Business Insurance in Japan for US Companies: Key Differences and Requirements

Side-by-side comparison of US business insurance terms (workers' compensation, CGL, BOP, umbrella) and their Japanese counterparts for a US company opening an entity in Japan

A US risk manager setting up a Japanese entity usually arrives with a vocabulary that has served well across fifty states: workers' compensation bought from a carrier, CGL on an ISO form, a BOP for the small office, an umbrella over the primary tower, additional insured endorsements and certificates for every landlord and customer, a broker who works for you, and the knowledge that if the admitted market will not write something, the surplus lines market will. Three of those things do not exist in Japan at all, and the rest exist in a different shape. Workers' compensation is a public scheme, not a purchase. There is no ISO general liability form; liability is written by cause. There is no surplus lines market, and an unlicensed foreign insurer is restricted from insuring Japanese risks by statute. The intermediary who sells you the policy usually acts for the insurer, not for you. Earthquake is excluded from standard property cover and bought as an add-on. And the contract reflexes that a US counterparty treats as routine, additional insured status, waiver of subrogation, an English certificate, are available in Japan only in part and only on confirmation.

This article translates, term by term and habit by habit, and then says what actually changes in the procurement process when a US company opens in Japan. It assumes the reader has, or will read, the general guide to business insurance in Japan for foreign companies, and it links to two companion articles where a US group's questions go deeper: non-admitted insurance in Japan and global insurance programs and the Japanese local policy. Facts were checked on 28 October 2026 against the sources at the end.

This article is a general explanation. It does not describe any particular insurer, product, policy or endorsement, it is not legal or tax advice, and the Japanese "counterparts" described below are generic lines whose actual terms differ from insurer to insurer. Whether a given US form has an equivalent in Japan, and on what terms, is a question for the Japanese insurer's wording.

SummaryKey points

In Japan the person who sells you insurance is usually an agent acting for the insurer, exclusive to one insurer or representing several; brokers acting for the customer are a separate, smaller registered category. The insurer is liable for the agent's conduct in solicitation. Ask any intermediary which it is.
Workers' compensation is a public scheme in Japan: workers' accident compensation insurance applies by law to any business employing a worker, from the day the business starts, with the employer paying the premium. The employer's civil liability survives, so a voluntary top-up is the private purchase.
There is no ISO CGL form. Japanese liability is written by cause (premises, contractors', products) in Japanese wording; personal and advertising injury, contractual liability and additional insured treatment must be checked line by line.
Japan has no surplus lines market. Article 186 of the Insurance Business Act restricts insurance of Japanese property and residents by an unlicensed foreign insurer, with exclusions and a case-by-case permission; the route for a Japanese risk is a Japanese local policy, fronted if the group wants its US carrier behind it.
Standard commercial fire insurance excludes earthquake; earthquake is added with its own limit and deductible, and the government-backed scheme is residential only. Japan's Supreme Court has held that the punitive-damages portion of a foreign judgment is not enforceable in Japan, so the US punitive exposure is not the frame for a Japanese liability program, though substantial liability claims do occur.

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Who sells you insurance in Japan

Start with the point a US buyer finds most unfamiliar. 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 a policyholder in solicitation (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 Financial Services Agency (Article 286), required to lodge a deposit before mediating any contract (Article 291), owing a statutory duty of good faith to the customer (Article 299), and limited to mediation. The FSA's register listed 64 brokers as of 1 September 2026, among them the Japanese broking entities of the large international groups; some of those groups also operate agency entities in Japan, and some corporate placements go through the agency rather than the brokerage. Most corporate insurance in Japan is placed through agents. The US instinct that a "captive agent" is to be avoided does not transfer cleanly: the Japanese agent is the normal channel, the insurer stands behind the agent's conduct, and the question to ask is not "agent or broker" in the abstract but "in which capacity are you acting for my placement, and which insurers do you represent".

US terms and their closest Japanese arrangements

The table is a translation guide, not an equivalence table. Each row names the closest Japanese arrangement, says what is different, and gives the question to ask a Japanese insurer.

