In recent years, businesses and organizations have faced a slate of new and growing risks. While the worst of the COVID-19 pandemic appears to be behind us, businesses are confronting the persistent challenges of inflation, political and economic instability, workforce shortages, an increase in severe weather events, and other perils.
But even in difficult times, businesses continue to look beyond their borders to drive growth. While expanding internationally creates new opportunities, it also comes with additional risks. When evaluating your insurance program’s multinational coverage, it’s important to consider not only policy options, but also the depth of global expertise and service that an insurer provides.
When you first venture across borders, you’ll need to expand the scope of your current insurance coverage. Your business likely already has policies in place that protect against a range of risks — notably property and casualty (P&C) losses — but domestic policies generally have geographic limits. You’ll need to put new policies in place that provide protections for your business and employees wherever you do business.
But simply expanding the geographic range of your current insurance program will not address special risks that can emerge in the global marketplace. Newly global companies as well as established multinational companies with robust insurance programs should be aware of these four risk areas:
Your business or organization will be in the best position to holistically manage global risks by establishing a Controlled Master Program (CMP) that includes a master policy issued in your home country and local policies in other jurisdictions where you operate. This arrangement allows the master policy to overlay local policies, with Difference in Conditions (DIC) and Difference in Limits (DIL) clauses enabling the master policy to respond to a claim when a local policy’s limits are exhausted or its terms are not applicable.
Whether you’re considering your first foray into the international marketplace or already operate in other nations, you can benefit from an in-depth discussion with an agent or broker with experience in helping companies manage a global insurance program. An insurance professional can help you consider coverage options and evaluate carriers for the extent of their global reach, expertise, and services.
We can help with that.