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Insurance for the global playing field

The shift toward a global economy not only exposes businesses to the "Asian flu," but also exposes them to product liability suits in foreign countries and the perils of sending their employees abroad. So how do companies make sure they're covered?

A multinational business policy should include:
Coverage for your company
Product liability: Protects you from suits brought against you in foreign countries
"Differences in Conditions" provision: Fills the coverage gaps in a local insurance policy
Differences in Limits" provision: Kicks in once your local policy has reached its limits
Coverage for traveling employees
Extended workers compensation
Repatriation expenses
Liability (covers both the employee and the company)
Business personal property

That depends on the country. In many cases, an American company will buy coverage from an insurer based in the country where it's doing business, but the last two decades have also seen the rise of policies written to cover multinational exposure. In some countries — such as Mexico — it's best to buy coverage from a local insurer. In others — such as the U.K. — a U.S.-based multinational policy (also known as "nonadmitted insurance") will do nicely. Big, multinational corporations usually buy both kinds, with the U.S.-based coverage bridging any gaps in a local insurance policy's coverage.

Travelers Insurance has joined the handful of companies writing multinational coverage for businesses. "[The Travelers World Cover] policy would be most appropriate on a stand-alone basis for companies who have more incidental exposures in foreign countries," says Gary Grindel, chief underwriting officer for Travelers' international division. Other companies writing multinational policies include Chubb, CIGNA, and Zurich. Because each company's needs are different, policies will vary. They usually include coverage for both products and employees.

Protecting your company

A Commercial General Liability (CGL) policy will protect your company from a product liability suit brought against you in the United States, its territories, or Canada. But if a Frenchman decides to sue on his own soil, your company may be vulnerable unless you've got a product liability policy in France. And if your company loses the case and the judgment exceeds the limits of your French policy, you'll have to raid the company treasury for the rest. A multinational policy would cover that suit or pick up where your French policy leaves off.

Protecting your employees

Coverage for business travelers can have several components. It might include liability coverage: say your salesperson wrecks a car while driving in the U.K., or is injured and decides to sue you. It might also include voluntary workers compensation, a good idea for employees on extended trips or those who live in states where workers comp won't pay for injuries outside its borders. Coverage might also include the cost of sending an ill employee back to the states, returning the remains of a deceased employee, or treatment for endemic disease such as malaria. It can also cover losses to "business personal property," such as a laptop computer.

The Travelers policy also includes a toll-free number that business travelers can call for referrals to doctors, lawyers, interpreters, and pharmacists.

How tight is the help network?

Donna Lovre, a spokesperson for Chubb, cautions businesses to investigate the breadth of a multinational policy's service network. "The key to multinational insurance is not the product. The key is how the insurance company serves you overseas," she told Insure.com. Many times, an insurance company will contract with other companies to respond to customer calls in foreign countries. Lovre notes that oftentimes these will be health insurance companies. But if you have an overseas plant and you need someone who specializes in loss control, you might have difficulty reaching the right person. If your company has a specific need, make sure that your insurer will be able to serve that need adequately.

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