When crossing borders

It may come as a surprise but just
because a company doesn’t have foreign
operations doesn’t mean that insurance against international exposures is unnecessary.

“As companies become more and more
global,” says Lisa Lancaster, an account
executive at DLD Insurance Brokers Inc.,
“there are numerous exposures that they
may have abroad.”

Lancaster suggests creating a flow chart
of your product or operations that defines
all the ways that you may be interacting or
traveling to other countries to conduct
your business.

Smart Business talked to Lancaster
about what specific international insurance coverages may be in order.

What kinds of corporate coverage are frequently overlooked?

Your insurance broker should work with
you to determine how your business operates and where you might have international exposures. You are exposed if executives or other employees travel abroad, if
any vendors may have or provide a portion
of your product, and if you sell product
outside of the United States.

If employees travel to other countries, what
are possible coverages to consider?

International automobile coverage, foreign voluntary workers’ compensation
coverage, foreign property coverage, kidnap-and-ransom coverage and foreign general liability coverage are some products
you may want to consider.

International automobile coverage provides automobile liability insurance to
areas outside of the United States. However, it is intended to be excess over any
compulsory insurance in the coverage of
the area you are traveling to.

With a domestic workers’ compensation policy, why can’t employees just report injuries
when they return to the U.S.?

Several key benefits are provided by a
foreign voluntary workers’ compensation policy that are not present on your domestic workers’ compensation policy.

No one plans on getting so injured that
they may not be able to return on their own
to the United States — but it can happen.
In the event that an employee must be
transported back here, foreign voluntary
workers’ compensation provides a repatriation limit that will pay for the expenses.
You should negotiate the highest benefit
available; $500,000 is not uncommon.

Most carriers generally offer the services
of a 24-hour provider that can assist the
traveler with such things as locating a local
English-speaking clinic or doctor, and finding a provider that can arrange transport
back to the United States. Also 24-hour coverage may be available with additional accidental death and dismemberment benefits.

Why consider separate coverage if a foreign-based vendor has coverage that protects your
company’s property?

Because of the cost to do business
domestically, many companies are subcontracting some or all of the manufacturing
processes abroad. The problem with relying on your subcontractors’ insurance is
that your provider may also be providing
coverage to several other customers and the limit on your certificate of insurance is
likely not dedicated to only your product
while there. In addition, you probably
aren’t familiar with the terms and conditions of coverage in that country.

Numerous products on the market will
not only address coverage for your product
while at your foreign subcontractor’s location, but also while in transit to and from
the location.

Is kidnap-and-ransom coverage really necessary?

Doing business in other countries heightens the need for coverages that may not
seem necessary here. Dangerous situations
abound in some other countries, where
U.S. businesspeople also may be targets for
kidnap. Coverage can be broadened to
include family members since they
account for about 27 percent of kidnappings that occur in other countries.

Coverage provides for expenses that are
associated with resolving a kidnapping,
extortion or other event where a ransom
demand is made.

Is limited worldwide coverage on general
liability policies sufficient?

Generally the term ‘limited worldwide
coverage’ means that you will have coverage for your products sold most places in
the world (check any territory exclusions),
but the suits have to be brought in the U.S.

Can excess or umbrella policies sit above
any of the foreign liability coverages?

With respect to liability coverages discussed, they generally can be scheduled on
your excess or umbrella policy. Make sure
that those policies honor the expanded territorial boundaries provided by primary coverages. You will need to make sure that the
limits purchased are adequate for scheduling and that your broker schedules them
properly on the underlying policy listing.

LISA LANCASTER is an account executive at DLD Insurance
Brokers Inc. Reach her at [email protected] or (949) 553-5670.