If you decide to do business abroad, it is important to rethink your attitude toward insurance.
All risks that can be insured must be insured. As Rockefeller said, “Never skimp on advertising, security, and insurance, and your business will go belly-up.
The foreign insurance market is very different from the Russian market. For example, in our country there are a little over 80 types of insurance, in Europe there are about 500 types, and in the U.S. there are over 3,000 types. In any country there are voluntary and obligatory insurances, some policies you may not buy but others are required by law. By experience I can say that the better insurance market is developed in the state, the more list of compulsory insurance products is.
Medical insurance
The first thing you need to take care of is medical care for yourself and your family members if you plan to move to the country where you are developing your business. Find out in advance which option will be more beneficial: a local insurance policy or a global one. If the country has public health insurance, which can be attached – I recommend doing so. If there is no such policy, it is worth looking for a local fee-based insurance programs, analogues of the Russian VHI. This option may be inconvenient or expensive, in which case consider the international medical programs – IPMI – International Private Medical Insurance.
Many countries have a well-developed public health insurance system, for access to which employers or employees pay large taxes. For example, in the United Arab Emirates, employees must be insured with a local insurance company. Medical insurance in Europe will cost a local resident much cheaper than a guest. Therefore, it is more advantageous to employ locals.
Property insurance
Wherever the company is located, you need to take care of insurance of its property: premises, equipment, raw materials, spare parts and other things. If the company started working abroad and everything is stable and good for six months it does not mean that one day the ceiling in the store will not collapse or a fire will not happen in the office. There are cases when the asphalt under a shopping center sinks because of a water system failure, it causes a huge amount of damage.
You can insure against all risks at once or you can choose several of them – the most likely ones or the ones you are most worried about. For example, if you do business in a region where floods or fires are common, it makes sense to buy a policy to protect against natural disasters.
Separately, you can insure against the risks of equipment failure, business interruption, fire, or terrorist attack.
Cargo insurance
When running an international shipping business, it’s important to insure the cargo and its transportation. If, during delivery or transportation, the vehicle is involved in an accident, the driver is attacked by robbers, or other insured events occur, the compensation will be enough to compensate the company and the customer. Cargo insurance is a good indicator for your partners, they will be confident in your reliability.
It is worth noting that cargo insurance is standard practice abroad. For example, in developed countries all carriers or cargo owners must have an insurance policy. If you are building a business and do not want to cause doubts to your partners and customers – insure all the goods.
Insurance covers loss of cargo, its breakage and theft. Depending on the mode of transport used to deliver the cargo, the policy can include the risks of a train derailing, grounding and others. The main risks that apply to any method of cargo delivery are fires, explosions, and robbery. It also happens that vehicles go missing, so it is better to include such a risk in the contract.
Transport insurance
Abroad, unlike in Russia, liability insurance for car owners does not cause negative feelings among users, because companies set huge limits and make payments faithfully. Car insurance against damage – Auto Casco – is more affordable abroad than in Russia, because due to the large number of users of the insurance system prices are lower there. The attitude to insuranceabroad is also more correct, for example, the Italians or the French will not go to the insurance company because of a scratched bumper. They will need more serious reasons, which leads to less loss-making insurance business. I recommend that you insure your vehicles, given that the cost of the policy is low.
The most difficult thing when doing business in another country is to overcome the Russian mentality and trust the insurer. Then you can provide yourself with peace of mind, and your business with uninterrupted operation.
There are separate types of insurance for cab drivers who are connected to Uber, Lyft and other services. For example, the “Rideshare” policy from GEICO. Such a policy replaces personal insurance and protects the driver even if he or she has the cab app disabled at the time of the accident.
Liability Insurance
Before launching a business overseas, I recommend thinking about producer, director and officer liability and professional liability insurance.
Perhaps the country where you plan to do business has mandatory liability insurance for the activity you decide to pursue. Study this issue and all the nuances. For example, in the UK, if a product is named after your company, you can be held liable even if you were not involved in its manufacture and sale.
Directors and officers liability insurance (D&O) will protect against large compensation costs if top managers’ decisions result in financial losses. Europe and America have employer’s liability insurance. This is very important because employees know their rights very well and are ready to sue their employer at any time, even for a minor matter.
There is personal liability insurance abroad. This policy is very cheap, but covers large sums of money. For example, everyone in Germany has such insurance, and they are very surprised that newcomers do not have such a policy. It covers damage if you accidentally break someone else’s vase or TV set, even if it happens in a friend’s apartment.
