MANAGING RISK
T
he saying “The world is your
oyster” means that you can
achieve anything you wish
for in life or go anywhere
you want to because you
have the opportunity or ability to do so.
This metaphor is so true for transacting
business in today’s global environment.
The world is becoming more and more
connected by the day with the introduction
of new technologies and advance
infrastructures. Whether managing
established foreign operations or venturing
overseas for the first time, multinational
organizations are vulnerable to a variety
of risks not typically insured under a
domestic insurance program.
Companies may enjoy the competitive
advantage of doing business in a globalized
marketplace, but you may find yourself
asking, how will my company consistently
manage and measure risks across several
different countries? Such companies may
be faced with the following risks:
• Relocation. Having employees either
permanently or temporarily move to
other countries as part of the business.
• Traveling overseas. This could include
trade shows or other events. It also
includes sponsored trips to other
countries or trips in which business
operations are performed.
•
Import/export. This includes the
holding of foreign licenses used to sell
products or utilizing the services of
suppliers who are located outside the
United States.
• The use of foreign warehousing
services. Domestic companies often
purchase international goods which
are then stored at a warehouse for
before they are shipped to the United
States.
• Crisis situations from political unrest
and personal threats can happen
anywhere and anytime in the world,
putting employees at danger.
• Liabilities arising out of the
operations or premises.
• Liability for bodily injury or product
damage as a result of a defective
product or installation.
A number of specialist carriers are able to
handle international risk, but it can be very
difficult trying to locate a carrier who is
able to write full accounts across the globe.
Trying to handle the risks in individual
pieces can make everything overly
complicated. Businesses that handle risk
in this way are reliant on overseas carriers.
Suddenly they find themselves dealing with
multiple carriers and brokers, some local
and some international, and ultimately
unaware of whom they need to call when
they need help.
Compounding that even further is the fact
that many countries require a broker to be
in the mix in some capacity, which often
leads to confusion as to what the terms
and conditions are, who to contact for
claims, and what exactly is being covered.
More often than not, that leads to coverage
gaps and turns a normal process into a
significantly more complicated one.
Dealing with local laws and regulations
affects many facets of risk management,
not only in the way that claims are handled
but also in even knowing what claims can
be made to begin with. What might be a
standard phrase in the United States or
something that is very typical might not be
typical at all elsewhere.
A Master Controlled Program with a Single
Point of Contact is the ideal and simplest
solution to consistently manage these
risks. A Master Controlled Program offers
unique benefits over a fragmented policies
approach. The advantages of a Master
Controlled Program include:
• coordination of all multinational
policies to eliminate coverage
duplication, to reduce insurance
cost, and to better control the Master
Program to ensure consistency and
continuity;
• ease of management for organizing
important coverage to increase the
flexibility of use and access to a diverse
portfolio;
• compliance and understanding of
local markets, regulation, and culture;
• obtaining seamless claims
administration with worldwide claims
coordination; and
•
achieving worldwide loss control
strategies in local regulations and US
standards.
Structure your Master Controlled Program
to protect your employees, reputation, and
international assets with the following
available coverages:
•
•
•
•
•
•
•
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Foreign Commercial General Liability
Foreign Commercial Property
Foreign Voluntary Compensation
Foreign Auto Liability
Kidnap and Ransom
Political Risk
Commercial Crime
Directors and Officers
So, what are you waiting for? Go take
advantage of the growth opportunities in
the global marketplace, but remember to
manage your global risks wisely! +
BY: GWENYTH P. LUU, CLCS
DIRECTOR - COMMERCIAL LINES
JGS INSURANCE
Gwenyth Luu helps organizations improve
their bottom line and lower their total cost
of risk by implementing the JGS Proactive
Service Platform. The JGS Proactive
Service Platform is an inclusive strategy
that focuses on primary cost drivers of
a risk management program. Gwenyth
helps businesses understand all of their
potential and actual costs and liabilities,
execute an actionable strategy, and deliver
superior client service and support. The
JGS Proactive Service Platform is driven
by continuous strategy and service
delivered on a daily basis throughout
the year. The service platform includes
risk control strategies, claims advocacy
and management, contract reviews and
insurance program design reviews.
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