Business is becoming increasingly global. This can lead to new opportunities, but it can also complicate risk management. If you operate an overseas business, you need to make sure it’s protected with the right insurance.
Traditional Business Insurance Coverage with Overseas Protection
Businesses that operate overseas have many of the same risks as businesses that operate domestically. These risks include:
- Damage to the property owned or leased by the company
- Job-related injuries or illnesses experienced by employees
- Employment practices liability
- Business interruption
- Property damage or bodily injury suffered by third parties
- Monetary loss experienced by third parties
- Intellectual property risks
- Cyber security risks, including ransomware and data breaches
To manage these risks, global companies need many of the same insurance policies that are normally seen in the U.S., such as commercial property insurance, liability insurance and workers’ compensation insurance. However, because laws vary from country to country, U.S. coverage may not apply overseas. Businesses must secure coverage that is valid in each place where they do business.
Additional International Business Insurance Types
In addition to securing traditional policy types that are valid overseas, international businesses must also consider whether additional coverage types are needed.
For example, a business that ships goods overseas faces considerable risk in doing so. Marine cargo and marine inland transit insurance may be necessary to protect against these risks.
The environmental and political risks of the area must also be considered. For example, the right natural disaster and catastrophic coverage can protect against the disasters that are most likely to impact the area. War and terrorism insurance policies may also be advisable, along with kidnap and ransom insurance.
Doing business overseas also necessitates dealing with foreign regulations, taxes and currency exchange. The appropriate insurance coverages can manage the risks associated with these issues.
Obtaining the Right Coverage
To manage risk effectively, the various possibilities must be assessed, and the appropriate coverage types secured. This is true for any business, regardless of where it operates.
However, if you are operating an overseas business, you have even more to consider. On top of the policies generally recommended to business in the U.S., you must determine whether additional coverage types are needed. You must also make sure that the policies are valid in each country where you do business and that you are adhering to the various laws and insurance requirements of these countries.
An experienced insurance broker can help you navigate international business insurance issues. Higginbotham is a member of the Globex International Group for multinational insurance and risk management. Consult with one of our brokers to learn more.
