most corporate placements.

For a US company

The habits that need changing are three. The first is the surplus lines reflex: in Japan there is no equivalent market in which a non-admitted carrier can be used once the admitted market declines, and the route for a genuinely unavailable contract is the Article 186 permission. The second is the vocabulary: workers' compensation, CGL and BOP are US product categories built on ISO forms, and Japan's public workers' scheme, its liability lines split by cause, and its package policies do not map one to one. Ask what each Japanese policy covers rather than which US form it resembles. The third is contract practice: additional insured, waiver of subrogation and certificate language that a US counterparty regards as routine need to be checked against what the Japanese insurer will actually endorse. On litigation, the only point we will make is a cautious one. Swiss Re Institute's 2024 study of litigation-driven claims inflation puts US "social inflation" at a twenty-year high in 2023 and tabulates lower indices for Japan; that is one index, not a conclusion that liability claims in Japan are small, and product liability suits and large awards do occur in Japan. A fuller translation guide for US risk managers, from workers' compensation to surplus lines, is in our article on business insurance in Japan for US companies.

For a Chinese company

The structure will feel familiar in one respect: like China, Japan requires domestic risks to be insured domestically, and both countries have a public work-injury scheme and compulsory motor liability. The differences are in the next layer. China's work-safety liability insurance mandate for eight high-risk sectors (mining, hazardous chemicals, fireworks, transport, construction, civil explosives, metal smelting and fishery production, under the measures published on 2 April 2025) has no counterpart in Japan; Japanese construction and manufacturing liability cover is contractual or voluntary. Chinese practice also varies by province and by sector regulator, whereas Japanese insurance regulation is national. And the Japanese market is served largely through agents acting for the insurer, so a Chinese parent used to dealing with a broker should establish early which kind of intermediary it is talking to. Our article on business insurance in Japan for Chinese companies compares the mandatory schemes, translates the common Chinese product names and covers the sectors in which Chinese groups most often enter Japan.

For an EU company

The EU is not one insurance system. Solvency II harmonises prudential supervision, passporting lets an insurer authorised in one member state write risks in another, the Motor Insurance Directive makes motor third-party liability compulsory everywhere, and the IDD frames intermediary regulation; but which lines are compulsory for a business, how workers' injuries are compensated, and what a broker is, remain national questions. Two consequences follow for Japan. Passporting stops at the EEA border, so an insurer that covers your German, French and Dutch entities on one policy cannot extend that policy to Japan without a Japanese licence or an Article 186 permission. And the compulsory lines you know at home, such as Germany's statutory accident insurance with its employer notification duty within a week of starting business, or France's ten-year construction liability insurance, have Japanese counterparts only in part: Japan's labour insurance is the analogue of the first; nothing in Japanese law corresponds to the second. Our article on business insurance in Japan for European companies separates what EU law harmonises from what stays national, with Germany, France and the UK as examples.

What changes in your procurement process

Whatever your home system, entering Japan usually means adding four steps: an Article 186 review of the global program before relying on it; a locally admitted placement for property, liability and vehicles; a check of each Japanese contract's insurance clause against what a Japanese insurer will endorse; and a clear decision about who in Japan is the policyholder, the named insured and the claims contact.

The risks that matter in Japan and the insurance that responds

Listing products is less useful than starting from what can go wrong. The table pairs the exposures that most often surprise a foreign entrant with the lines that respond, and with the questions to ask of a Japanese policy.

