1. January 24, 2014March 9, 2006 1 A Foreign Concept: International Insurance

2. 2 January 24, 2014 Agenda: Assessing International Exposure International Package Policy Overview Mistakes and Misconceptions Speaking the Foreign Lingo… Questions & Answer Session

3. 3 January 24, 2014 Facts & Figures…. $40.4 = export merchandise shipped 2006 (6 th among the states in this category) 2002 to 2006 merchandise exports for Michigan increased $6.6 billion (20%). MI recorded the 13 th largest growth in exports among the 50 states. MI exported to 195 foreign destinations in 2006. Largest market(s) = Canada ($23.8B), Mexico ($4.7B), Germany ($1.2B) Other Top Markets: Japan, China, United Kingdom, Venezuela, Austria, France and South Korea. Of MIs 30 biggest markets, exports to Iraq grew fastest over 2002-2006 Surging from 45k to118m or 263,000% Exports: Russia (up 674%). China (up 257%), Venezuela (up 186%)

4. 4 January 24, 2014 What is being Exported? Manufactured Goods (97% of all exports) Transportation Equipment ($21.2B, 52%) Machinery Manufactures ($4.1B) Chemical Manufacturers ($3.2B) Primary Metal Manufactures ($1.9B) Computers and Electronic Equipment ($1.5B) Fastest Growing Manufactured Exports Transportation Equipment 2002-2006 grew $1.6B *Information provided by the State Export-Related Employment Project, International Trade Administration, Bureau of Economic Analysis, Origin of Movement State Export Series, and Bureau of the Census. Does not include statistics on products related to non-manufacturing sectors.

5. 5 January 24, 2014 We live in a Global Economy! International Trade now accounts for 1/3 of the GDP in the USA. Companies that are managed in the U.S, can be sued in the U.S., no matter where the complaint occurs or where the product is manufactured.

6. 6 January 24, 2014 What can really go wrong? Employee travel Sickness, Injury, Death Occupational and Non-Occupational Injury/Illness Car Accident(s)/Violations Injury, Imprisonment, Fines GL Exposure Bodily Injury, Products Liability, Premises Legal Damage Kidnapping, Property Damage, Cargo Theft, Extortion Linguistic and cultural differences; Theft or lost documents

7. 7 January 24, 2014 Knowledge is Power! Most every U.S. company has some foreign exposure(s): Trip Travel Importing/Exporting/Licensing/Franchising Foreign operations/Subsidiaries/Joint Ventures Strategic Growth and Acquisition Dont assume its covered or that it doesnt exist.

8. 8 January 24, 2014 Assess Your Exposure Do you have overseas sales? Do you have employees traveling abroad? Do you exhibit or participate in Trade Shows overseas? Do you work on any military bases abroad? Do you have facilities overseas? Do you have employees living abroad? Do you rent or own cars overseas? Do you export goods outside of the USA? Do you sponsor trips, tours or study groups abroad?

9. 9 January 24, 2014 If you answered YES to any of these questions, then you need International Insurance Coverage!

10. 10 January 24, 2014 Foreign Commercial General Liability Foreign Auto Liability Foreign Voluntary Workers Compensation & Employers Liability Travel Accident & Sickness Real & Personal Property Insurance Kidnap & Ransom, Extortion Marine Cargo Political Risk Crime An International Package Program:

11. 11 January 24, 2014 Advantages of a Package Policy Nine lines of coverage One Underwriter One Premium One Policy One Invoice Ease of Doing Business Can include local coverage for foreign operations

12. 12 January 24, 2014 Mistake #1: Domestic GL will respond… Product manufactured in U.S. is used in a finished product in Italy. Finished product causes injury to Italian child, whose family seeks damages from Italian and U.S. company. Lawsuit filed in Italian court is not covered under U.S. firms GL policy.

13. 13 January 24, 2014 Mistake #2: U.S. Work Comp insurance will cover it… U.S employee is working temporarily in India and contracts Cholera. The employee is treated overseas and returns home seeking further treatment. Bills are denied as there is no coverage for Endemic Disease under the employees domestic workers compensation plan.

14. 14 January 24, 2014 Endemic Disease Noun 1. A disease that is constantly present to a greater or lesser degree in people of a certain class or in people living in a particular location. Source: WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved.WordNet 1.7.1 Examples: Hepatitis B, Typhoid, Malaria, Typhus Fever, Lassa Fever, Measles (U.S.)

15. 15 January 24, 2014 Mistake #3: No need to buy additional AD&D and Medical Expense Insurance. Employee travels to China for work. Employee becomes sick, is treated at a local hospital and pays bill with personal credit card. Back home, employees medical carrier refuses reimbursement for extra-territorial medical treatment.

16. 16 January 24, 2014 Mistake #4: Dont need to worry about insurance for foreign employees. A British citizen is working in Brazil for a U.S-based employer. The British employee slips and falls on stairs at a restaurant, spraining their ankle and wrist. Worker is taken to a local hospital, but has no coverage under the British national health plan.

17. 17 January 24, 2014 Mistake #5: Easy to replace stolen or lost documents, money et al. Employee travels to Hong Kong and has his briefcase stolen at the airport while gathering his luggage. All his money, identification and credit cards are inside. He does not understand Cantonese or Mandarin and does not know how to place an international phone call.

18. 18 January 24, 2014 Valuable Program Benefit = Emergency Assistance Services Provide fast, life-saving help in an emergency Make international travel less troublesome Toll free or Collect (24 hr/7 days/365 days) English speaking assistance Proactive and Reactive resource for international travel Services; Not insurance!

19. 19 January 24, 2014 Travel Assistance Services: Lost Documents Lost Personal Effects Embassy Information Security Evacuation Language Interpretation Legal Referrals Emergency Messages Emergency Travel Services Weather Currency Rates Bail Bonds Emergency cash

20. 20 January 24, 2014 Medical Assist Services: Hospital Guarantee/Coordination Immunization Medical Record Storage Medical Transport Repatriation of Mortal Remains Medical Referrals Emergency Medication

21. 21 January 24, 2014 Speaking the Foreign Lingo… Expatriate (Expat) A US National that is living and working abroad. Third Country National (TCN) A foreign national working in a foreign country (i.e. an Australian working in France) Local National (LN) A person who lives and works within their own country (i.e. a Chinese person working for a US owned or affiliated operation in China) Foreign Voluntary Workers Compensation (FVWC) Provides voluntary, not mandatory, US workers compensation benefits as well as standard foreign extensions, such as excess repatriation expense and endemic disease coverage; normally 24/7 coverage for trip travel.

22. 22 January 24, 2014 Foreign Lingo continued… Foreign Auto Always on an excess basis over statutory limits; clearly not a substitute for local compulsory coverage. DIC/DIL Difference in Conditions, Difference in Limits; fills the inconsistencies and brings the firms insurance program up to a certain uniformity (US Market Standard) of coverages and limits. Repatriation Returning Home as a result of accidental injury or illness.

23. 23 January 24, 2014 More Foreign Lingo… Controlled Master Program (CMP) A coordinated multinational insurance program under which coverage terms and pricing are centrally negotiated. Admitted Coverage Signifies that the insurance company is authorized (licensed) to conduct insurance business in the country where the insured has operations. Non-Admitted Coverage Coverage written or issued by an insurer that is not licensed or authorized in the country where the risk is located.

24. 24 January 24, 2014 Final Thought: The landscape of doing business has changed; so too, should your approach towards your business and insurance needs.