The world’s your oyster
Doing international business is no longer a big deal. But it can have an impact on your insurance.
Or, more accurately, your insurance can have an impact on how (or if) you do international business.
Most UK insurers’ professional indemnity (PI) policies cover working abroad. And if you like to do business face-to-face, most portable equipment insurance covers stuff lost or damaged abroad too.
But don’t go grabbing your passport just yet. There are a few things to bear in mind.
Check your cover
Your insurance is subject to two different types of ‘limits’: geography and jurisdiction.
Geographical limits refer to where, physically, in the world you can work. Jurisdiction refers to a country’s (or countries’) law your contracts must be subject to/written in. You might see jurisdiction called ‘applicable courts’.
Your policy schedule will mention both geographical limits and jurisdiction, and will look something like this:
In this example, the PI policy’s geographical and jurisdictional limits mean you can only work in the EU, and under EU law. There are variations of these limits and your schedule might combine any of UK, EU, worldwide excluding USA and Canada, and worldwide.
A portable equipment insurance section will note something similar, although, obviously, there are no jurisdictional limits on physical stuff.
If you work outside the EU, you need to make sure it’s noted in your schedule. If it’s not, you’re not covered. For obvious reasons, that can cause big problems.
And unless you specify otherwise, it’s likely your PI will only cover you for working in the EU. This largely depends on what you do and who you’re insured with.
Working in the US or Canada?
If you work with US or Canadian clients, take note.
The jurisdiction of many ‘worldwide’ policies exclude USA and Canada as standard. If you land some work with an American or Canadian client, and the contract is written in their local law, you’ll need a PI policy to match. Or you can try asking for the contract to be changed to EU law, of course.
It’s worth looking into because changing your insurance is pricey.
That’s because US or Canadian clients can be troublesome. This is for two reasons.
First, American companies like to sue first and ask questions later. It’s no secret that America is far more litigious than here, and that makes insurers nervous. The greater the chance of a claim, the more they’ll charge to cover it.
Second, US legal costs are considerably higher than pretty much anywhere else. Not only can a lawyer cost an arm and a leg, but a UK-based insurer appointing a US-based legal expert is a logistical, wallet-emptying nightmare. Again, that means they’ll charge you more as a consequence.
Peace of mind
Even if working outside the EU, or in the US or Canada, is a one-off, you still need to let your insurer know. They’ll be able to update your cover, as well as tell you about any requirements or legislation that you need to know.
For more information, or to update your policy, get in touch with one of the team on 0345 222 5360.