Exclusively from Foa & Son
As our economy becomes increasingly globalized more businesses are seeking opportunities outside U.S. borders. This leads to instances of U.S. based executives or employees engaging in business travel to, and occasional lengthier assignments in, foreign destinations. Your folks are normally covered by your workers compensation policy if they suffer a work injury anywhere here in the U.S., but what happens when they are hurt outside our borders? If they suffer an injury on such a trip, what coverage can apply in this situation?
Your standard Workers Compensation and Employers Liability Insurance Policy has two parts, as its name suggests. Part One, Workers Compensation, provides compensation and benefits to injured workers as directed by the workers compensation statutes of the state of jurisdiction. Part Two, Employers Liability, will pay all sums that you legally must pay as damages for bodily injury to your employee because of a covered injury arising out of an employment relationship.
Part One says it will pay workers compensation benefits according to statute; it doesn’t address foreign exposures at all. However you’ll find in Part Two of the policy an exclusion that states: “…this insurance does not cover… bodily injury occurring outside the United States of America, its territories or possessions, and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries.”
So Part Two, Employers Liability, will apply while an employee is “temporarily” working outside the country, although “temporarily” is not defined in the policy, leaving some uncertainty. In addition, for Part One individual state statutory extraterritorial provisions must be considered. Put all this together and it’s not very clear how a policy will respond to injuries to employees occurring outside the U.S., creating uncertainty and potential gaps in coverage where an injured employee may or may not have coverage under the policy.
There is another problem to consider. Work injuries occurring outside the U.S. create additional financial risk not covered by standard workers compensation policies. Examples:
Repatriation Expenses: An employee is seriously injured overseas; after initial treatment they’ll need lengthy hospitalization and treatment. Getting them home isn’t easy or cheap; a seriously injured person can’t just hobble down to the airport and buy a ticket on the next flight out. Costs to bring a seriously injured employee home can be very expensive.
Endemic diseases: These are defined as those diseases indigenous to a particular country. If foreign travel is limited to western Europe and a few other English speaking countries this may not be an issue, but for almost anywhere else in the world it should be a concern.
These two items can potentially be extremely costly, and are not covered by a standard unmodified workers compensation policy. The solution is to request an endorsement to your policy to cover these items. This makes sense if foreign travel is limited to only a few employees and only a few weeks a year. If it exceeds that, another, better option would be to obtain a Foreign Workers Compensation Policy. Broader in coverage than standard domestic policies, you’ll find many times these policies provide 24 hour coverage for traveling employees. Other enhancements might also be found. One popular one pays for the spouse or other family members of an injured employee to travel to the country where the injury occurs to be with the injured employee in cases where transport home may not be possible due to the serious nature of an injury or illness.
If you have employees traveling outside your normal state(s) of operation, or who travel to foreign countries, please give us a call. Whether by endorsement to your current policy or through a separate policy, we can find a solution to make sure you have the coverage you need for your employees.