Table 1: US business insurance terms and their closest Japanese counterparts (general; terms differ by insurer and wording; as of 28 October 2026)
US term	Closest Japanese arrangement	What is different	What to ask in Japan
Workers' compensation	Workers' accident compensation insurance (rosai hoken), a public scheme administered through the Labour Standards Inspection Office, plus a voluntary employer's top-up (business accident / employer's liability insurance)	Statutory, not purchased from an insurer; applies to any business employing a worker; benefits set by law; employer's civil liability survives, so the private market sells the top-up rather than the base	Has labour-insurance enrolment been filed? What does the top-up pay beyond statutory benefits, and does it include the employer's civil liability?
Commercial General Liability (CGL)	Premises (facility owner's) liability, contractors' liability and products liability insurance, written separately or as a package	No ISO standard form; cover split by cause; Coverage B (personal and advertising injury) and medical payments are not standard components; occurrence basis is common but confirm	Which causes are covered, which premises and products are listed, is contractual liability beyond legal liability excluded, does the insurer negotiate with claimants?
Business Owners Policy (BOP)	Package policies for small and medium businesses combining fire (property), liability and business interruption	Packages exist but are the insurer's own, not an ISO form; components and sub-limits differ	What exactly is in the package, and what has been reduced to fit the price?
Commercial property	Commercial fire insurance with extensions (wind, hail, flood, theft, etc.)	Earthquake, eruption and tsunami excluded as standard; flood may be sub-limited or reducible; sums insured and settlement on Japanese terms	Is earthquake added, at what limit and deductible? Is flood included on what terms? What is the basis of settlement?
Products liability	Products liability (PL) insurance	Often written separately from premises liability; the importer is liable under Japan's Product Liability Act in the same way as the manufacturer; exports covered only if extended; Japanese customers ask for certificates	Are sales in Japan and exports from Japan both covered? Can the customer be an additional insured?
Professional liability / E&O	Professional liability and IT liability insurance by profession	Claims-made basis common; availability by profession; retroactive dates	Can the retroactive date be aligned with the US program? Which services are covered?
D&O	Directors' and officers' liability insurance for the Japanese company	Japanese company directors owe duties under the Companies Act; whether the US D&O program covers subsidiary directors depends on its wording	Are the Japanese directors covered anywhere, and does the Japanese policy or the master respond first?
Cyber liability	Cyber insurance	Japanese personal-information notification obligations fall on the Japanese entity; business interruption may be unavailable for some IT-service businesses; incident response runs in Japanese	Does the group cyber policy cover Japanese incidents and who runs the response in Japanese?
Commercial auto	Compulsory automobile liability insurance (CALI, statutory bodily injury only) plus voluntary automobile insurance	CALI is mandatory for every vehicle and covers only third-party bodily injury within statutory limits; voluntary cover adds unlimited bodily injury, property damage, own vehicle and passengers; fleet rating available	Are all vehicles on CALI? What limits on the voluntary policy? Fleet or individual rating?
Umbrella / excess liability	Excess layers over Japanese liability policies, where available	Not a standard separate market in the US sense; higher limits are commonly obtained on the primary policy or by excess cover from the same insurer	What is the maximum limit available on the primary, and is an excess layer available for the exposure?

Workers' compensation is a public scheme in Japan

In the United States, workers' compensation is mandatory for most employers in every state except Texas, according to the NAIC, and is purchased from private insurers, state funds or, in a few states, a monopolistic state fund. In Japan the function is performed by a public scheme. Article 3 of the Workers' Accident Compensation Insurance Act applies the scheme to businesses that employ workers; the Ministry of Health, Labour and Welfare states that it applies, as a rule, to every business employing even one worker regardless of size or industry; and the insurance relationship arises by law on the day the business starts (Act on Collection of Labour Insurance Premiums, Article 3). The employer files enrolment with the Labour Standards Inspection Office and pays the premium; there is no carrier to select and no policy to negotiate. The Japan External Trade Organization explains that the Japanese branch of a foreign company is treated as an incorporated business for social insurance and that labour insurance applies to the workers of a representative office other than the representative.

Two consequences follow. The "workers' comp" line in the Japanese budget is a statutory levy, not an insurance purchase, and cannot be moved onto the US program. And the statutory benefits do not extinguish the employer's civil liability to an injured employee, so Japanese employers commonly buy a voluntary top-up, written as business accident insurance or employer's liability insurance, that pays additional compensation and the employer's legal liability; that is the Japanese counterpart to the employer's liability part of a US workers' compensation policy, and it is a private purchase. Staff seconded from the United States who become resident in Japan are within the Japanese schemes and are persons resident in Japan for the purposes of Article 186 of the Insurance Business Act; the FSA's 2021 simplification of the permission procedure was designed for home-country group cover for such staff, and the group decides whether to use it or to cover them locally.