Table 4: Key risks for foreign companies in Japan and the insurance that responds (general practice; coverage depends on the policy)
Risk	Insurance	Requirement	Typical coverage	Important exclusions and limits	Procurement consideration in Japan
Earthquake, eruption, tsunami damage to premises, equipment and stock	Commercial fire (property) insurance with an earthquake extension	Voluntary; may be required by lease or lender	Physical damage from fire and other named perils; earthquake only if added	Earthquake excluded as standard; the extension commonly carries its own limit (often a fraction of the sum insured) and deductible. The government-backed residential earthquake scheme does not apply to office-only buildings or factories (Ministry of Finance).	Decide the earthquake limit explicitly; check whether the parent's property program excludes Japan earthquake or sub-limits it.
Typhoon, heavy rain and flood	Commercial fire insurance (wind, hail, flood perils)	Voluntary	Wind and flood damage where included	Flood may be sub-limited or subject to a separate deductible; basement and ground-floor stock is the usual loss.	Confirm flood is included and at what terms; many Japanese commercial policies allow flood to be reduced to cut premium.
Business interruption after a disaster	Business interruption (profit) insurance, extra expense cover	Voluntary	Loss of gross profit and increased cost of working during the indemnity period	Follows the property perils, so earthquake interruption is excluded unless earthquake is added on both; indemnity period caps; supplier extensions are limited.	Model the restoration period for a Japanese site; check whether the master BI cover counts a Japanese earthquake loss.
Injury to visitors, damage to third-party property from premises or operations	Premises (facility owner's) liability insurance	Voluntary; often required by lease	Legal liability for bodily injury and property damage arising from ownership, use or management of premises and from work performed	Contractual liability beyond legal liability, professional services, pollution, product-related loss, employees' injuries (statutory scheme).	Confirm the premises listed, the insurer's handling of negotiations with claimants, and defence costs.
Product defects causing injury or damage	Products liability insurance	Voluntary; commonly required by customers	Legal liability for injury or damage caused by products sold or work completed	Recall costs, the product itself, overseas exports unless extended.	Decide whether exports are covered in Japan or on the parent's program; see our Japanese article on certificates and additional insureds for products liability.
Construction and installation accidents	Contractors' all risks, contractors' liability	Contractually required on projects	Damage to the works, liability arising from the works	Design defects, delay, workers (statutory scheme).	Match the contract's required limits and period.
Errors in professional or technology services	Professional liability / E&O, IT liability	Industry-specific; required by some clients	Legal liability for financial loss caused by negligent services	Guarantee of results, contractual penalties, intentional acts.	Claims-made basis; align retroactive dates with the parent's program if the Japanese entity was previously covered there.
Claims against directors of the Japanese entity	Directors' and officers' liability insurance	Voluntary	Defence costs and damages for claims against directors and officers	Dishonesty, personal profit, prior claims; whether the parent's D&O covers subsidiary directors depends on its wording.	Japanese company directors owe duties to the company under the Companies Act; a subsidiary with resident directors should check its position rather than assume the parent's policy responds. See our Japanese article on D&O exclusions.
Cyber incidents and data breaches	Cyber insurance	Voluntary; may be required by customers	Incident response costs, liability to affected parties, in some products business interruption from system outage	Fines where uninsurable, improvement costs, infrastructure outside the insured's control; business interruption may be unavailable for some IT-service businesses.	Japanese personal-information notification obligations fall on the Japanese entity; confirm whether the group cyber policy covers Japanese incidents and who runs the response in Japanese. See our cyber insurance page (Japanese).
Cargo loss in transit	Marine cargo / transit insurance	Industry-specific; required by some trade terms	Physical loss or damage to goods in transit	Inherent vice, delay, packing.	International transit cargo is excluded from the Article 186 rule, so group marine programs commonly continue to apply; domestic transit may be placed in Japan.
Supply chain interruption	Contingent business interruption extensions	Voluntary	Loss from damage at named suppliers or customers	Usually limited to named suppliers and physical damage triggers.	Rarely sufficient on its own; pair with a business continuity plan.
Machinery breakdown	Machinery insurance	Voluntary	Sudden and accidental breakdown of plant	Wear and tear, gradual deterioration.	Relevant for manufacturing and data-centre operations.
Employee injury, employment disputes	Statutory workers' accident compensation plus voluntary top-up (business accident / employer's liability); employment practices liability where available	Statutory for the public scheme; voluntary for the rest	Statutory benefits; top-up pays additional compensation and the employer's civil liability	Top-up policies do not replace the statutory scheme; EPL availability and scope vary.	File labour-insurance enrolment first; then design the top-up. See our Japanese article on employer's top-up cover.
Vehicle accidents	CALI plus voluntary automobile insurance	CALI statutory; voluntary cover generally recommended	CALI: third-party bodily injury within statutory limits. Voluntary: unlimited bodily injury, property damage, own vehicle, passengers	CALI does not cover property damage or the vehicle; voluntary terms vary.	Company fleets can be rated as a fleet; the parent's motor program will not cover Japan-registered vehicles.

