Most organizations work diligently with their insurance brokers to create comprehensive insurance and risk management strategies, yet many inadvertently overlook the risks created by activities involving foreign countries, especially those deemed “incidental.” Whether your organization sends employees abroad on business, or is planning long-term overseas activities, you need to consider the special issues created by foreign risk. 

Most commercial general liability, workers compensation, automobile and property insurance policies do not provide coverage outside the United States and Canada. If your organization is involved in any of the following activities and you do not have international insurance coverage, you are most likely assuming more risk than you intend: 

• Employees traveling and/or working overseas

• Exhibition in foreign trade shows 

• Exporting merchandise 

• Relying on sales to overseas customers

• Importing goods from an overseas supplier or manufacturer 

• Manufacturing abroad 

• Owning or renting foreign locations 

• Owning or renting automobiles overseas

• Warehousing inventory, equipment, supplies or raw stock overseas 

International Insurance Policies 

Some international coverages can be obtained by requesting an endorsement to an existing policy while others are available only as part of an international “package” policy. While there are numerous coverage options, most international “package” policies can be tailored to meet your specific needs by selecting as few as two of the following coverages. 

Premises & Product Liability 

This coverage follows the same concept as Premises and Products liability policies in the U.S. expect for one major difference: it responds to lawsuits originating outside the United States and Canada. If you rent or own offices or manufacturing plants outside the U.S., or if you export products abroad, this coverage provides for defense, settlement and investigation into suits involving bodily injury, property damage, personal injury and advertising injury. 

Automobile Liability 

Relying on automobile insurance purchased from rental car companies or foreign insurance agents may leave your company exposed to heightened financial loss as host country insurance policies frequently have very limited coverages and low limits. Purchasing auto liability policies in the U.S. for international exposures normally provides broader coverage, higher limits and policy terms are stated in familiar language and terms. 

Property including Transit 

Many organizations sending expensive assets such as tradeshow exhibits, product samples, or tools and machinery overseas on a temporary basis frequently overlook the need for insurance until a loss occurs at which time they are usually informed their existing property insurance does not cover assets outside the U.S. 

Kidnap and Ransom 

Kidnapping of businessmen, teachers and not-for-profit staffers while traveling or working abroad has become commonplace in many parts of the world. This coverage provides for expenses incurring in negotiating the release of hostages or in making payments demanded in other types of extortion cases. Some insurance companies provide consulting services from international security forces trained in counter-terrorism and negotiation. 

Foreign Voluntary Workers Compensation 

If your organization has employees traveling overseas on an incidental basis, your broker can request a foreign voluntary workers’ compensation endorsement be added to your existing workers compensation policy. This endorsement will pay benefits in accordance with the state workers compensation laws in which the injured employee was hired. However, if your employees are working overseas longer than six months, consider obtaining a separate foreign voluntary workers’ compensation policy. 

Whether by endorsement or separate policy, voluntary workers compensation provides valuable extra benefits to you and your employees, including: 

• Repatriation Expense: Pays the cost of bringing an ill or injured worker back to the U.S. for treatment, plus funeral expenses and transport to the U.S. if a worker dies while overseas. 

• 24-Hour Coverage: Many voluntary policies insure employees on a 24-hour basis while overseas on a short-term basis. This coverage feature can provide superior medical coverage for employees abroad because workers’ compensation has no employee deductibles, co-payments or monetary limits. 

(ACH) Accident, Sickness and Heath Coverage 

Standard Medical (Health) Insurance does not provide coverage if an employee were to become sick or injured, while overseas.  Coverage can be purchased, standalone, or through a foreign package policy.  Coverage is usually written on a 24 hour basis, and in some cases can extend to family members traveling with the employee.  It can also provide repatriation expenses that may not be covered elsewhere.  The risk of contracting certain illness or disease is compounded outside the U.S.  

In conclusion, go global but be prepared. International activities present unique challenges and require different risk transfer strategies. Fortunately, insuring these risks can be very affordable when treated as a wrap-around to your current risk management program. By identifying international risk exposures before you leave the U.S., you’ll be better positioned for success overseas. 

Jenny O’Sako is a partner with Sterling Seacrest Partners. She can be reached at 912.544.1934 or [email protected].