Sue me. Sue me. Go on and sue me.

When Nathan Detroit's relationship with Miss Adelaide's starts to fall apart in the Broadway chestnut, Guys&Dolls, they resort to threats of lawsuits. That doesn't seem so remarkable to American audiences. But try to explain to Europeans how a litigious society like ours works and they're left mystified.

I recently had occasion to speak with the CEO of a startup company in Germany that is planning to open an American HQ. As I learned more about his plans, it was patently clear to me as a born-and-bred American that his first purchase needed to be a Directors and Officers insurance policy. He couldn't get his mind around the concept and asked me, "Who would sue whom for what reason?" The answer, of course, was "anyone, anyone else, anything." So I did my best to explain it to him in an E-mail. Here's how I explained it:

When Nathan Detroit's relationship with Miss Adelaide's starts to fall apart in the Broadway chestnut, Guys&Dolls, they resort to threats of lawsuits. That doesn't seem so remarkable to American audiences. But try to explain to Europeans how a litigious society like ours works and they're left mystified. I recently had occasion to speak with the CEO of a startup company in Germany that is planning to open an American HQ. As I learned more about his plans, it was patently clear to me as a born-and-bred American that his first purchase needed to be a Directors and Officers insurance policy. He couldn't get his mind around the concept and asked me, "Who would sue whom for what reason?" The answer, of course, was "anyone, anyone else, anything." So I did my best to explain it to him in an E-mail. Here's how I explained it:

"The problem with the American litigation society is that there is neither rhyme nor reason for many lawsuits — except that people feel entitled to be compensated for every single bump in the road of life. [My CEO friend had heard of the case in which a McDonald's customer sued the restaurant because she spilled coffee on herself that was — heaven forfend — hot!] As a result, our society changes to reflect that. For example, the safety warnings and precautions that are required everywhere are ridiculous: yesterday at the gym, I saw a warning label on a small bucket of sanitary wipes that read, "Warning! Children may fall into this bucket and drown even in a small amount of liquid. Keep away from children! Injury or death may occur." On a bucket!

Another: property owners are required to give advance warning even to trespassers of any potential hazards on their properties. But how you give that warning could come back and bite you in a lawsuit. So if you have a dog that might jump on or bite people and you put up a sign that says, "Beware of Dog," that sign will be used as evidence in court that you've admitted to having a vicious animal! So as a consequence, you must put up a sign that says simply "Dog in Yard."

By the same token, over-zealous safety precautions are everywhere such as railings, guard rails, anti-slip materials and so forth. By comparison, I remember being on the glacier outside the observatory at the top of the Jungfrau in Germany [a 14,000-foot mountain in the Swiss Alps.] The only barrier to falling off into the void was a single rope strung between ski poles stuck in the ice with a sign that essentially said, "Don't go past this rope." In Europe, people expect to take responsibility for their own behavior. A person stupid enough to go beyond the rope and get injured would not get any sympathy in court. Not so here.

So how could you be sued? Someone else had your idea first. Your office address is in the U.S. but you're really in Germany. Your business plan will be seen as "restraint of trade" or "unfair competition." Or someone believes that have a legal right to [your intellectual property.] And on. And on. That's why having adequate D&O (Directors and Officers) insurance is so important in an American enterprise."

Sadly, I think the guy has a great idea, that his business plan is solid that he could have a great success here. I wish him the best. But I hope he finds an excellent insurance agent first.