If you are working internationally as an expatriate, you may not believe you need to secure international property insurance and international liability insurance on your own. There is a belief among expats the employer would make the employee whole if there were a claim. This is not the case.

IPI has even been told by the Employee Benefits Office of major companies that "we don't need to look into that for our people because somewhere we must have coverage for employees that live overseas for these kinds of situations." We see confusion on both sides, not just with the employees.

One of the biggest reasons international assignees do not secure their own international personal property insurance is because of something we call "no meeting of the minds." The facts below are even more compounded in the case of international liability insurance.

"..The international employee believes the employer has an insurance program somewhere to cover personal claims, or has assumed responsibility for the personal effects of the employee after the move when in reality, no corporate insurance exists that can cover the personal claims of employees, whether the claims be for international personal property OR global personal liability.

FACT: Global commercial property and liability policies do not cover personal claims of a non-business nature.

Why employers cannot pay for the global personal property and international liability claims of their international employees.

1. Personal claims are not covered by global commercial policies in the Risk Management Department. If the office building explodes it's covered. If you have an apartment fire and lose personal items, there is no coverage.
2. A payment to an employee to cover a personal claim would need to be treated as income to the employee and taxed as such. This means a $40,000 property loss from fire would need to pay an employee over $60,000 because taxes need to come out.
3. A payment to an employee to cover a personal claim, (say to settle a $20,000 damage award liability,) could not be treated as a business expense by the company and cannot receive favorable tax treatment in either the host or home country.
4. The employer covering the international personal property insurance claim of an employee would set a precedent that may cause employee relations problems for many years to come. What may be a small payment to keep an employee happy now may end up costing 10 times that amount as other employees demand the same action and fair treatment later on.
5. A payment from the employer to the employee would almost certainly create accounting mistakes, and if the expense was knowingly classified as a business expense, it's a serious tax code violation.
6. The employer has no budget for these expenses now. What "checkbook" at the company would provide payment to cover damage or theft of an employee's furniture... wife's jewelry.... or kids toys?