If your insureds operate internationally — even if it’s just for an occasional meeting abroad — they are exposing themselves to unforeseen risks that are not covered by their domestic policies.
However, when looking over international coverage plans, it is easy to understand why one might view these policies as superfluous. For example, coverage relating to political unrest, terrorism, or kidnapping may seem unnecessary if one’s only business travel involves occasional trips to Canada or annual journeys to western Europe.
But these policies are far more important than they might seem. Events like the aforementioned tragedies do occur, and, more importantly, a comprehensive plan for international coverage provides protection in more cases than just these extreme circumstances. A comprehensive policy might include protections against injury to workers while traveling, automobile accident coverage (regardless of whether the insured is the cause or victim of the accident), and more. In this piece, we’ll detail international coverage and what you can expect from policies in this area.
Before we go into detail about foreign liability coverage, we will first make clear which companies should be considering foreign liability coverage. Without question, your insured’s should have foreign liability coverage if their work involves:
- International travel
- Distribution or manufacturing operations
- Trade shows, demonstrations, or meetings that take place internationally
- Vehicle use abroad
- Travel to areas that are a high risk for kidnapping, extortion, or may require emergency evacuation requests.
While the latter situations may seem rare, instances like these are far more common than one might think. Corruption and political unrest are ubiquitous around the world, and, depending on where your insured’s operate, it is more than likely that their international business dealings may interact with these circumstances in one form or another.
Additionally, foreign laws and customs along with local regulations can lead to misunderstandings that result in litigation, asset seizure, and, in the worst cases, personal harm. Foreign liability insurance will protect your insureds in these instances, as it is more than likely their domestic commercial policy does not cover monetary damages or legal expenses resulting from rulings abroad. This means they also will not pay out in cases of medical emergencies, and they will not cover funeral costs stemming from accidental death or injury in an international incident.
Foreign liability insurance protects businesses and the employees therein when work involves traveling to or operating in another country. This might include a construction project, manufacturing facility, branch office, or other business-related operation outside of the United States.
The above can be broken down into several areas. First, any business with even minor operations outside the United States, Canada, and Puerto Rico requires coverage from a foreign commercial general liability policy. Coverage of this nature tends to include protections against claims from a third party of property damage or bodily injury caused by your company, managers, or employees. This may also extend to lawsuits stemming from the aforementioned incidents.
Next, international property insurance covers your insured’s property. This includes both property held outside the United States, such as manufacturing facilities or operations located abroad, and property carried during normal business travel, e.g. laptops, phones, product samples and more. If loss or damage to this property occurs during travel, coverage of this nature may even protect from loss of income owing to this damage or loss. Furthermore, coverage of this nature may extend to cyberspace, where coverage will protect you from loss of electronic data.
Your insured’s workers’ compensation policy most likely does not protect against employee injury or illness sustained while abroad. If operations involve foreign travel, it is imperative that your insured purchase foreign voluntary workers’ compensation coverage. In addition to protecting current employees abroad, a foreign voluntary workers’ compensation policy can protect locally hired employees in countries where workers’ compensation programs may be sub-par.
A global marketplace requires solutions that reach around the world. At Conway, we have access to, and relationships with, a global network of insurers and brokers. While other firms may simply connect you with an insurer or broker, we provide a personalized approach, working with you to ensure that you find the right solution for your international insurer needs. If you are interested in getting serious about global coverage, please contact Carrie Chappie.