In today’s increasingly globalized economy, businesses of all sizes often find themselves working beyond the borders of the United States. This can leave a company vulnerable if their insurance coverage is not as expansive as their business dealings. In these situations, international insurance may be a smart choice for your business.
For both small and large companies operating in the United States, a certain level of insurance coverage is likely already in place. This may include everything from professional liability insurance to general liability insurance and workers’ compensation coverage. But what many businesses may not realize is that if they start doing business internationally, these policies often will not cover incidents that occur abroad. Any company that works overseas could benefit from international insurance.
Different types of international insurance are designed to cover particular risks. Learning more about what each type of international insurance covers is the key to finding optimal coverage for your business. This article outlines what international insurance is, the different types available, and how your business can benefit from this type of insurance.
What Is International Insurance Coverage?
International insurance is a type of insurance designed to cover risks associated with doing business outside of the United States. In many respects, it is similar to standard business insurance; the primary distinction is that it will cover losses that occur abroad. It may include a broad array of different types of policies, including property insurance, general liability coverage, automobile insurance, professional liability insurance, workers’ compensation, kidnapping and ransom insurance, medical risk insurance, and marine insurance. The particular types of policies that your business may need will depend on the work that you do and the risks that your company and employees encounter while working outside of the U.S.
International insurance gives companies that operate internationally peace of mind, knowing that their business and their employees will be fully covered in the event that something happens overseas. If a business does any work outside of the United States, international insurance is a necessary part of a comprehensive insurance coverage package.
Types of International Insurance
International insurance is not one specific policy; instead, it is an array of policies that businesses can choose to best cover the risks that their company faces in its work abroad. Working with a benefits broker can help a business determine exactly what type of coverage fits their needs. The company can then choose the policies that best address these potential losses.
Many types of international insurance are similar to those that your company may already have domestically. For example, an international general liability policy will protect a business from lawsuits in foreign countries based on accidents, injuries, or negligence. It offers coverage for a broad range of claims, such as property damage and bodily injury, which may result from normal business operations.
International product liability insurance covers losses due to products that cause bodily injury or property damage. Companies that manufacture, sell, distribute, or repair products outside of the United States will often benefit from international product liability policies. Just like the domestic version, the international product liability insurance policy will cover injuries or damage that occur as a result of a defective product.
An international professional liability insurance policy will provide protection for any business that provides services abroad. Also known as malpractice or errors and omissions insurance, this policy will generally cover the cost of defending a lawsuit and any settlement or award.
Other types of insurance that mirror domestic coverage may include auto insurance, workers’ compensation insurance, and accidental death and dismemberment insurance.
Kidnap and Ransom Insurance
There are, however, international insurance policies that are unique to the global context. Kidnap and ransom insurance is typically purchased by companies operating in locales where the risk of kidnapping and extortion is high, such as Mexico, Venezuela, Nigeria, some parts of Russia, Afghanistan, and Iraq. These policies will cover the losses associated with a kidnapping, such as reimbursing a company for random paid or paying the expenses of a crisis management consultant.
This type of insurance will also typically pay for other costs, such as medical treatment for injuries, legal liability related to the kidnapping, and relocation and job retraining expenses. Kidnap and ransom insurance is particularly important for businesses working in high-risk areas, including large corporations, non-governmental organizations, and high-profile or wealthy families.
Ocean Cargo Insurance
For businesses that utilize ships to send goods overseas, ocean cargo or marine insurance will protect losses related to this transport. It typically covers losses to the merchandise or goods, the crew, employees, and others, both while on a ship and while being transported to the ship over land or via plane. Many policies also provide coverage for any damage to the vessel itself, along with legal liability associated with the shipment.
Ocean cargo insurance is particularly important for exporters who are not paid for the merchandise at the time of shipment or importers who have paid for all or part of the shipment before receiving it. If something happens to the goods in transit, an ocean cargo insurance policy will cover the financial loss, above and beyond what the carrier might cover in the event of an accident.
Foreign Voluntary Insurance
Foreign voluntary insurance is a type of workers’ compensation that provides more comprehensive coverage to employees who are injured or get sick while abroad. In most cases, domestic workers’ compensation coverage will protect employees if they suffer a work-related injury or illness while traveling overseas. However, this level of coverage may not be sufficient to cover the full scope of losses, including the cost of transporting the employee to the United States or another country for medical treatment. It will usually include coverage for diseases that are endemic to a particular country (which are often excluded from regular workers’ compensation coverage) and help employees find appropriate medical care while outside of the United States.
A foreign voluntary insurance policy typically covers all work-related accidents and illnesses, including injuries related to a car accident, illnesses such as malaria, or even injuries from acts of war or terrorism. It is an important type of coverage not only for American employees who travel abroad for business but for companies that have full-time American, third-party national and local national employees at a job site in a foreign country.
Global Executive Support Services
Global executive support services is a type of insurance coverage that helps employees throughout all phases of foreign travel. It may include emergency lawyer referrals, pre-trip medical information and coverage, medical evacuations, and assistance with lost documentation. This type of insurance coverage is especially useful for those businesses that wish to take a proactive approach to safety in overseas travel, as it assists employees in preparing for travel and with any issues that may arise during travel abroad.
Who Can Benefit From International Insurance Coverage?
Any company that is currently doing business abroad or wishes to expand overseas would likely benefit from international insurance. Most traditional domestic business insurance policies do not provide coverage for events that occur internationally, leaving companies that have global business interests at risk for severe financial loss without international coverage.
Companies that engage in any number of international transactions or business dealings may find that international insurance is a valuable addition to their overall insurance coverage. A business can choose which particular types of policies best suit its needs, selecting only the policies that address a business’s risks is critical to having the best possible coverage. If a company sends employees to foreign locations to conduct business or has employees stationed overseas, foreign voluntary workers’ compensation and business travel insurance may be necessary. For companies that export or import materials abroad or sell to customers outside of the United States, ocean cargo or transit policies may be helpful. If a company advertises their products in another country via the internet or another medium, an international commercial general liability insurance will protect against lawsuits related to that advertising. Any business or organization, including educational institutions, that participates in international conferences, trade shows, or exhibits could benefit from international insurance coverage as well.
Ultimately, any business that works internationally in any capacity could benefit from international insurance. These policies are specifically geared toward losses that occur in foreign countries, protecting your company from potentially catastrophic losses that would not be covered by your domestic commercial insurance policies.
Finding The Best International Insurance Coverage for Your Business
When it comes to purchasing international insurance, a business insurance professional can help you select the policies that best fit your business’s budget and needs. A broker can evaluate your business activities and the location of your foreign dealings to determine what type of policies are necessary. He or she can then give you a range of options from different insurers for the specific work you do in a particular location. A business insurance professional can then advise you on the best policies for your company based this assessment. Contact the Business Benefits Group today to learn more about options for international insurance to protect your business from loss while operating overseas.