International Liability Insurance More Important Than Personal Effects Coverage

In a recent survey of expatriates we find that for those that looking into international property insurance and international liability insurance, it's protecting their property that made them investigate insurance solutions.  Most expatriates seem to ignore the global liability protection?

At International Property Insurance Group we feel that international liability is far more important than protecting international personal effects, although of course we feel both are important.  What's more, international liability insurance is very inexpensive.

No one wants to have a $40,000 uninsured loss to property because of fire or smoke damage, or because there was a fire in the neighboring apartment but this loss does not have the potential to ruin your life.  A $1,000,000 lawsuit where you carry no international liability insurance on you and your family can bring financial ruin.  

Again, do not expect your employer can step in and pay a personal claim, no matter how important your expat assignment is.  Even if you flee the country to avoid the suit, and there may be no way the "judgement" can find you back in your home country, this could cost you your job and your career.  Employers expect employees to properly protect themselves and their families for overseas property insurance and global liability.

Why International Liability Insurance is Essential for Expatriates

When people move abroad to live or work in another country, one of the very last things they think about is personal liability insurance. Before we explore why we think this may be the last thing on people's minds, let's examine why international liability insurance is absolutely essential for anyone with an established net worth. This coverage is not just for the rich expatriates on high profile assignments.

International liability insurance would cover claims against the insured or the insured's family related to lawsuit or damage awards due to negligence (the the judge or local magistrate deems you or a family member negligent, whether you were or not!) A lawsuit can happen anywhere, it's not just something that happens in the U.S. or the home country. In many countries it's not a lawsuit as most would picture, but a damage award. Here is what would happen in many countries; You or a family member causes harm or financial loss to a local national in your host country. You are brought before a judge or local magistrate. The judge hears the evidence and orders you to pay the defendant $200,000. No 4 month trial... no appeal... bang. What do you do? Are you carrying global liability insurance? At $5 a month to protect the entire family, why not?

Again, we interview many with the false assumption of "I work for a large multinational company and they must have insurance for me in this area." This is almost never the case. They have no corporate or commercial liability policies that can cover your personal claims.

What happens when someone does not carry international liability insurance, the company has no insurance to assist, and a large damage award needs to be paid? Well, the options are few all all are not good for the career of the expatriate.

• The person does not pay and is either jailed, has items seized, or is forced in some way to leave the country.
• The person pays the entire personal liability claim out of his/her own pocket perhaps writing a $50,000 check.
• The employer is in some way, dragged into the claim either to assist in paying the claim or because the defendant is not carrying any personal liability insurance as an expatriate, the employer's legal entity is named and attached in the lawsuit.

Again, an expatriate that takes the arrogant attitude of "my company would pay it for me" has certainly not even attempted to think through the issues of why this is very unpleasant, if not impossible. Our next post will be about just that.

Taking Valuable Articles Into Your International Assignment

When people leave their home country to live internationally, or take an expatriate assignment for a few years, the last thing they think about is insuring their personal effects with the proper international property insurance policy, and protecting their valuable articles in the new location. The most common valuable people need to protect is a diamond wedding ring.

When people arrive in their host country, and when they get around to looking for insurance for their property and valuables, they may find all of the following:

• There is no recognizable insurance market in the host country. What are my options?
• Insurance companies will not work with "foreigners" in the local country.
• An insurance market exists, but the level of coverage and the reputation of the insurer is impossible to determine. What am I buying and what will happen at the time of claim?

The good news is there are insurance companies and brokerages that specifically work with people that are living away from their home country. International Property Insurance Group works with expatriates in 80 countries and all of them need sound international personal effects insurance with a strong global liability policy.

Just like in the home country, valuable articles need to be scheduled and named in the insurance policy, insured up to their true value. However, once secured, the insurance should work worldwide. For example, a theft of a diamond ring in the host country, home country, or even while traveling to a third country would be fully covered if the item was properly scheduled with the insurance company before-hand.