One point in that table deserves a paragraph on its own, because it is the one most often misunderstood from abroad. Japan's government-backed earthquake insurance scheme, created by the Earthquake Insurance Act of 1966, covers only buildings used for residence and household contents (Article 2(2)); the Ministry of Finance states that office-only buildings and factories are outside it and that ordinary fire insurance excludes earthquake loss. A business therefore obtains earthquake cover only by adding it to its commercial property policy on the insurer's terms, with limits and deductibles that are a matter of negotiation and capacity. A parent reading "Japan has a national earthquake insurance scheme" and assuming the subsidiary's warehouse is covered has made an error that only the policy schedule can correct. Our Japanese article on earthquake cover for businesses goes into the mechanics.

Japan's non-life insurance market and its major insurers

Japan's non-life market is large and concentrated. The General Insurance Association of Japan (GIAJ) reports net premiums written by its member companies of 9,972.6 billion yen for fiscal 2025 (the year to March 2026), up 4.1%, with 31 member companies as of 1 April 2026. The GIAJ counts 57 non-life insurers in Japan as of the same date: 35 domestic companies, a figure that includes foreign-owned companies incorporated in Japan, and 22 foreign insurers including Lloyd's. The FSA's licence list of 19 October 2026 gives the same total on a slightly different split.

The four largest insurers belong to three groups. The table gives their net premiums written for fiscal 2024 (the year to March 2025), taken from each company's securities report on a single, consistent definition.

Table 5: Japan's four largest non-life insurers (fiscal 2024, non-consolidated net premiums written; company securities reports filed on EDINET)
Company (legal name)	Group	Net premiums written, FY2024	Published corporate lines and international program information
Tokio Marine & Nichido Fire Insurance Co., Ltd.	Tokio Marine Holdings	2,518.8 billion yen	Property, package, auto, liability (premises, contractors', products, cyber, overseas PL, D&O), construction, workers' top-up, credit, marine. Group network in 45 countries and regions (March 2025). No dedicated public page on an international program product was found.
Sompo Japan Insurance Inc.	SOMPO Holdings	2,229.9 billion yen	Package, workers', auto, property, liability (including a Japanese-form CGL), construction, cyber. Publishes a "SOMPO Worldwide Program" combining a Japan-issued master with local policies, with multinational units in five countries; as of September 2025 it is described as applying to cyber and D&O.
Mitsui Sumitomo Insurance Company, Limited	MS&AD Insurance Group Holdings	1,679.2 billion yen	Property, auto, construction, employee and executive lines, liability (including D&O and cyber), cargo, marine. Network in about 40 countries and regions. No dedicated public page on a global program product was found.
Aioi Nissay Dowa Insurance Co., Ltd.	MS&AD Insurance Group Holdings	1,430.4 billion yen	Auto including telematics, liability, cyber, property package, workers' top-up and disability, construction. Offices in 32 cities overseas. No public page on a global program product was found.

Together, on our own calculation from the figures above against the GIAJ member total for the same year, the four companies wrote roughly four-fifths of member net premiums; the figure is an approximation because the denominator is the association's member base rather than the whole market. One structural change is pending. On 13 February 2026, MS&AD Insurance Group Holdings announced that Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance had signed a merger agreement under which, subject to shareholder approval and regulatory authorisation, the two will merge on 1 April 2027 with Mitsui Sumitomo Insurance as the surviving company under the name Mitsui Sumitomo Aioi Insurance Company, Limited; the holding company is to be renamed Mitsui Sumitomo Insurance Group, Inc. Until that date the two remain separate licensed insurers, and policies are issued in their current names.

