International Insurance

Most companies and many individuals have insurance needs that stretch beyond the borders of their homelands. Companies have overseas operations, imports and exports, and other activities that raise the possibility of liabilities in other countries. Individual travel needs may require health or trip insurance to cover unexpected problems, and people living abroad may want even more coverage. All of these insurance needs all under the broad category of "international insurance."

International business operations, including foreign direct investment and joint ventures, require specialized insurance. Even if a company simply trades with foreign partners, new risks are assumed. International insurance products include coverage for:

• Currency fluctuations that might devalue goods or payments unexpectedly;
• Development and infrastructure risks raised in the course of major building projects;
• Political risks of other countries, including risks of nationalization or expropriation of corporate property; and
• Credit risk in international transactions.

In addition, insurance can offer international businesses policies that operate as performance guarantees and bonds. A variety of highly specialized insurance products of many other types is also available to help businesses manage risks associated with international operations.

Freight insurance covers the risk of loss of goods being shipped internationally between businesses or individuals. Even after a product has shipped from the seller's location, the risk of loss may remain with the seller, meaning that if the product is damaged or lost, the seller may not be entitled to payment. Alternatively, a buyer may assume the risk of loss while goods are in transit. Freight insurance covers these risks during shipment at a minimal cost.

For individuals, travel insurance can cover damages related to cancellations or other problems with travel arrangements. International travel can be very expensive, and travelers are well advised to seek to cover the possibility that plans will go awry. Health insurance may be included or sought separately in order to cover illness or injury occurring in the course of a trip. Because international health services costs can be hard to estimate, health insurance can give a traveler peace of mind. Ex-patriots can also purchase longer-term health insurance coverage, as well as life and property loss policies, in their home countries or where they are resident.

Because international business and travel involves interaction with other countries' legal systems and may raise international treaty or supranational regulation issues, it is important to proceed carefully when choosing international insurance. An attorney with insurance experience can advise whether a specific policy sufficiently covers the risks involved in a particular activity or transaction.

This entire area is currently experiencing great tumult and uncertainty due to an international situation that is filled with international terrorism and political uncertainty.

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Travel Insurance Checklist: International Insurance

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