Deciding if International Business Insurance is Right for You
Your company might already have protection in place through a commercial general liability, commercial property, or business owner policy (BOP). But what happens when you expand your business beyond the border of the United States?
In some instances, your insurance limits might be inadequate. In others, it could be nonexistent, leaving your company wholly exposed. Fortunately, international business insurance can help close these coverage gaps and maintain your protection.
Here, I’ll outline the basics about international business insurance, including how it works, who needs it, how much you might expect to pay, and where you can turn when it’s time to learn more.
The Basics About International Business Insurance
International business insurance, also frequently referred to as global or multinational insurance, helps cover risks associated with doing business outside of the United States.
Compared to most other commercial insurance types, though, global business insurance is a combination of different policies that small and large businesses can pick-and-choose from, based on their specific exposures abroad. These include:
- General liability insurance – Protects businesses against claims related to property damage, accidents, injuries, and negligence.
- Property insurance
- International product liability insurance – Covers injuries and damages caused by a defective product.
- Workers’ compensation – Covers employees’ work-related injuries, including rehabilitation costs.
- Commercial auto insurance
- Professional liability (errors and omissions) insurance – Protects businesses for failure to deliver as intended or not at all.
- Kidnapping and ransom insurance – A good idea in high-risk areas where kidnappings and ransom requests are common.
- Medical risk insurance
- Commercial inland marine insurance – Protects goods while being transported via ocean cargo or plane.
- Accidental death and dismemberment insurance
- Defense base act – Covers overseas civilian workers who are employed under a government contract.
Who Should Purchase International Business Insurance?
International business insurance can be beneficial for any company that works or transacts internationally, including online retailers, importers of finished products or goods, event producers, foreign suppliers, those who employ workers outside the US, companies with overseas facilities or joint ventures, and businesses that send their resident workers abroad frequently.
What Are Some Common Examples of International Business Insurance in Action?
Let’s look at a couple of admittedly simplistic examples to outline how international business insurance works in the real world.
Example #1: Repairing Products Abroad
You started a small electronics manufacturing company 15 years ago, and after many critical business decisions, you’ve grown to hundreds of employees—including international sales.
Fortunately, your distributor carries all of the insurance related to product liability, but you recently hired an international team to repair your electronics sold outside of the US. Here, you’ll need to at least carry international workers comp insurance to cover these employees against work-related injuries and damages.
Example #2: Foreign Suppliers
Continuing with the previous example, imagine that you decide not to sell your electronics outside the United States, so you don’t have to worry about hiring an international repair team.
However, most metals like copper, lithium, tin, silver, gold, nickel, and aluminum used in manufacturing your electronics are mined from outside the US and shipped here in bulk. Because one of your business’s primary suppliers is international, fully covering potential hiccups in the supply chain could be beneficial.
Example #3: International Conferences & Exhibits
You have a manufacturing company based in Texas and do not sell any of your products abroad, nor do you currently deal with any international sales or employees.
However, you’re trying to expand into the European market. So, once per year, you host a conference in Belgium, where you help others in the industry exhibit their products.
In this case, selecting the appropriate liability and workers’ compensation insurance could be ideal.
How Much Does International Business Insurance Cost?
The bottom line is there’s no average cost for international business insurance since each package consists of policies tailored to a business’s specific exposures.
Furthermore, like any other type of insurance, what a company pays for international business insurance also hinges on essential factors like:
- The company’s industry
- Exposures
- Claims history
- Requested coverages
- Number of employees
- Annual revenue
With all of these details in mind, where can you turn next if you have additional questions about—or are ready to purchase—international business insurance?
Are You Ready to Learn More About International Business Insurance?
When it’s time to purchase international business insurance, the knowledgeable staff at IHS Insurance Group can help you select the different policies your business needs based on your dealings abroad. This way, we can help you find the coverage you need at prices you can afford and that adequately cover your overseas exposures.
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