What Is World Insurance?

World insurance is a type of commercial liability policy with extended global coverage. World insurance provides coverage in the event the policyholder is sued anywhere in the world. In general, however, commercial liability policies have a geographic limit for coverage.

Multinational firms, corporations with a global footprint, or domestic companies that have contracts with international partners/associates often obtain this type of insurance.

Key Takeaways

  • World insurance provides commercial liability coverage in the event the policyholder is sued anywhere in the world, subject to some restrictions.
  • It is common for companies with global operations or who have contracts with international partners or associates to purchase world coverage.
  • Some common types of world insurance include foreign commercial general liability, foreign business auto, foreign voluntary workers’ compensation, and foreign travel accident and sickness insurance.

Understanding World Insurance

World insurance requires the policyholder to pay an additional premium. In addition to property and workers compensation insurance, commercial liability insurance (also referred to as general liability insurance) is essential to businesses.

This insurance protects the assets of a business in the event it is sued for alleged bodily injury or property damages. The insurer may also cover damages and legal expenses associated with covered claims involving actual or alleged: product liability, contractual liability, personal injury, advertising injury, and other commercial risks as indicated in the policy.

It's important for organizations to understand the scope of their insurance needs for their international business operations. It's critical to protect corporate assets, and most insurance policies placed in the U.S. provide limited, if any, coverage for losses occurring abroad. There are numerous specialized world insurance policies available to companies for conducting international business that are designed to provide global protection.

Types of World Insurance

Depending on the extent of the foreign business being conducted, there are several types of insurance to consider. Many of these and other foreign liability coverages can be packaged and purchased together and added to as business needs change.

Foreign Commercial General Liability

This type of coverage is similar to domestic liability coverage, but it's for foreign occurrences and includes protection for U.S. occurrences when a suit is brought outside the U.S. or Canada. This type of coverage becomes necessary if manufacturers and distributors that sell products outside of the U.S. are sued in foreign jurisdictions. A U.S.-based policy would only cover lawsuits that are filed in the U.S. or Canada.

Foreign Business Auto

Companies buy this to protect against physical damage and liability for hired and non-owned vehicles operated overseas. Coverage is typically needed for limits over and above the minimum or statutory limits that are required to be purchased from the rental company in the foreign country.

Foreign Voluntary Workers’ Compensation/Employers Liability

The purpose of this coverage is to extend benefits for U.S. employees while traveling overseas or assigned to work outside the U.S. and Canada. Coverage can include medical assistance programs and repatriation expenses.

Foreign Commercial Property and Business Income

This type of insurance affords protection at unscheduled locations while in transit for laptop computers, sales samples, and personal property at trade shows overseas. A more extensive policy may be required for owned or leased facilities.

Foreign Crime

A kind of coverage that protects against losses from dishonest acts perpetrated by employees overseas, including forgery, theft, or robbery.

Foreign Travel Accident and Sickness

When companies, or individuals, buy this type of insurance, they are looking for additional protection in the event of an emergency while traveling overseas.