Foreign-owned insurers are part of the licensed market. AIG General Insurance Company, Ltd. and Chubb Insurance Japan (Chubb損害保険株式会社) are Japanese-incorporated companies; AIG publishes a multinational page describing controlled master programs, and Chubb's Japan English site addresses multinational corporations. Allianz's Japanese subsidiary operates as Allianz Commercial in Japan with a multinational offering. Zurich, HDI Global SE, Starr, Swiss Re Corporate Solutions (as Swiss Re International SE) and The New India Assurance operate through Japanese branches under foreign non-life licences, as do several credit insurers and P&I clubs; the Foreign Non-Life Insurance Association of Japan lists 20 full members. The Society of Lloyd's holds a specific licence and publishes a Japan country profile describing the conditions under which Lloyd's can write Japanese risks from outside Japan. We have not ranked these companies on price, underwriting flexibility or claims service, because no published, like-for-like data would support it; the right insurer for a given risk is a matter of the risk, the wording and the capacity available at the time.

A note on our own position, because it bears on how to read this section. Nayuta Insurance Technologies is an insurance agency; in non-life insurance it acts as an agent for a specific insurer and does not operate a model of comparing and recommending products across multiple insurers. The market description above is offered as context; it does not mean that we can place business with each of the insurers listed. Our policy on comparative recommendation (Japanese) sets this out.

How commercial insurance is procured in Japan

The distribution structure: insurers, agents and brokers

A foreign risk manager used to a brokered market needs to understand one distinction before anything else. Under the Insurance Business Act, a non-life insurance agent is a person entrusted by a non-life insurer to act as its agent or intermediary in concluding insurance contracts (Article 2(21)); the insurer is liable for loss the agent causes the policyholder in soliciting (Article 283). An agent may be exclusive to one insurer or may represent several, and supervisory guidelines require the agent to tell the customer which insurers it can handle. An insurance broker is a different category: registered with the FSA under Article 286, required to lodge a deposit before mediating any contract (Article 291), owing a statutory duty to mediate in good faith for the customer (Article 299), and limited to mediation, that is, to arranging the contract rather than concluding it on the insurer's behalf. The FSA's register listed 64 brokers as of 1 September 2026, among them the Japanese broking entities of the large international groups. Some international groups also operate agency entities in Japan, and some corporate placements in Japan are made through a group's agency rather than its brokerage. The practical rule is simple: ask any intermediary in Japan whether, for your placement, it is acting as an agent of the insurer or as a registered broker for you, and ask an agent which insurers it represents.

Insurers also deal directly with large corporate clients, and foreign parents sometimes arrange the Japanese local policy through the Japanese affiliate or partner of the insurer that writes the master, which is the usual mechanism of a controlled master program.

The placement process in six steps

Step 1. Establish the Japanese risk profile. Entry structure, registered name and address, activities in Japan (sales only, manufacturing, services, import and distribution), locations and whether they are owned or leased, headcount by category including seconded staff, assets by location, revenue and its split by territory, supply and distribution chain, vehicles, and loss history. This is the information every later step draws on, and most of it should exist in the market-entry plan.

Step 2. Identify legal and contractual requirements. Labour-insurance and social-insurance enrolment, CALI, any sector licensing requirements; then every lease, customer, supplier, logistics, construction and loan agreement with an insurance clause, with the required lines, limits, certificate wording and deadlines extracted into one list.

Step 3. Review the global program. Obtain the master policies and any local-policy schedules; identify what the master purports to cover in Japan; apply the Article 186 analysis to each line; decide which lines will be local-only, which local with DIC/DIL, and which (international cargo, travel) remain on the group program under an exclusion.

Step 4. Define local coverage requirements. For each local line: policyholder and named insured (the Japanese entity, by registered name), additional insureds required by contracts, limits and deductibles with the retention funded in yen, policy period and its relation to the master's anniversary, claims-made or occurrence basis, and specific extensions such as earthquake, flood and exports.