Your liability tower in Japan

The Insurance Information Institute describes CGL as a policy protecting the business from liability for bodily injury and property damage (Coverage A), personal and advertising injury (Coverage B) and medical payments (Coverage C), on ISO standard forms with carrier variations. Japan has no equivalent standard form. Liability for injury or damage arising from premises, from work performed and from products is commonly written as separate lines, by cause, or combined by the insurer in a package, in Japanese wording. Personal and advertising injury is not a standard component; contractual liability beyond legal liability is commonly excluded; defence costs and the insurer's conduct of negotiations with the claimant are matters of the wording. Occurrence-based cover is common for these lines, but the trigger should be confirmed, as should the territory, since exports from Japan and incidents abroad are commonly outside the Japanese policy unless extended. The umbrella market is not a separate standard market in the US sense; higher limits are usually obtained on the primary or as excess from the same insurer.

On the litigation environment, the frame is different rather than simply smaller. Japan's Supreme Court held in 1997 that the portion of a US judgment awarding punitive damages could not be enforced in Japan, and punitive damages are not a feature of Japanese liability law. That does not mean liability claims in Japan are small: product liability suits and substantial awards occur, and the Product Liability Act makes a manufacturer or importer liable for damage caused by a defect without proof of fault. It means that a Japanese liability program is sized to compensatory exposure and defence costs rather than to the US punitive and jury-verdict environment, and that the US master's higher limits sit above it through DIL rather than being replicated locally.

The practical rule is to stop asking "what is the Japanese CGL" and to ask instead what each Japanese liability policy covers, for which premises and products, on what trigger and territory, and whether the Japanese program as a whole reaches the exposures the US CGL would have reached. Where it does not, the gap is either closed locally or addressed on the US master through DIC.

What Japanese counterparties will actually ask for

US contract practice treats additional insured status, waiver of subrogation and a certificate of insurance as routine deliverables, and a US risk manager may expect the same demands from Japanese counterparties. The demands are usually simpler, and the deliverables less standardised.

Landlords. Japanese 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, and ask for the insurer's certificate at hand-over. US-style additional insured and waiver language is less common, but where a lease (particularly one drafted on a US template) contains it, confirm with the Japanese insurer before signing.
Customers and distributors. Large Japanese buyers ask suppliers for proof of products liability insurance, sometimes with the customer named as an additional insured. The Japanese entity that imports the group's products is the importer under the Product Liability Act and carries that liability.
Project counterparties and lenders. Contractors' cover at the limits the contract states; property insurance with the lender's interest noted.

In Japan, a certificate confirming the existence and content of a policy is issued by the insurer, usually through the agent; whether an English-language certificate is available for a given commercial policy is a question for the insurer. An additional insured clause exists under some Japanese liability wordings, for example as an endorsement for products liability that treats the additional insured and the named insured as third parties to each other, but it is not a standard form across all lines and its scope is not identical to an ISO additional insured endorsement. A non-exercise-of-recovery clause, the counterpart of a waiver of subrogation, also exists under some wordings. Where a counterparty, Japanese or American, writes US-style requirements into a Japanese contract, confirm with the Japanese insurer that the endorsement can be issued before signing. Our Japanese-language article on certificates and additional insureds for products liability covers the Japanese side.

Earthquake is an add-on, and the national scheme is residential

US property programs handle catastrophe perils by region and by carrier, with earthquake, named storm and flood commonly excluded, sub-limited or written separately. Japan's position is simpler and easier to get wrong. Standard Japanese commercial fire insurance excludes loss caused by earthquake, volcanic eruption and tsunami; earthquake cover is added by endorsement, commonly with its own limit (often a fraction of the sum insured) and deductible, on terms that are a matter of negotiation and capacity. The government-backed earthquake insurance scheme established by the Earthquake Insurance Act covers only residential buildings and household contents (Article 2(2)); the Ministry of Finance states that office-only buildings and factories are outside it. A US parent reading that Japan has a national earthquake insurance scheme and assuming the subsidiary's warehouse is covered has made an error only the policy schedule can correct. Typhoon wind is generally within the fire policy's perils; flood may be sub-limited or reducible, and basement and ground-floor stock is the usual loss. Business interruption follows the property perils, so earthquake interruption is excluded unless earthquake is added on both. Our Japanese-language article on earthquake cover for businesses goes into the mechanics.

