Many businessowners assume the "safety net" provided by their domestic commercial insurance coverage will follow their products and employees when they leave the United States, and provide adequate protection in foreign markets–a common and very costly mistake.
The safety net provided by domestic business coverage is stretched extremely thin beyond U.S. boundaries. What's more, it's not a question of whether the safety net will tear, but when, and how severe the losses will be when it does.
Liability gaps expose U.S.-based businesses to potentially devastating losses overseas. The rise in global trade has led to unprecedented growth in legal suits brought in the United States from outside groups in all areas of the world. As the "global village" expands, so does awareness of settlements awarded when U.S.-based companies are targeted for legal action.
To effectively curb their international exposures, risk managers must operate on the assumption that today's global village includes its share of litigants. Yet in many cases involving foreign jurisdiction for product liability, companies mistakenly believed they had sufficient domestic insurance to address global exposures.
Kidnappings and extortion attempts, for example, are on the rise worldwide, with over 1,000 executives kidnapped each year while traveling outside the U.S. on business.
Somewhat less dramatic, but no less costly scenarios occur daily, as employees:
o Suffer injuries (or injure others) while driving rental cars.
o Unwittingly damage hotel rooms, lose laptops or other equipment.
o Fall victim to theft or assault.
o Lose their passports and become temporarily stranded.
o Fall seriously ill to commonplace (or localized endemic) diseases, or even die while working on foreign soil.
Covered or not, the U.S.-based companies they work for might be liable for costs including property damage, medical evacuation and care, and repatriation. Even trivial incidents can snowball when employees are far from home, when the language and customs are unfamiliar, and especially when the political climate is potentially volatile.
U.S.-based companies must weigh the need for in-country, expert employee assistance services. Too many businesses are poorly prepared to render help and/or cover the range of potential liabilities that arise when their employees are detained, stranded, lost, arrested or threatened on foreign soil.
True global insurance carriers have a worldwide network of in-country claims experts and crises professionals, and offer executive assistance services that provide business travelers with 24/7 access to professionals familiar with the local language, customs and pertinent regulations, and will cover most repatriation costs if employees are injured overseas.
Opportunities abound for U.S.-based companies seeking to expand beyond their borders. For them, tackling risk at the front-end, by securing global coverage and services designed to help keep employees safe while protecting the bottom line, is paramount.
Selecting a true global carrier with the in-country presence, underwriting and claims expertise, and deep financial resources to shoulder unique international business risks is the vital first step toward insuring global business progress.
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