Does Your Company Have Uninsured Global Risk?
If your U.S. employee rents a car in Canada, does your U.S. commercial auto policy provide coverage? If you send your U.S. sales staff to Mexico for a reward trip and an employee is injured, how are they covered? If you are storing your goods for sale in a warehouse in Mexico, are they insured if they’re stolen?
These questions are excellent ones to be asking yourself as you look at your organization and your employee travel, vendors, properties, distributors, subsidiaries, projects, and clients.
Here’s the thing. Unfortunately for many organizations, these international risks aren’t contemplated or even discussed. Why is that? Most often, it’s because organizations truly believe they’re not global. And, at one point in time, that was probably true. In 2020, it’s probably not.
Questions to Determine If You Have Global Risk
If you’re just not sure, ask yourself the following:
- Do I have a legal entity in another country?
- Does that country accept non-admitted insurance policies?
- Does that country have compulsory insurance requirements?
- Do I have significantly valued property in that country?
- Do I have a lease or other contractual obligations requiring specific limits or coverage only available in that country?
- Do I have a board of directors or equivalent in that country? Does the board have meetings in that country?
- Where are my employees traveling?
- Where are my clients?
Insuring Global Exposures
There are various ways to insure these global risks. Many times, it’s as simple as writing a policy in the U.S. extending workers’ compensation, general liability, auto liability, and property insurance to territories beyond the U.S., Canada, and Puerto Rico.
But often, a separate policy written in that specific country (premium paid, local taxes collected) is the best option and even often required.
Sadly, there isn’t a “one-size-fits-all” solution.
Each specific country has its own compulsory requirements. Some countries may accept and recognize an insurance policy that’s placed in the U.S. But, even if they do, sometimes that country itself has unique property exposures, tax implications, or legal framework, which makes placing an admitted policy in that country a more advantageous option.
How to Ensure You’re Covered
So, as you think about this…what’s the key to ensuring you’re covered? Communication!
Talk to your insurance broker about current and potential global risk. Keep them advised of any changes or upcoming acquisitions, so they can best help you manage your risk.
And if you’re just not sure who to contact or what to do, simply reach out to us here at Holmes Murphy! We’d be happy to have a chat with you!