April 10, 2023 March 9, 2006 1
A Foreign Concept:International Insurance
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Agenda:
Assessing International Exposure International Package Policy Overview Mistakes and Misconceptions Speaking the Foreign Lingo… Questions & Answer Session
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Facts & Figures…. $40.4 = export merchandise shipped 2006 (6th among
the states in this category) 2002 to 2006 merchandise exports for Michigan
increased $6.6 billion (20%). MI recorded the 13th largest growth in exports among the 50 states.
MI exported to 195 foreign destinations in 2006. Largest market(s) = Canada ($23.8B), Mexico ($4.7B), Germany
($1.2B) Other Top Markets: Japan, China, United Kingdom, Venezuela,
Austria, France and South Korea. Of MI’s 30 biggest markets, exports to Iraq grew fastest
over 2002-2006 Surging from 45k to118m or 263,000% Exports: Russia (up 674%). China (up 257%), Venezuela (up
186%)
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What is being Exported? Manufactured Goods (97% of all exports)
Transportation Equipment ($21.2B, 52%) Machinery Manufactures ($4.1B) Chemical Manufacturers ($3.2B) Primary Metal Manufactures ($1.9B) Computers and Electronic Equipment ($1.5B)
Fastest Growing Manufactured Exports Transportation Equipment
2002-2006 grew $1.6B
*Information provided by the State Export-Related Employment Project, International Trade Administration, Bureau of Economic Analysis, Origin of Movement State Export Series, and Bureau of the Census. Does not include statistics on products related to non-manufacturing sectors.
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We live in a Global Economy! International Trade now accounts
for 1/3 of the GDP in the USA. Companies that are managed in
the U.S, can be sued in the U.S., no matter where the complaint occurs or where the product is manufactured.
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What can really go wrong? Employee travel
Sickness, Injury, Death Occupational and Non-Occupational Injury/Illness
Car Accident(s)/Violations Injury, Imprisonment, Fines
GL Exposure Bodily Injury, Products Liability, Premises Legal
Damage Kidnapping, Property Damage, Cargo Theft,
Extortion Linguistic and cultural differences; Theft or lost
documents
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Knowledge is Power! Most every U.S. company has some foreign
exposure(s): Trip Travel Importing/Exporting/Licensing/Franchising Foreign operations/Subsidiaries/Joint Ventures Strategic Growth and Acquisition
Don’t “assume” it’s covered or that it doesn’t exist.
Protect your book of business “If you’re not writing it, someone else will!”
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How do you assess the exposure? ASK!
Do they have overseas sales?
Do they have employees traveling abroad?
Do they exhibit or participate in Trade Shows overseas?
Do they work on any military bases abroad?
Do they have facilities overseas?
Do they have employees living abroad?
Do they rent or own cars overseas?
Do they export goods outside of the USA?
Do they sponsor trips, tours or study groups abroad?
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If they answer YES to any of these questions,
then they need International Insurance
Coverage!
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Foreign Commercial General Liability
Foreign Auto Liability Foreign Voluntary
Workers Compensation & Employers Liability
Travel Accident & Sickness
Real & Personal Property Insurance
Kidnap & Ransom, Extortion
Marine Cargo Political Risk Crime
An International Package Program:
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Advantages of a Package Policy
Nine lines of coverage One Underwriter One Premium One Policy One Invoice Ease of Doing Business Can include local coverage
for foreign operations
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Who fits the Profile? US/Canadian Corporations with foreign
exposures Middle Market/Corporate Accounts $25M - $500M in revenue worldwide Trip/Travel – Foreign Operations DIC/DIL or Controlled Master Program(s) May Require Local Policies (i.e. GL, UK EL) Guaranteed Cost Program Minimum Premiums = $2,500 and up
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Specializations: Universities and Schools
More than 100,000 students study abroad each year
Entertainment Coverage for entertainers, their
entourage and their equipment Energy
Specialized approach to a sensitive class of business
Non & Not for Profit Groups (NGOs) Missionaries (most often going to the
more high risk countries and remote places)
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Target Markets: Importers & Exporters Foreign Sales and Distribution Risks Manufacturers Professional practices: Legal, Financial,
Advertising and Engineering Services Higher Education
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Mistake #1: Domestic GL will respond… Product manufactured in U.S. is used in a
finished product in Italy. Finished product causes injury to Italian
child, whose family seeks damages from Italian and U.S. company.
