This article is the third in a series designed to help U.S. Government contractors with employees traveling overseas review their current coverage and plan for the future.
If you have employees working OCONUS (outside the contiguous United States), either temporarily or permanently, your business is responsible for bodily injury and property damage claims resulting from incidents occurring overseas. To help determine whether they need to acquire additional insurance coverage for this exposure, contractors should ask themselves the following questions:
Does your General Liability insurance policy extend to incidents occurring outside the U.S. when the suit is brought in the U.S.? Most domestic package policies include a “worldwide territory” and provide coverage for your employees who are working outside the U.S. temporarily. However, the definition of “temporary” can vary from one policy to the next, so it is important that you understand the definition as it relates to your General Liability coverage.
Would your domestic General Liability insurance policy provide local legal representation should a claim for damages be filed in the country where work is being performed? In most cases, the answer to this question is “no”. And if your insurance policy does provide coverage, chances are your business would have to pay for local counsel up front, then request reimbursement of the legal fees from the insurance carrier.
Would your domestic Auto policy provide Hired and Non-Owned Auto Liability and Physical Damage for a rental vehicle leased by an employee overseas? Domestic Auto policies provide coverage only in the U.S. and its territories and possessions as outlined in the territory clause. No coverage is afforded outside that territory. That means that your worker in Puerto Rico would be covered, but the same worker in Cuba would not.
Would your domestic Workers’ Compensation policy respond if an employee were injured while working overseas under a commercial contract? Coverage availability is dependent upon your state’s extraterritorial provision regarding employees working outside the U.S. temporarily. Since this varies from state to state, it is possible that your worker would not be covered by your Worker’s Compensation policy — and you would be responsible.
To eliminate any potential gaps in insurance coverage, contractors with employees working overseas should secure a Foreign Package policy. This type of global insurance policy provides coverage for the needs of your overseas workers while protecting your domestic insurance policy from overseas losses.
For additional information about Foreign Package coverage or to request a full review of your foreign insurance program, please contact Sara Payne, a 25-year veteran of foreign and DBA insurance program administration, at 800-291-6182.
COMING NEXT MONTH: an insurance check-up for your Kidnap & Ransom Coverage