No surplus lines: Article 186 and your options

In the United States a non-admitted insurer may write risks the admitted market declines, through a licensed surplus lines broker, under state law and the Nonadmitted and Reinsurance Reform Act; the NAIC puts surplus lines premium at about 12% of the property and casualty market in 2024. Japan has no such mechanism, and its regulator is national: one statute, the Insurance Business Act, one licence list (57 non-life insurers as of 19 October 2026, including 21 foreign insurers operating through Japanese branches and the Society of Lloyd's), and one rule for insurers not on it. Article 186(1) prohibits, in principle, a foreign insurer with no branch in Japan from concluding contracts relating to persons resident in Japan, property located in Japan or Japanese-flag ships and aircraft; reinsurance, international transit cargo, overseas travel and certain marine and aviation risks are excluded by Cabinet Order and Ordinance; and the prospective policyholder may apply for permission before concluding a contract inside the rule, which must be refused where a Japanese-licensed insurer could easily provide an equivalent contract. Applying without permission exposes the applicant in Japan to a non-criminal fine of up to 500,000 yen (Article 337). The detail is in our article on non-admitted insurance in Japan. The consequence for a US group is that the surplus lines reflex has no Japanese outlet: the route for a Japanese property or liability exposure is a Japanese local policy, fronted if the group wants its own carrier behind it, with the US master above it.

Keeping the US master and the Japanese local policy aligned

The US master continues to do three things for Japan. It sets the standard the Japanese local policy is written to meet; it responds through DIC/DIL to the difference between the Japanese policy and that standard, provided the local policy is in force; and it may insure the parent's own interest in the Japanese entity through a financial interest clause, which pays the parent abroad and gives the Japanese entity no policy, certificate or claim in Japan. If the group wants its US carrier to bear the Japanese risk, the structure is a fronted local policy issued by a Japanese-licensed insurer and reinsured to the US carrier, lawful in structure because reinsurance is excluded from Article 186; the fronting insurer underwrites the Japanese risk and becomes the insurer of record. None of these devices resolves Article 186 for Japanese property or persons on its own, and all of them raise the same four questions: who is insured on each layer, who is paid, where and in what currency. Our article on global programs in Japan works through them with a hypothetical of a US parent opening a Tokyo office and a warehouse.

Two alignment points are specific to US programs. Claims-made lines (D&O, E&O, cyber) need retroactive dates on the Japanese policy aligned with the period the Japanese entity was covered, if at all, under the US program, and run-off considered if the Japanese entity moves from the master to a local policy. And the US program's anniversary will rarely match the Japanese policy's annual period; align them or document the gap, and repeat the DIC comparison against the then-current Japanese wording at each renewal of either.

What a Japanese insurer will ask for

The list is indicative; what is actually required depends on the line and the risk.

Registration extract and corporate details of the Japanese entity or branch (registered name, address, capital, directors, date of establishment).
Description of the Japanese business and plan; revenue and its split by location and by territory of sale.
Headcount by category, including staff seconded from the United States.
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, including any US-style requirements.
The US program documents relevant to Japan (master schedule, DIC/DIL and financial interest wording), and any existing Japanese policies.
Loss history for the Japanese operation and, where relevant, the group.
Required cover, limits in yen, deductibles and the inception date aligned with the start of operations.

Six changes to your procurement process

Ask the intermediary which capacity it acts in. Japanese agents act for the insurer and may be exclusive or multi-insurer; brokers are a separate registered category. Know which you have, and which insurers an agent represents.
Treat workers' compensation as a statutory filing, not a placement. File labour-insurance enrolment from the first hire; then decide on a voluntary employer's top-up.
Translate the liability tower line by line. Replace "CGL" with a list of Japanese liability policies by cause, trigger and territory, and compare the result with what the US CGL would have covered. Size to compensatory exposure; put the higher limits on the master through DIL.
Check every contractual requirement against the Japanese wording. Additional insured, waiver of subrogation and certificate language promised to a landlord or customer must be confirmed with the Japanese insurer before the contract is signed.
Decide earthquake explicitly. Choose the earthquake limit and deductible on the Japanese property policy, and confirm how the US master treats a Japanese earthquake loss above it.
Drop the surplus lines step. There is no Japanese non-admitted market. For property, liability and vehicles in Japan the route is a Japanese local policy, fronted if the group wants its own carrier behind it.

