International Property Insurance Sponsored or Voluntary Program For Employers with Expatiates and Third Country Nationals Working Globally

Whether you have 100 people working around the world or just 1, what do you offer your employees so they can protect their personal property from loss, and to secure international liability insurance in the host country and as they travel? Many employer reading this will say "we do not get involved here," and the employee is on their own for international personal insurance, but is this good business? We can prove it is not.

Many multinational employers are not only beginning to offer these programs on a voluntary basis to employees before an international assignment, they are adopting the international liability insurance premium as part of the total expatriate assignment cost. At least on the international liability side, the interests of the employee and the employer are the same.

"...Employers that have 20 or 200 expatriate employees that have not secured international personal liability coverage are at risk. If an employee is sued for $500,000, or a damage award is assessed against an employee, and the employee has no insurance coverage, what do you think will happen?"

In this case, the lawsuit or the need to pay a damage award will not go away, and the employer mostly likely will be "attached and named" in the lawsuit. Even if employers do not pay the premium for the global liability insurance, if the program is offered on a voluntary basis and half of the expatriate population sign up, millions of dollars of liability will be removed and potential future problems will be eliminated.

Most Expatraites Surveyed Believe The Employer is Providing International Property and Liability Coverage For Them, and Don't Seek the Coverage Themselves for This Reason. Of course, 95% of employers are not providing any coverage here.

Employers should consider the following if deciding to offer a voluntary and optional international property and liability insurance program:

1. Do you have legal entity where your expatriates reside? If they cannot pay a legal judgment or damage award and you are attached, how will you handle it?
2. If your organization was not attached and named in the lawsuit, but the employee had no global liability insurance to pay the damage award, how would this be handled internally? An employee that does not pay would be at best, forced to leave the country and at worst jailed until the debt could be paid.
3. If you were named in the lawsuit against the employee, how would you pay a $100,000 or $1,000,000 personal insurance claim in the host country? Assuming your risk manager has a commercial policy somewhere that would pay the personal claim is incorrect about 95% of the time. Commercial policies cannot pay personal claims. Even in rare cases approved by the insurance company as "work related " vs. "personal" most of the damage awards overseas go against the spouse and children. Claims from family members have no chance of being covered by your commercial global liability policy.
4. Looking at the worst case scenario above, but assuming the company had no legal entity, would you pay the global liability claim for the employee or assist the employee is leaving (fleeing the country)? To see why this is not a ridiculous question please see # 5 below.
5. When asked about this scenario, most HR Directors, Global Mobility Managers, and Directors of Comp. and Benefits say they would step up and assist the employee, to do the right thing, but how could the company possibly make this payment? The payment would need to be treated as income. It could not be written off as a business expense. Who's checkbook or budget code would be able to pay a $100,000 unbudgeted damage award? In tight budgets, who would accept that charge? If your finance office improperly took the charge as a business expense write-off there are host and home country (IRS) penalties. How do you account for the fact that this is income to the employee at the host and home country location? Yes, the damage award is paid but the employee is responsible for $30,000 of taxes on this "income?"

A potential Pandora's box of complications exist for the global organization that does not have a strategy to address these real insurance needs. The voluntary solution can remove all of this headache at no cost to the employer.

Your employees need an international renters insurance solution. Why not provide them with one at NO COST to the employer?