Step 5. Underwriting and placement. Submit the information to the insurer through the agent or broker; expect questions on occupancy and construction for property, on products and sales territories for liability, on security controls for cyber, and on the parent's program for any DIC/DIL interface. The insurer quotes, conditions are negotiated, and the contract is concluded. The time needed varies by line, insurer and risk; a leased office with standard contents is quick, a manufacturing site with earthquake cover and business interruption is not, and there is no standard lead time we can honestly quote.

Step 6. Policy issuance and ongoing management. Policies and schedules are issued in Japanese; confirm what certificate language is available before promising one to a counterparty. Premium is usually paid annually or in instalments. Mid-term changes (new location, headcount, vehicle) are endorsed on request. Claims are notified by the policyholder through the agent, in Japanese, and the insurer handles investigation and, for liability, negotiation with the claimant where the policy so provides. Renewal is annual, and the reconciliation in Table 2 should be repeated at each renewal of either the master or the local policy.

Information typically needed for a quotation

The list below is indicative. Which items an insurer actually requires depends on the line and the risk; none should be treated as a universal filing requirement.

Corporate details of the Japanese entity or branch: registered name, address, registration extract, date of establishment, capital, directors.
Description of business and business plan for Japan.
Revenue, and its split by location and by territory of sale (for products liability, including exports).
Headcount by category, including staff seconded from the parent.
Schedule of buildings, equipment and stock by location with values, construction and occupancy.
Insurance clauses of the principal leases and customer, supplier and construction contracts.
Existing Japanese policies, if any, and the parent's program documents relevant to Japan.
Loss and claims history for the Japanese operation and, where relevant, the group.
Required cover, limits, deductibles and the desired inception date, aligned with the start of operations.

Insurance planning by entry structure and industry

By entry structure

Table 6: Entry structures in Japan and their insurance implications (general; confirm for your case)
Structure	Legal position	Who is the policyholder and insured	Typical insurance questions
Representative office	No registration required; may not engage in sales activities (JETRO). Not a separate legal person.	The foreign company itself, through its office in Japan.	Labour insurance applies to staff other than the representative; premises liability and contents cover are usually placed in Japan in the foreign company's name; Article 186 still applies to property in Japan.
Japan branch	Registered under the Companies Act (Articles 817 and 818) with at least one representative resident in Japan; treated as incorporated for social insurance.	The foreign company, acting through the branch; policies name the company and its Japan branch.	Same as a subsidiary for most lines; the parent's liability is direct, so limits should reflect that; D&O for branch representatives depends on the parent's policy.
Subsidiary (KK or GK)	Separate Japanese legal person.	The Japanese company, by its registered name.	The full local program; directors' duties under the Companies Act; parent named as additional insured where contracts require; master-program reconciliation.
Distributor or local partner	No Japanese entity of your own; contracts with a Japanese company.	The distributor for its own risks; you for yours.	Products liability for your products sold in Japan (often required by the distributor); who insures stock held by the distributor; indemnity and insurance clauses in the distribution agreement.
No Japanese presence (cross-border sales or services)	No entity, but Japanese customers, projects or staff on assignment.	The foreign company.	Not "no insurance": products or professional liability for Japanese claims, travel and accident cover for staff visiting Japan (overseas travel cover is excluded from Article 186 from the home-country side), and the question whether any property is located in Japan.

By industry

Technology and SaaS. The exposures are professional and IT liability for service failures, cyber for data held on Japanese customers, D&O for the local directors, and, for a sales-and-support office, premises liability and contents. The questions are claims-made continuity with the parent's E&O and cyber programs, whether business interruption under a Japanese cyber policy is available for the business type, and whether the Japanese entity is the contracting party on customer agreements.

Manufacturing and industrial. Property with earthquake and flood, business interruption with a realistic indemnity period, machinery, products liability covering sales in Japan and exports from Japan, contractors' cover for installation, marine cargo for inbound components and outbound products, employer's top-up for a workforce with physical exposure, and environmental liability where processes warrant it. The questions are the earthquake limit, the contingent interruption from suppliers, and the interface between the Japanese products policy and the group's global products program.

