Going Global? Make Sure Your Insurance Coverages Aren't Left Behind
One of the key ingredients to successful global trade is properly structuring international insurance in your risk management program.
By Phillip M. Lyon, Brown & Brown Commercial Insurance
Who isn't thinking of going global? The decline of the US dollar is making American products more cost competitive and attractive to foreign buyers, so many companies are launching overseas operations. This rush to international trade is accelerating as vast new market opportunities in China and Eastern Europe rapidly open to western trade. However, for companies new (and not so new) to foreign trade, the learning curve on this road to potential riches is not without potholes.
One of the key ingredients to successful global trade is properly structuring international insurance in your risk management program. With few exceptions, domestic insurance programs end at the shores of North America. Don't be fooled if your general liability coverage includes worldwide products, either. This valuable extension of domestic coverage is limited in scope and coverage. Your company needs the correct protection, properly placed, to see you through start-up, and then your coverages need to be modifiable for growth appropriate to the countries where your activity will occur.
Whenever considering international sales, two questions come to mind:
Will employees travel overseas?
Without proper international insurance protection, your business will not have liability coverage for employee actions or workers compensation coverage. Other issues to consider in today's global business world include kidnap and ransom, terrorism concerns, endemic disease, need for medical evacuation and the need for English-language-speaking pharmaceutical and medical assistance.
International insurance addresses these issues and more.
Are you shipping product overseas?
You need to know the ins and outs of ocean cargo coverage so that you understand why a freight forwarder's cargo insurance is typically not the best solution, coverage or price. An owner-controlled ocean cargo program will save substantial money in most cases, provide broader coverage, including pairs and sets clause, consequential loss and contingent interest clause. More importantly, as the policyholder, loss control services and claim adjustment is done directly for you. When negotiations begin on recoveries and salvage, you are the named insured, not the freight forwarder.
It's a big world out there. Technology shrinks communication time, but not cultural differences. International insurance will help ensure the protection of your employees, as well as your products and services.
For more information, contact Phillip M. Lyon at 586.977.6300.