Could Your Multinational Coverage Be Missing Something?
Simply having multinational coverage may not be enough for U.S. businesses with global operations. Our research shows that most mid- to large-size businesses are either uninsured, underinsured, or improperly insured. The Hartford partners with businesses and their agents, brokers and risk managers to design global risk solutions to address an organization’s specific business and risk finance exposures.
What Is Global Insurance for Your Business?
Global Insurance protects U.S. businesses that have multinational locations or operate throughout the world. With each new country where a business establishes operations, there are new challenges to overcome. An insurance claim has the potential to turn into a complicated maze of red tape due to language barriers, local laws, customs, and norms that differ from country to country. A Global Insurance policy helps protect a company’s operations throughout the world from a variety of claims, including property damage, bodily injury, or cyber and data breach. It can also help ease the claims process and elevate the customer experience when the provider has local relationships and capabilities on the ground.
A company with offices in the United States typically has a variety of business insurance coverages, including cyber and data breach insurance. But imagine if a data security breach occurred at one of the company’s offices located outside of our country? In most cases, the cyber and data breach insurance policy for the U.S.-based office would not cover the international claim. Global Insurance extends business coverage to international locations for U.S. companies that have operations in other parts of the world.
The Hartford has a long history of helping businesses protect what’s uniquely important to their success with business insurance solutions designed to meet their specific needs. When those companies also have operations outside of the United States, we are committed to helping them protect their global operations. That’s why we partner with AXA Corporate Solutions to deliver local insurance policies to our U.S. business clients with multi-national office locations. The AXA Corporate policies are issued locally, paid in local currency, and are specific to the country where the business is operating.
Why Does Your Business Need Global Insurance?
As more businesses seek opportunities beyond their national borders, global insurance programs are gaining attention – and popularity. Having local capabilities to help a company in the country where it does business is critical. This is especially true as more and more countries and regulators are requiring businesses to have coverage through local insurers.
Admitted Versus Non-Admitted
Different countries have different rules and regulations. Insurers are considered to be either non-admitted or admitted in a country depending on whether they are licensed and in compliance with the country’s local insurance regulations. If they are locally licensed and complying with local regulations, the insurance provider is deemed an admitted insurer.
A decade ago, a single master policy might have been sufficient for a U.S. business to be insured in most international locations, but not anymore. More and more, regulators today are requiring locally admitted providers, increased policy limits and broad coverage terms that allow claims service to be delivered through a local policy contact.
Globalization and advances in technology are connecting companies around the globe. With supply chains spanning several countries, every link at every stage in the process needs to be protected. This means global insurance has become a prudent and necessary investment to ensure that accidents or missteps at international points in the business process do not derail profitability and the achievement of business goals.
The advantages of having Global Insurance for your business include:
- A centralized underwriting team
- Cost efficiency
- Consistency of coverages
- Coordinated and consistent claims handling
The Hartford partners with insurers in over 150 countries to provide coverage on a locally licensed and admitted basis. The Hartford coordinates specialized teams of program architects, local underwriters, and experienced claims and service delivery resources in order to deliver personalized customer-centered solutions locally.
Types of Global Insurance for Business
Many clients want to localize a range of coverages: property, casualty, directors’ and officers’ liability, financial and professional lines, and even cyber and data breach.
The Hartford offers U. S. companies with global operations a variety of insurance coverages, including:
- Cybersecurity and Data Breaches
- Business Interruption and Income Insurance
- General Liability
- Commercial Auto Insurance
- Professional Liability Insurance
- Workers’ Compensation Insurance
- Kidnap and Ransom Extortion Insurance
- Business Travel Accident Insurance
- Commercial Umbrella Insurance
Increasingly clients are expecting coverage solutions that address the total risk exposure of their local operations.
What Does Global Insurance for Business Cover?
For U.S. companies that do business in more than one country, every border introduces a whole new set of challenges. Laws, customs, and language barriers can turn an insurance need or claim into a maze of red tape.
To help companies manage, our multinational products can provide coverage in over 150 countries through a single point of contact in the U.S. with the same high commitment to quality and customer service that you have come to expect from The Hartford. It’s borderless insurance, delivering one coordinated insurance program for every risk we cover. Helping you get past borders to a world of opportunities.
