Whether you have just an employee or two in Canada or Mexico, or your company has robust international operations, you need to purchase international business insurance to protect your business when operating outside the United States. Doing business internationally expands your customer base, talent pool, and revenue stream, but it can also expose you to risks beyond what you’ve covered for in the U.S.
What is international business insurance?
To conduct business outside the United States, you will need all of the coverages you need in the U.S., such as general liability, property, workers compensation, commercial auto, and cyber liability, but your U.S. policies may not cover international exposures. So you’ll need separate international insurance to cover these risks. You will also need policies to account for differing laws in each country, as the regulations won’t identically match those in the U.S. and in your home state.
Proper international coverage also protects your employees and contractors abroad, both those who live abroad and U.S. employees who are travelling. You will want to make sure you’re in compliance with workers compensation regulations both in the U.S. and the country where you are operating.
Why are companies not adequately covered?
Some companies, especially smaller ones that don’t have in-house compliance departments, may not realize they need separate insurance coverage for international operations. Or they assume that only giant corporations with large foreign bases need it, not a business that crosses the border only a few times a year. But any operations, large or small, in a foreign country comes with additional risks and an additional set of regulations to comply with, so any international dealings need to be properly insured.
Types of international business insurance coverage
International business policies need to cover the same types of risks as a company’s domestic insurance policies, as well as additional risks that come with operating abroad (or even just across the border). They also need to be tailored to regulations in both the U.S. and the other country.
Foreign voluntary workers compensation: This type of workers compensation policy covers U.S.-based employees and contractors who face a work-related illness or injury while out of the U.S. Domestic workers compensation policies don’t typically cover claims that occurred outside the country, so employees who travel as part of their jobs need this extra coverage.
Group and individual coverage under the Defense Base Act: If your company is working abroad to fulfill a U.S. government contract, you are legally required to purchase insurance coverage under the Defense Base Act. This policy covers employees are subcontractors.
Blanket international group medical insurance: Most U.S. medical insurance policies do not cover treatment outside the country, except for life-threatening emergencies. So you will need to offer employees blanket international group medical insurance to cover them while they are outside the U.S. on behalf of your company. These policies can be short-term, for those who are travelling for a couple of weeks, or longer-term, for those who have relocated abroad for your company.
Group and individual business travel accident insurance: If your employees regularly need to travel outside the country, you should offer business travel accident insurance. This can be a group policy or individual policies. This policy provides financial coverage for accidents that happen abroad, including those related to war and terrorism. Some polices also offer compensation to employees’ families if the employee dies or becomes permanently disabled as a result of a covered accident.
Special risk insurance: Special risk polices fill coverage gaps left by existing general liability, accident, workers compensation, or medical policies. These policies are not usually too expensive and are a good way to make sure unforeseen risks don’t financially ruin your employees or your business.
Foreign general liability insurance: This type of liability insurance provides coverage to your business in the event of legal actions related to events that take place outside the U.S. How much coverage you need will depend on the size of frequency of your international operations.
Foreign commercial auto liability insurance: Your U.S. commercial auto policy typically won’t adequately cover any accidents that happen outside the country, and they may not comply with regulations in the host country. So you need to make sure you have the proper international auto coverage for employees who drive outside of the U.S. and any vehicles you may have based abroad.
Foreign commercial property liability: If you have any buildings or other property located outside the Untied States, you will need the proper international policy to cover it.
Whether you have one employee who occasionally needs to travel abroad for work, you’re in a border region and have a few drivers with Canadian or Mexican licenses, or you have full-scale operations in another country, you need to make sure you have the proper international insurance coverage. Our commercial lines advisors would be happy to help you find the right coverage for your company’s specific needs.