Effective insurance coverage is key to international success

Medium-sizes companies have a lot to gain from expanding into international markets, but they need to be well prepared, as 70% of companies affected by major incidents fail within the following months. This figure is even higher among foreign subsidiaries. Taking legal action is often more complicated outside France, and insurance coverage can differ between markets. Recovering money you are owed is rarely easy in regions where local stakeholders are generally better informed than foreign companies.

There are solutions that can help you avoid any unpleasant surprises. While some are easier to implement than others, they all ensure companies looking to conduct business abroad are adequately covered.

Liability

Everything is more straightforward in Europe. Property and third-party liability insurance policies taken out by medium-sized companies in France allow them to enjoy the same level of coverage when providing services in other parts of the European Economic Area (which includes the 27 EU Member States, as well as Norway, Island and Liechtenstein).

For all damage to buildings and their contents, you are subject to the legislation of the country where the building is located. Cargo insurance must meet the regulations of the state where the policyholder’s head office is located. The same rule applies to general liability insurance. Details like these can prove crucial in the aftermath of an incident.

Equally, insurance products outside the European Economic Area need to be chosen wisely. Many medium-sized companies are looking to “venture into new international markets,” according to Alexandre Montay, CEO of METI (an organisation that represents medium-sized businesses), in the French insurance publication L’Argus de l’assurance. “They need support, particularly when it comes to insurance.”

Companies that are daring or have trustworthy contacts in the markets they are interested in can decide to go it alone and look for an insurance company that will agree to cover their risks, but this can be a risky move.

The importance of understanding nuances

Competent professionals can indeed be found worldwide; however, medium-sized companies should not underestimate the impact of language barriers on communication when, in the world of business, each word has a specific meaning and purpose. You must remember that the person you are dealing with abroad will not necessarily be familiar with all aspects of the policy you have taken out in France, which means they might offer you coverage that is different from what you enjoy in France. Decision makers within medium-sized companies often have trouble spotting differences when they are not insurance experts. They often only realise their mistakes in the aftermath of an incident.

To avoid misunderstandings and potential setbacks, seeking advice from your local insurance provider is your best option. Many providers, including MMA, have international contacts. According to Vincent Astié, International Division and Corporate Manager at MMA, “For countries outside the European Economic Area, our customers can take out local policies with other members of an insurance company network we belong to. The International Network of Insurance brings together companies from over 150 countries worldwide. The local policies we design with our partners aren’t carbon copies of our French policies, seeing as each country has its own legislation. Insurance coverage tends to be more comprehensive in France than in other markets, but we always provide a “DIC/DIL” (difference in conditions/difference in limits) safety net to ensure the coverage medium-sized companies have abroad is as close as possible to that which they enjoy in France, both in terms of the conditions and the limits.” This gives medium-sized companies moving into international markets the peace of mind they need.