Wholesale, trading and retail. Products liability with certificates for customers, stock cover at warehouses including third-party warehouses, marine and domestic transit, premises liability for stores and showrooms, and cyber for customer data. The questions are who insures goods at each point in the chain, the lease requirements for retail premises, and recall exposure.

Professional services and consulting. Professional liability, cyber, D&O and premises liability. The questions are whether the Japanese entity signs engagement letters in its own name, the limits Japanese clients request, and the continuity of claims-made cover if the Japanese office was previously an unregistered representative office.

Construction and engineering, logistics. Added here because the contractual requirements are heaviest: project-specific contractors' all risks and liability with the limits the contract dictates, cargo and carriers' liability for logistics, and employer's top-up for site workers.

A procurement timeline from pre-entry to post-launch

The order below follows a typical market-entry project. Legal obligations attach by reference to facts (employing a worker, registering a vehicle, signing a lease), not to the project calendar, so treat the stages as a sequence of triggers rather than a schedule.

Pre-entry. Confirm the entry structure and business model. Obtain and review the parent's program for Japan, including the Article 186 analysis. List the Japanese legal and contractual requirements expected. Decide which lines will be local and who will arrange them.
Office or facility set-up. Extract the lease's insurance clause and arrange tenant's liability and contents cover to incept at hand-over. Decide on earthquake and flood for the premises. For owned or fitted-out facilities, arrange property and, if applicable, construction cover before works start.
Hiring employees. File labour-insurance and social-insurance enrolment from the first hire (the labour-insurance relationship arises on the day the business starts). Decide on an employer's top-up and on accident cover for seconded staff; check the parent's expatriate program against Japanese residence.
Before commercial operations. Arrange premises, products and professional liability, cyber and D&O as decided, with inception on or before the first sale or service. Register vehicles with CALI and arrange voluntary motor cover. Issue certificates required by customers. Confirm the claims-notification route in Japanese.
Post-launch. Report changes in revenue, headcount, locations and vehicles to the insurer as they occur; many Japanese policies are rated on declared figures. Report the Japanese program to the parent and update the reconciliation at each renewal. Keep the schedule of contractual requirements current as contracts are signed.

Two mistakes are common enough to name. One is to leave insurance until after incorporation on the theory that nothing can be insured before the company exists; a lease signed by the parent for the subsidiary's future office, staff hired before registration completes, and goods shipped ahead of launch all create exposure earlier. The other is to assume that the first renewal will take care of itself; the first Japanese renewal is where the declared figures are corrected, the master's anniversary is aligned, and the certificates promised during launch are reconciled with what was actually issued.

How Nayuta Insurance Technologies can support foreign companies in Japan

Everything above is general, and the decisions that matter are specific: whether your master program's wording and the parent's financial interest cover leave the Japanese entity with a real gap; what your Tokyo lease actually requires; how much earthquake cover a warehouse in a given prefecture needs; whether the Japanese directors are covered anywhere. Nayuta Insurance Technologies is a Tokyo-based insurance agency whose corporate practice, Risk & Benefits, works from a company's risk structure rather than from a product list.

For a foreign company entering or already operating in Japan, we start from whatever documents exist: the parent's program schedules, the Japanese policies if any, the leases and the principal contracts, and the entry plan. We build the inventory of Japanese exposures, run the reconciliation in Table 2 against the parent's program to show overlap and gaps line by line, and set out, with reasons, where cover should be added, where it is duplicated, and where the limits or deductibles do not fit the Japanese entity's balance sheet. Our policy review service (Japanese) is the formal version of that first step. From there we design the local coverage requirements in the terms an insurer needs, arrange the Japanese policies we are able to place, and manage the schedule through endorsements and renewals so that the Japanese program stays aligned with the parent's. Communication with head office in English is supported on an email basis, so the parent's risk, legal and finance teams can take part in the review directly.

