If your organisation operates globally, it is essential that you have the correct insurance policy in place to protect your personal and business risks. A global insurance policy helps protect the operations of a business throughout the world from a variety of claims as well as assisting in the event of a potential claim arising.
Below, Partner and Group Director Jack Wolstencroft offers guidance on considerations your organisation should make in regard to its global insurance coverage.
Across the world we are seeing increased geopolitical change and protectionism of various geographies increasing. Whilst in the past these developments centred on developing economies, that is no longer the case, with examples being seen across Europe and the USA.
Where your organisation operates across several international territories, keeping track of all these local regulatory changes can take up precious resources.
The key challenge when setting up a global insurance programme is to make sure you understand what each local policy covers and whether a central global policy will respond to any gaps in the local policy. You don’t want to find out that your cover is not in place following a significant event.
A Global Insurance programme cannot be commoditised
It is important that your insurance broker understands how your operations work and interact with each other. Every global policy should be bespoke and identify your individual requirements. Each organisation has different risk exposures and risk appetites, which in turn leads to different cover requirements and insurance programme structures.
At Griffiths & Armour, our evaluation includes our clients’ local operations, their corporate structure and capital position, any contractual commitments and the product/services being delivered.
Local cover
A suitable local insurance policy for each territory outside of your home country ensures that there is adequate and appropriate cover in place. You should carefully evaluate the terms and conditions of these local policies to ensure they can all be met, as a failure to do so could result in the policy not responding in the event of a claim.
Where you are relying on your global insurer to issue local policies, make sure that these satisfy all local regulatory requirements. Do additional local policies need to be purchased also? If so, could a locally sourced policy meet these requirements as well as provide the cover needed under one policy?
Brexit
As the Brexit deadline approaches, organisations must turn their thoughts to how their international insurance programmes are structured, in particular those with operations across Europe and the UK. Historically a Freedom of Services (FOS) solution would have met your requirements. It is highly likely that this solution will not be available in the future and, as such, alternative solutions need to be considered.
Transparency
When structured correctly, an international insurance programme bridges any gaps in local covers available and avoids duplications. At the same time, your programme should deliver greater transparency on cover and any applicable terms and conditions that might apply.
At Griffiths & Armour we have a wealth of experience in placing international insurance programmes for our clients. These programmes are structured in many ways and we believe the most effective solution for a global organisation is to have a Controlled Master Programme (CMP) in place for your insurances.
CMPs blend local, compliant cover with a centrally placed global policy to maximise your cover and resources.
We are always interested to hear your views so if you have any questions or comments on this article, please get in touch. You can find out information about our risk management platform, RMworks, here.
