Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Apr 3, 2022

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If your company is one of the majority in the US that does business internationally, you might be exposing yourself to risks that you are unaware of. In days, you could lose your business if you’re not properly covered. Unfortunately, many people lose not just their businesses and their livelihoods, but also personal property when they go under. At a certain point in a business’ growth process, international coverage is essential. The key is doing it the right way.

It’s true that businesses recognize the need for insurance that will protect them against domestic incidents, but what many owners and manager don’t often consider is that frequently their business insurance coverage does not extend internationally. This is where the need for international business insurance becomes important.

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Business owners and managers often consider international business insurance only for large companies and multi-national conglomerates. With the growing use of the Internet and other factors that make the world so much smaller, adequate coverage is no longer an option, but a smart way of doing business.

How Can You Prepare for Risks You Don’t See Now?

In most cases, the biggest hurdle is for owners and managers to recognize the risks involved in doing business internationally, as well as the advantages of having adequate insurance just for these needs. Even when a business is headquartered in the US, but representatives travel to foreign countries, substantial risks can be involved that call for specialized insurance coverage.

International business insurance is specifically designed to cover the risks a company encounters when they are exposed to when conducting business outside of the US. For a wide variety of reasons, including differences in coverage requirements, legal requirements, and risk exposure are different in foreign countries. Other important factors include differing currency, languages, local customs, and political and influences must be considered. All of these factors present different exposures and pitfalls. Even a basic international insurance policy will cover such items as auto and general liability.

For all these reasons, it’s critical to choose a company that operates in the countries you plan to expand to. Companies like Chubb work in multiple countries across the world. But if you’re expanding to Cambodia and they haven’t done a lot of business there, they may not know how to help you in sticky situations whether it involves property damage, voluntary workers and their medical expenses, or the wide range of other issues that can come up.

International business insurance normally extends limits and broadens coverage against many types of exposures that may be encountered in foreign countries. This often satisfies coverage requirements of local as well as foreign governments. This is important because often coverage limits offered by firms are much lower than those offered by American firms.

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Why Would my Business Need the Additional Coverage?

Unfortunately, most firms do not carry adequate business insurance coverage. Further, many business owners and managers believe that risks taken to do business in other countries are not insurable. They believe that if anything happens it’s just the way it goes, especially in new or high risk markets. Others believe that general liability insurance will cover everything. In the case of both of these cases, nothing could be further from the truth. The higher the risk or uncertainty of international exposures in business, the more you need the right insurance. Unfortunately, a big enough bump in Cambodia or Nigeria could disrupt your business in the US if you let it with coverage gaps. International insurance solutions are more accessible than you might think.

Insurance policies issued by American firms often do not include coverage of risks assumed by clients doing business in other countries; therefore, the additional coverage is needed to cover risks. This does not eliminate the need for local coverage. Instead, some overlap is beneficial to firms doing business, wherever they are.

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What About Incidents which Happen During Travel?

Travel to and from the jobsite is often covered by business insurance policies, which cover employees in situations specific to work travel. These might include kidnap and ransom, transit, crime, cyber liability, loss of passport and other occurrences.

The bottom line is that business liability insurance for those firms doing business in foreign countries doesn’t cost, it pays.

Off-Duty Coverage

It is important to note that firms who sent their workers overseas on business should have coverage for all of their activities, whether they are on duty or off. Some insurance providers only cover employees when they are working. Others provide coverage to workers whether they are working or not when an incident occurs. This type of coverage provides for medical and travel assistance regardless of the circumstances. These might include injury, death, repatriation, and other incidents.

It is also important to realize that companies are exposed to liabilities even when the workers that represent them are off-duty. Situations that illustrate this include a worker who is off duty when injured or otherwise not able to work, but the company is still held responsible for work not performed in that employee’s absence.

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Why is International Business Insurance so Important?

In these turbulent times, where Americans travel overseas to countries where civil strife and lawless behavior is more common, it is important to provide coverage for business activities that occur in these areas. Some areas are very safe to travel in and to, but others are not. In fact, some areas are openly hostile to Americans and even non-Americans who work for American companies. It is for these workers and the business that their work generates that American firms would be best to purchase international business insurance.

Not only are general circumstances often volatile, but specific incidents which can endanger the lives of Americans working abroad as well as for the companies who employ these foreign workers. Kidnappings, murders, and other such crimes can affect not only the person and their family, but the business that the workers represent. Fortunately, international business insurance is available to provide coverage to protect possible losses in these and other circumstances.