For transparency: in non-life insurance, Nayuta Insurance Technologies acts as an agent for a specific insurer. We do not operate a model of comparing and recommending products across multiple non-life insurers, and we do not act as an insurance broker. Where your group's program requires a local policy from a particular insurer's Japanese affiliate, we can still help with the inventory, the reconciliation and the specification, and we will say plainly where the placement itself is outside what we can do. Our policy on comparative recommendation (Japanese) sets out our position in full. Companies typically come to us before the documents are complete and before head office has decided what the master covers; that is the normal starting point.

Contact

Discuss insurance requirements for your business in Japan

No obligation to take out a policy. Please use the enquiry form; we respond by e-mail.

Frequently asked questions

Is any commercial insurance legally compulsory for a company in Japan?

Not in general. What is compulsory are statutory schemes: workers' accident compensation and employment insurance for any business employing a worker, health insurance and employees' pension for incorporated entities and branches, and compulsory automobile liability insurance for every vehicle. Commercial property, liability, D&O and cyber insurance are voluntary in law, though leases, customer contracts and sector licensing rules may require them. Check the licensing statute for your activity.

Our global liability program names all subsidiaries worldwide. Can we rely on it for the Japanese subsidiary?

Not without analysis. Article 186 of the Insurance Business Act prohibits, in principle, a foreign insurer without a Japanese branch from insuring persons resident in Japan or property located in Japan, and the prospective policyholder must obtain permission before applying for such a contract. Being named on the master does not by itself answer whether the master may lawfully respond to a Japanese risk, whether a claim could be paid to the Japanese entity, or what a Japanese landlord or customer will accept. The usual structure is a locally admitted policy for Japan with the master checked for overlap and gaps.

Does difference-in-conditions cover or a financial interest clause solve the Article 186 problem?

No. A DIC/DIL clause supplements a local policy that must already exist. A financial interest clause insures the parent's interest in the subsidiary and pays the parent abroad; whether a specific wording respects the line Japanese law draws, and how the parent then funds the Japanese entity and treats that for tax, are questions to put to the insurer's legal team and a Japanese tax adviser. Neither device is a substitute for the Article 186 analysis.

Does fire insurance in Japan cover earthquake damage to our office or plant?

Not as standard. Commercial fire insurance in Japan excludes earthquake, volcanic eruption and tsunami; earthquake cover is added by endorsement with its own limit and deductible. The government-backed earthquake insurance scheme under the Earthquake Insurance Act applies only to residential buildings and household contents, so it is not available for an office-only building or a factory. Decide the earthquake limit explicitly when the property policy is placed.

Should we use an insurance broker or an agent in Japan?

Both are regulated, and they are different. An agent acts for the insurer, may be exclusive to one insurer or represent several, and must tell you which insurers it can handle; the insurer is liable for the agent's conduct in solicitation. A broker is registered separately, lodges a deposit, owes a statutory duty of good faith to you, and only mediates. Ask any intermediary which capacity applies to your placement and, if an agent, which insurers it represents. Nayuta Insurance Technologies is an agent and, for non-life insurance, represents one insurer.

Can we get an English-language certificate of insurance and name our parent or customer as an additional insured?

A certificate confirming the existence and content of a policy is issued by the insurer, usually through the agent. Whether an English version is available for a given commercial policy, and whether an additional-insured or non-exercise-of-recovery clause can be endorsed on a given line, are questions for the insurer and the wording; both exist under some Japanese liability wordings but are not universal standard forms. Confirm before signing a contract that promises them.

Primary sources

This article is a general explanation of business insurance in Japan for foreign companies. It does not describe or promote any particular insurer, product, policy or endorsement, and it is not legal, tax or regulatory advice. Statements that something is "generally" the case, "covered" or "excluded" describe common practice; whether a claim is paid is determined by the insurer under the specific policy wording, contract conditions and facts. For questions on the Insurance Business Act, labour insurance, social insurance or foreign law, consult the Financial Services Agency, the Ministry of Health, Labour and Welfare, the competent authority or a qualified adviser. In non-life insurance, Nayuta Insurance Technologies acts as an agent for a specific insurer; see our policy on comparative recommendation.