AIG, U.S. Chamber, SBA Launch Site To Help Small Businesses Assess Risk

He said that recent statistics from the government show that "there might be one-to-1.2 million small business and middle-market companies that are actively involved in business overseas."

"This is a tremendous market opportunity," he said. He added that the market is "incredibly under penetrated" because small and middle-market companies dont recognize the exposure.

Those businesses can include consultants, service providers, manufacturers, wholesalers, importers and exporters, he said. They also can run the gamut from consultants doing business or working with partners overseas, to small companies attending trade shows and shipping samples overseas.

"If theyre shipping products or providing services, they have exposures," he said. In many countries "if there is a problem, they dont often come back to the United States and sue. They sue in that country." A judgment in Germany can be enforced in the United States, but "a domestic policy will probably not cover that."

He said another issue for smaller companies is that their senior people are often traveling and "have exposures across the board." An example, he said, is an executive who rents a car and has an accident. "Right away they realize hes an American and they sue him for $1 million and hes got $5,000 worth of coverage," he noted.

While tort awards may be smaller in Europe than in the United States, "the world is becoming a smaller place. If a small business suffered an uninsured loss of $1 million or $2 million, where would that put them? A lot of them would be out of business," he said.

He added that many brokers, as well, arent aware of all the exposures. "Were trying to educate across the board here."

Mr. Skapof emphasized that since the project is done in conjunction with the government, "its not an ad for AIG. We want to raise the bar so that when people are doing business, theyre doing it on an educated basis."

The Chamber and SBA offer a platform for the partnership to provide a public service, he said.

The U.S. government itself is a large market for smaller businesses, he said. The government is spending billions of dollars to rebuild Iraq and has mandated that a percent of the contracts go to small and middle-market businesses. He said the SBA is working with smaller businesses to prepare them to be able to exporta good way to balance out our payment deficit."

He said the Web site highlights risk management issues that business owners may not anticipate. "They typically dont recognize they have an additional exposure. They think its covered under their domestic policy," he said. In some cases there may be some coverage, but "there are big gaps."

The three organizations are offering a resource to help businesses recognize that "when youre planning to go overseas, one of the big issues you need to consider is a risk management plan" to pinpoint exposures and vulnerability, he explained. "You certainly wouldnt run a business in the United States without insurance."

Suzanne Clark, Chamber executive vice president and chief operating officer, said in a statement that the interactive site, which pools government, nonprofit and private-sector knowledge and resources, does not offer insurance products for sale.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.