How Nayuta Insurance Technologies can help

Nayuta Insurance Technologies is a Tokyo-based insurance agency whose corporate practice, Risk & Benefits, works with foreign-owned companies on the Japanese side of their insurance. For a US group, that means taking the US program documents, the Japanese entity's leases and contracts and the entry plan, listing the exposures in Japan, translating the US requirements into a specification a Japanese insurer can quote against (including the earthquake limit, the liability lines by cause, and the endorsements Japanese counterparties will accept), arranging the Japanese policies we are able to place, and keeping the Japanese schedule reconciled with the US master at each renewal. Our policy review service (Japanese) is the formal version of the first step. Communication with head office in English is supported on an email basis.

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 insurers, we do not act as an insurance broker, and we do not arrange US master policies, fronting agreements or financial interest cover. Where a program requires the Japanese local policy to come from a particular carrier's Japanese affiliate, we can still do the inventory, the specification and the reconciliation, 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.

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Frequently asked questions

Do we need a broker in Japan, or is an agent acceptable?

Both are regulated and either can work. Most corporate insurance in Japan is placed through agents, who act for the insurer, may be exclusive to one insurer or represent several, and must tell you which insurers they can handle; the insurer is liable for the agent's conduct in solicitation. Brokers are registered separately and owe a statutory duty of good faith to you. Ask any intermediary which capacity applies to your placement and, if an agent, which insurers it represents.

Does our US workers' compensation policy cover employees of our Japanese subsidiary?

Japanese workers' accident compensation is a public scheme that applies by law to any business employing a worker in Japan, from the day the business starts, and is administered through the Labour Standards Inspection Office; it cannot be replaced by a US policy. The employer's civil liability survives the statutory benefits, so Japanese employers commonly buy a voluntary top-up locally. Staff seconded from the United States who become resident in Japan are persons in Japan for the purposes of Article 186 of the Insurance Business Act.

Is there a Japanese equivalent of CGL on an ISO form?

No. Japanese liability cover is written by cause (premises, contractors', products) or in the insurer's own package, in Japanese wording. Personal and advertising injury and medical payments are not standard components, and contractual liability beyond legal liability is commonly excluded. Compare what the Japanese policies cover with what the US CGL would have covered, and close gaps locally or through the US master's DIC.

Can our Japanese landlord be named as an additional insured with a waiver of subrogation?

Additional insured and non-exercise-of-recovery clauses exist under some Japanese wordings but are not universal standard forms, and their scope differs from ISO endorsements. Confirm with the Japanese insurer, line by line, before signing a lease that promises them, and confirm whether an English-language certificate is available.

Can we use a surplus lines carrier for a Japanese risk the admitted market will not write?

Japan has no surplus lines mechanism. Article 186 restricts, in principle, insurance of Japanese property or persons by a foreign insurer without a branch in Japan; a case-by-case permission exists but must be refused where a Japanese-licensed insurer could easily provide an equivalent contract. The practical routes are a Japanese local policy, or a fronted local policy reinsured to the US carrier.

Does Japanese fire insurance cover earthquake damage to our office and warehouse?

Not as standard. Earthquake, eruption and tsunami are excluded from standard commercial fire insurance and added by endorsement with their own limit and deductible. The government-backed earthquake scheme covers only residential buildings and household contents. Decide the earthquake limit explicitly when the property policy is placed, and confirm how the US master treats a Japanese earthquake loss above it.

Primary sources

This article is a general explanation of business insurance in Japan for US companies. It is not legal, tax or regulatory advice, and it does not describe or promote any particular insurer, product, policy or endorsement; the Japanese counterparts described are generic lines whose terms differ by insurer. Whether a claim is paid is determined by the insurer under the specific policy wording and facts. In non-life insurance, Nayuta Insurance Technologies acts as an agent for a specific insurer; see our policy on comparative recommendation.