This article was provided by Neil Wilson (pictured), Senior Technology Underwriter at Travelers Europe.
For your tech clients to operate in a global business environment, they must be able to conduct business across borders through different markets, supply chain partners and distribution channels. While doing so can offer them great opportunity, it also generates risk. That’s particularly true as pandemic-related challenges persist and major world economies are straining under rising commodity prices, high inflation and debt, and a shaky labour market. Indeed, the World Economic Forum expects the global economy to be 2.3 percent smaller by 2024 than it would have been without the pandemic. Many countries continue to struggle to manage a sustained recovery.
To operate with confidence in this environment, your tech clients need to have the right insurance cover in place to give them the freedom to pursue opportunities without delay as they navigate challenges. Being proactive can pay off: According to PWC’s 2022 Global Risk Survey, 39 percent of business leaders who responded to the survey said they were making better decisions and achieving sustained outcomes by consulting with risk professionals early. Brokers can be valued partners to tech clients by helping them manage existing risks and anticipate new ones, providing the security they need as they expand into new territory.
What to look for when securing global cover
We advise clients to look for these five elements when securing global cover:
1. Seamless protection. When problems occur in the course of conducting business, the knowledge that you have the right protection is a relief – and helps ensure operations can proceed with minimal disruption. Without such protection, a business can be exposed to surprise costs and interruptions: An overseas car accident involving a UK-based employee, for instance, could generate significant expense if the local auto insurer refuses to cover the accident based on how they apply policy exclusions in the local policy.
To help tech clients avoid this kind of scenario, Travelers has controlled master program options that are designed to create seamless worldwide protection for the foreign exposures of UK-based technology companies. We also offer customised local policies that comply with an individual country’s insurance requirements. They ensure that tech clients aren’t inadvertently exposing their business to expenses and disruptions due to misperceptions about their cover.
2. Protection at home and abroad. Today’s global marketplace means a tech company must be covered wherever it develops, makes, distributes and sells its products. If, for example, a product that the company sells overseas allegedly fails to perform as intended, causing a fire that destroys a customer’s commercial building in another country, having coordinated foreign and domestic coverages can help protect the business, its employees and customers.
3. Single-policy option in Europe. If a tech company’s product were to injure people across several European countries, the coordination of claims across multiple jurisdictions could easily take significant time and energy. A Freedom of Service policy can combine general liability and property insurance under one policy, covering any combination of the European Economic Area member states. This approach can streamline cover and billing, as well as help reduce premiums.
4. International technology expertise. Tech companies are evolving continuously – and their cover must keep pace with the changes. As your tech clients expand their business overseas, they will need to understand what insurance cover is needed in foreign countries to make sure they are properly protected. At Travelers, our international specialists consult on product structure and risk analysis for technology companies with foreign operations or sales. This helps tech clients understand how to best protect their business as it changes.
5. International Network of Insurance (INI) membership. Any tech company planning to expand operations in new countries must make sure their existing cover will apply in those jurisdictions, and that they are getting guidance from people who understand the risk of operating there. Working with an insurer that has partnerships with trusted insurers around the world can help.
That’s why Travelers is a member of INI, a global network of more than 120 insurance companies. Membership in this network allows us to coordinate underwriting, claims and risk control services through local providers in the country where an insured is operating. Our clients gain the dual benefits of accessing local expertise and knowing we are also making sure they receive the information and assistance they need when securing cover, managing current business risks or resolving a claim.
Mind the gap
In the past couple of years, running a technology company has become more complex as business leaders have had to manage constantly shifting dynamics – both internally and externally. Those dynamics are all the more complicated when a business operates on a global scale. Risks related to overseas operations, sales and employee travel can generate significant costs and disruptions. You can help ensure your clients are aware of any gaps in their cover and have suitable protections against their risks. By doing so, you will empower them to seize the new opportunities for growth that global markets can provide.