Does your business need foreign liability insurance?

Every commercial boatbuilder has a general liability insurance policy that covers domestic liabilities at its yard or elsewhere in the U.S. This policy follows a boatbuilder abroad when taking a short business trip to attend a boat show or visit a client overseas (as long as the suit is brought in a U.S. court.)

But what about extended periods of time spent in a foreign country at a yard or defense base? Do you have an office in another country, or an employee who works predominantly overseas? You may need foreign liability as well as Defense Base Act (DBA) coverage.

Foreign liability coverage will take care of extended stays or permanent locations internationally. Liability, business auto, employer’s liability and even kidnap and extortion can be added to this coverage.

Once you have this coverage it is important to examine the policy exclusions. Are certain countries excluded? Are certain activities not covered? Just because you have a policy in force, don’t assume all your activities are covered. This is when you need to have a heart-to-heart talk with your insurance agent so you can fully explain where you are going and what you will be doing while you are there.

And what about your employees who are commissioning the new patrol boat at a military base overseas? They receive U.S. Longshore and Harbor Workers Compensation Act (USL&H) coverage under DBA. This is an endorsement that is added to your workers compensation policy. Most likely the contract you have will require you to provide evidence of this coverage before you engage in operations at the foreign base, but always double-check with your agent beforehand to make sure it is in place.

We are seeing more and more builders looking overseas for new opportunities. An appropriate insurance program for activities abroad is vital to protecting this overseas business.

About the author

Chris Richmond

Chris Richmond is a marine insurance agent and licensed mariner with Allen Insurance and Financial. He can be reached at 800-439-4311 or via email.

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