You may conduct business overseas in a variety of ways. The Hartford offers insurance packages for a wide range of these ventures, from occasional trips to overseas manufacturing operations.
You will have access to powerful risk engineering services, just as you do stateside. And consistent, coordinated, high-quality claims services. So you can put aside worries about unknown risks on unfamiliar turf.
How to Reduce Risk Globally for Your Business?
Currency risk or exchange rate risk is a real concern when conducting business abroad. The differences between the value of the U.S, dollar compared to the currency values in other countries where you operate – and the fluctuations in those values - can have a huge impact on your financial condition.
Now, there is a growing awareness of exchange-rate risks. More clients are wondering whether they’d be covered adequately for this risk by local insurance policies. They’re examining whether they are spending more buying globally rather than locally. A cost/benefit analysis may reveal that purchasing locally admitted policies is the best approach, but ultimately, you may need a coordinated global program to help mitigate the total cost of risk and provide continuity of coverage across business activities in multiple countries.
How to Prepare Your Multinational Business for Regulatory & Tax Changes
With regulatory and tax changes come new concerns. The expectations and requirements of tax bodies, regulators, and rating agencies are growing. Local insurance and tax regulators are paying greater attention to compliance with laws in their home countries – and requiring the use of local admitted coverage by the companies doing business in those countries.
More insureds, underwriters, and brokers are being audited for violations of insurance regulations. In the U.S., for example, one of the biggest challenges is enforcement of regulations.
The Internal Revenue Service considers claims payments made in the U.S. for losses suffered by overseas entities be treated as taxable events. And the financial implications for non-compliance can be severe. The use of local admitted policies can help minimize these risks and complexities.
Global program providers need to find ways to operate efficiently within an expanding set of regulatory and risk issues. These include:
- Compliance with local regulations through the use of local admitted coverage
- Validity of the broker’s licenses in the markets covered by a program
- Design of insurance programs that meet the risk finance strategy of their clients
What Are the Benefits of Global Insurance?
Today, even a small company can source or sell products and services overseas. In fact, according to a recent survey of customers of The Hartford:1
- 90 percent were found to sell products and/or services outside the U.S. (including internet sales)
- 86 percent had employees who travel outside the U.S. for business
- 70 percent have leased or owned premises outside the U.S.
Fortunately, global policies can be written for any size company in potentially any industry.
For larger accounts, there are multiple factors to consider, such as mix of scope and size of operations and financial structure. If you’re operating in a litigious market, you need a strong financial presence. Even in emerging markets, third-party injury lawsuits are on the rise.
Careful policy wording by itself isn’t sufficient protection. Multinational companies can obtain appropriate and relevant coverage through a controlled master program structure that combines a broad master policy with local policies issued in the countries where the company operates. Beyond policy wording, these are also important elements that should be factored into the solutions package:
- Information about different markets’ tax and regulatory landscape
- On-time issuance of policies so that projects and important business functions can commence under proper coverage
- Handling claims efficiently and consistently across borders
Why Choose The Hartford for Multinational Global Insurance?
For over 200 years, The Hartford has been focused on doing business the right way, helping businesses prevail and delivering on our promises. In fact, we have been recognized as a World’s Most Ethical Company® 10 times by The Ethisphere Institute.2
We’re ready to help U. S. businesses meet global challenges and prevail – wherever they conduct business – with these advantages:
- Fewer coverage gaps. The Hartford offers a broad package of protection that eliminates many coverage gaps.
- Broad limits. Coverage includes up to $2,500,000 for business personal property for scheduled locations and up to $500,000 for miscellaneous business personal property.
- Customized coverage. Multinational Choice can be customized to meet the unique needs of your clients, with six coverages, plus 24/7 travel support services from Europ Assistance.
- Umbrella coverage. The Hartford’s umbrella coverage limits can be localized as part of a CMP to meet coverage limit and contractual needs. Excess casualty (auto, commercial general liability, and employers’ responsibility) is also available.
- Reliable claims service. Multinational claims and support for kidnap and ransom and extortion are managed by The Hartford.
- Growth potential. Our coverage can grow as your clients’ businesses grow, with higher limits and coverage options.
The Hartford’s global insurance programs, packages, and services include: