Foreign General Liability Policies

What is a Foreign General Liability (FGL) policy?

The FGL is a specialty liability policy for foreign operations, including permanent branch offices, manufacturing or distribution facilities, or any operation located in another country. It also provides coverage for incidental exposures, such as when an executive or a group of employees travel overseas for business purposes.

Who needs a FGL policy?

If you have employees or volunteers who travel or live outside the U.S., any overseas property or operations, or subcontractors who are located outside the U.S., then an FGL will protect your company’s assets.

FGL policies can cover sole proprietorships, multi-national companies, churches and mission groups, educational institutions, non-profits and any company that travels or does business overseas, even over the internet!

The FGL policy is applicable if an organization:

• Has employees or volunteers who travel or live outside the U.S.
• Owns or leases vehicles outside the U.S.
• Exports good or services
• Has or transports property outside the U.S., including at foreign trade shows
• Outsources work to subcontractors who are domiciled outside the U.S.
• Own or operates locations, such as sales offices or call centers, outside the U.S.
• Stations U.S. workers at foreign offices and/or employs local nationals or TCN’s (third-country nationals)

What does a FGL cover?

Five standard coverage benefits for a FGL policy would include:

• Bodily Injury/Property Damage Liability
• Personal and Advertising Injury Liability (standard benefit is $1M)
• Medical Payments (standard benefit of $25K)
• Foreign Voluntary Workers Compensation (may be opted out of if the company chooses)
  • Provides Workers Compensation benefits to U.S. employees working internationally, subject to the applicability of their state-of-hire WC statutory requirements. These benefits pay for things like medical bills related to a work injury and lost wages, and usually includes an Employers Liability benefit to protect the company in case of a suit by an employee. Examples include:
    • The company hires local manual laborers, and one of them is injured in the course of their work. These employees would be eligible to receive their country-of-origin statutory benefits.
    • Something less likely to be covered would be if the company hosts an event and a local resident working with the contracted catering company is injured. The employee is technically employed by the caterer, not by the company. However, this is the kind of exposure the company would need to clarify at the beginning of the policy review (Is this a normal practice of the company? Do they regularly hire the same types of services?) and it would be handled on a case-by-case basis.
  • Purely voluntary workers – unpaid workers – are not eligible for WC benefits because there is no wage to compensate them for. But again, if this is a normal practice of the company, this exposure should be included on the policy application so that GU can determine if additional medical coverage needs to be added to the policy for these workers in case of injury.
• Foreign Business Auto Coverage
  • Provides contingent coverage for automobile, including owned, non-owned, and hired. This pays for things like third-party damage, damage to the hired vehicle, and medical bills.

Two additional FGL policies options may also be added:

Travel, Accident and Sickness

• Provides an Accidental Death and Dismemberment (AD&D) and Travel Medical benefit, for persons injured while traveling on behalf of the company, but not necessarily a work-related injury. This benefit also provides vital 24/7 Emergency Medical Assistance – you can call anytime, anywhere, and speak to someone for advice or help. Examples include:
  • receiving an injury when getting into a cab at the airport
  • getting food poisoning at a restaurant
  • falling in the shower at the hotel
  • having an allergic reaction to the local environment or cuisine

Foreign Kidnap, Ransom and Extortion Coverage

• Provides a pre-determined amount (minimum of $250,000) to pay for KRE when the process is managed by a specialty company approved by Global Underwriters.

FGL policies may also be customized based on the specific company needs to include things such as Employee Criminal Defense, Archaeological Liability, Wildfire Liability, or anything that may be unique to the business, its operations and exposures. As you go through the application process, be sure to provide complete details on your company’s business practices so that your FGL policy can be crafted to cover your company fully. Every interaction your company has with a foreign country – the people, the government, the environment – is a possible exposure to liability.

How much coverage (benefit limits) does a FGL provide?

Benefit limits for Foreign General Liability policies start at $1,000,000. Benefit limits may be increased to as much as $5,000,000, but your company will need to provide additional justification for an underwriting review.

What are the requirements to get a FGL?

Your company is required to have a valid U.S. address to receive a quote. There is no minimum number of employees required.

What does a FGL cost?

The minimum cost for the standard coverage options is $2,500 annual payment.  Benefit limits for Foreign General Liability policies usually start at $1,000,000.  Benefit limits may be increased to as much as $5,000,000, However, with the higher benefit limit request, FGL underwriters will need additional justification for an underwriting review for any amount over $2,000,000, and the premiums will be higher for these higher benefit amounts. 

Final Thoughts on FGL.

FGL policies can be customized based on your specific company needs to include things such as Employee Criminal Defense, Archaeological Liability, Wildfire Liability, Foreign Kidnap/Ransom/or Extortion coverage, or anything that may be unique to the business, its operations and exposures. Start protecting your employees and your company assets today!

Change is always in the air!  So please contact Good Neighbor Insurance (https://www.gninsurance.com)  at 480-813-9100 (Arizona time zone), or email us at [email protected], for the most up-to-date information on your Foreign General Liability (FGL) options.