Lawsuit filed in Italian court is not covered under U.S. firm’s GL policy.
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Mistake #2: U.S. Work Comp insurance will cover it… U.S employee is working temporarily in
India and contracts Cholera . The employee is treated overseas and
returns home seeking further treatment. Bills are denied as there is no coverage for
Endemic Disease under the employee’s domestic worker’s compensation plan.
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Endemic Disease
Noun 1. A disease that is constantly present to a
greater or lesser degree in people of a certain class or in people living in a particular location.
Source: WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved.
Examples: Hepatitis B, Typhoid, Malaria, Typhus Fever, Lassa Fever, Measles (U.S.)
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Mistake #3: No need to buy additional AD&D and Medical Expense Insurance.
Employee travels to China for work. Employee becomes sick, is treated at a
local hospital and pays bill with personal credit card.
Back home, employee’s medical carrier refuses reimbursement for extra-territorial medical treatment.
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Mistake #4: Don’t need to worry about insurance for foreign employees.
A British citizen is working in Brazil for a U.S-based employer.
The British employee slips and falls on stairs at a restaurant, spraining their ankle and wrist.
Worker is taken to a local hospital, but has no coverage under the British national health plan.
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Mistake #5: Easy to replace stolen or lost documents, money et al. Employee travels to Hong Kong and has
his briefcase stolen at the airport while gathering his luggage.
All his money, identification and credit cards are inside.
He does not understand Cantonese or Mandarin and does not know how to place an international phone call.
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Valuable Program Benefit = Emergency Assistance Services
Provide fast, life-saving help in an emergency
Make international travel less troublesome
Toll free or Collect (24 hr/7 days/365 days)
English speaking assistance Proactive and Reactive resource for
international travel Services; Not insurance!
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Travel Assistance Services: Lost Documents Lost Personal Effects Embassy Information Security Evacuation Language Interpretation Legal Referrals Emergency Messages Emergency Travel Services Weather Currency Rates Bail Bonds Emergency cash
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Medical Assist Services:
Hospital Guarantee/Coordination Immunization Medical Record Storage Medical Transport Repatriation of Mortal Remains Medical Referrals Emergency Medication
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Speaking the Foreign Lingo… Expatriate (Expat)
A US National that is living and working abroad.
Third Country National (TCN) A foreign national working in a foreign country (i.e. an Australian working in France)
Local National (LN) A person who lives and works within their own
country (i.e. a Chinese person working for a US owned or affiliated operation in China)
Foreign Voluntary Workers Compensation (FVWC) Provides voluntary, not mandatory, US workers
compensation benefits as well as standard foreign extensions, such as excess repatriation expense and endemic disease coverage; normally 24/7 coverage for trip travel.
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Foreign Lingo continued…
Foreign Auto Always on an excess basis over statutory limits;
clearly not a substitute for local compulsory coverage. DIC/DIL
Difference in Conditions, Difference in Limits; fills the inconsistencies and brings the firm’s insurance program up to a certain uniformity (US Market Standard) of coverages and limits.
Repatriation Returning Home as a result of accidental injury
or illness.
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More Foreign Lingo… Controlled Master Program (CMP)
A coordinated multinational insurance program under which coverage terms and pricing are centrally negotiated.
Admitted Coverage Signifies that the insurance company is authorized (licensed) to
conduct insurance business in the country where the insured has operations.
Non-Admitted Coverage Coverage written or issued by an insurer that is not licensed or
authorized in the country where the risk is located.
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Final Thought:
The landscape of doing business has changed; so too, should your approach towards your client’s business and insurance needs.