3 Things Your Workers' Compensation Insurance Does Not Cover Internationally

It is a stark statistic: according to Arthur J. Gallagher's 2016 market conditions report on Kidnap & Ransom Insurance, approximately 10 foreigners are kidnapped in Mexico every month, with an average captivity time of 30 days.

Moreover, these kidnappings are occurring at a time when Americans are traveling abroad more than ever. The National Travel and Tourism Office reports that 72.5 million Americans travelled to international destinations in 2016. More than half traveled to North American countries, with Mexico serving as the most popular destination with 27.8 million American visitors.

Other popular countries are Columbia and Brazil, with each of these countries experiencing a more than 10 percent boost in American tourism in 2016.

While the locales may suggest pleasure travel, companies are sending employees overseas more often, especially as they expand to sales territories or business operations beyond U.S. borders. As you can imagine, this increased travel also results in additional international risk exposures.

In a previous blog, I presented best practices for protecting your company's greatest assets — your employees — when they travel abroad. Here, I am going to address some additional international coverage that may not immediately come to mind:

Kidnap & Ransom (K&R) Insurance
To put it simply, every country has a K&R exposure, not only the ones mentioned above. One of the best ways to address this vulnerability is with the purchase of K&R insurance. Along with the coverage provided by the K&R policy, it is standard practice for a designated Independent Security Consultant to be assigned to the placement who can provide risk mitigation tips (such as travel warnings and suggested clothes to wear). Despite your love for the Chicago Cubs, sneakers and a World Series baseball cap is a clear giveaway that you are an American.

Do you recall the 2000 movie, "Proof of Life," starring Russell Crowe and Meg Ryan? The film opens with Russell Crowe, an expert hostage negotiator, speaking with Lloyd's of London Underwriters. Crisis responses services are critical in these situations, and your K&R insurer can provide your company with a reputable firm to negotiate. To clarify, your insurer will not pay kidnappers directly, but it will reimburse your company for any paid ransoms and crisis responses costs.

K&R situations occur when employees are held against their will — and therefore, coverage also applies in cases of wrongful detention. These situations may include a local government detaining an employee without cause, or corrupt police demanding payment in order for your employee to cross through certain areas.

Foreign Voluntary Workers' Compensation
Did you know that your domestic Workers' Compensation policy likely has a time limitation for coverage? Many policies do not cover your employees if they are outside of the United States for more than 30 days. Here, Worker's Compensation policies are regulated by the states. And some states allow Workers' Compensation coverage to apply over the weekend, and others do not. If you have employees who travel internationally for weeks at a time, ensure that they are protected 24/7.

A Foreign Voluntary Workers' Compensation policy also provides more coverages than what's offered domestically. This includes covering the costs associated with treating endemic disease, such as Malaria, as well as repatriation expenses, such as in cases when your employee becomes injured and needs to be flown back home or to a hospital in Germany, for example, to stay until he or she recuperates. We do not like to imagine the worst, but if your employee injuries are extreme, a nurse or doctor may be required to accompany them for medically necessary travel. Repatriation coverage provides for that cost.

Business Travel Accidental Death & Dismemberment
One way to eliminate any employee injury coverage gaps is with Business Travel Accidental Death & Dismemberment (AD&D) insurance, which covers both work and non-work related injuries while the employee is on a business trip. When your employees travel internationally on a business trip, do they bring along a spouse or dependent child? Business Travel AD&D coverage ensures that those individuals are protected as well.

Your employees' international exposures are greater than what you would think. As economic or political instability grows, so too does the exposure to K&R and wrongful detention threats. An appropriate insurance program designed to address these exposures should represent one element in helping you maintain your company's growth and financial strength.