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Multinational case studies

The examples below are not exhaustive but serve to illustrate the complexity of covering multiple territories.  The Controlled Master programme with locally admitted policies is Chubb’s recommended approach and because “one size does not fit all”, Chubb provides flexible, tailor-made solutions to meet the needs of each individual client, whilst observing local requirements.

Defective product
A UK based worldwide manufacturing company has a Chinese subsidiary that manufactures and sells their products locally. A customer in China is injured by a defective product and brings a claim against the local subsidiary.  Because the manufacturer does not have proper global cover the Chinese liability policy does not provide cover for defective products that are manufactured locally.  The parent company’s liability policy only covers products exported from the UK and therefore the claim would not be paid.  

A multinational insurance programme from Chubb will ensure that cover dovetails with local policies and that the parent company has consistent and continuous coverage on a global basis. It can even plug gaps in cover and avoid currency fluctuations which could impact negatively on claims payments.

Financial standing
The UK company leaves it to their Mexican subsidiary to purchase the most “cost effective” (cheapest) cover. However the subsidiary does not consider the financial standing of the local insurer.  When the time comes for the company to make a claim they find that the local insurer has become insolvent.  The claim is unlikely to be honoured as the Mexican subsidiary ranks as a creditor. 

Chubb’s partners around the world are very carefully chosen for their integrity and financial stability. However if the worst should happen Chubb will honour any covered local claim in the event of a local fronting partner’s insolvency.

An explosion at the India location of a chemicals company results in significant first and third party property damage. There is no local policy; the claim is covered non-admitted under the UK policy. The loss receives a lot of publicity locally due to the severity of the damage.   There is an investigation by local regulators who impose penalties on the local company for having non-admitted insurance. These penalties can range from a fine of up to one thousand rupees to imprisonment of up to one year. 

With a Chubb multinational policy you will be prepared for this eventuality and the claim would be paid under the Indian policy.  This approach would ensure compliance with admitted requirements, any tariff or filed ratings and local tax obligations. 

Workplace injury
A French employee is injured at work and the French subsidiary of a UK construction company is found to be grossly negligent.   As a result, the State Social Security system (CPNS) seeks recovery from the employer for any relevant medical costs and lost earnings paid to the injured employee.  The employee also brings a direct action against the employer for any amounts not provided by the CPNS.  The UK Freedom of Services policy does not cater for this exposure (“Faute Inexcusable”) so the claim would not be paid.

Multinational protection with Chubb provides access to local policies based on good local standard and providing unique local cover extensions not easily replicated elsewhere, such as Faute Inexcusable. Such policies also ensure compliance with compulsory covers, and allow easy access to local pools/schemes and local expertise and advice.  In addition, local premium collection allows tax obligations to be met more easily; policy documentation is in local language and in line with market standard, especially important where evidence of local cover is required to comply with contractual obligations.