As companies deploy their operations across the globe, it may seem that the world is a smaller place. But the risks that businesses and their employees face are perhaps larger than ever before.
Many employers believe that the insurance coverage they have in place will provide their overseas employees with ample protection. But if you consider the day-to-day realities of terrorist attacks, acts of war and other catastrophic events and their impact on employees traveling and working oversees, it seems apparent the coverage provided isn't nearly enough. In some instances, employers may even be placing these employees at risk without knowing it.
In the United States, many employers simply attach an accidental death and dismemberment rider onto an existing group life program. While this may be easy administratively, it could have negative effects on employees assigned overseas or in the event of a catastrophic loss.
When faced with a medical emergency, war, terrorism or other catastrophic exposure, as an employer you must be certain that you can respond to employees' needs. Securing a stand-alone accidental death and dismemberment program can help assure that employees are adequately protected.
But simply purchasing an AD&D policy may not be enough. Every AD&D program is highly complex and must be customized to the particular needs of the company it protects.
Many insurers specifically exclude war and terrorism exposures. War risk is a highly complex exposure requiring specialized knowledge to protect employees working in volatile regions. War-risk losses tend to have low frequency, but very high severity.
Other exclusions must also be carefully scrutinized to make certain employees are covered from all types of attacks including nuclear, chemical, radiological and biological.
A special concern arises for employees working or traveling overseas who may--unbeknownst to you and to them--face significant gaps in their insurance coverage. Many organizations are not aware that the coverage they have purchased does not adequately cover the situations their employees face.
For example, if your organization has war-risk cover, the insurance carrier might exclude certain components, such as a particular geographic region, that are essential to protecting your employees. An additional concern is whether your expatriate, foreign national and other employee groups are protected or excluded based upon job responsibilities or other criteria.
In addition to the stand-alone coverage for accidental death and dismemberment, a meaningful program will offer a suite of services including medical assistance and catastrophic response capabilities. A large-scale disaster could be devastating for employees and the employer's ongoing operations. However, the life or death consequences of a disaster often may be lessened by an intelligent, timely crisis response.
Finally, the financial strength of an insurer is always a consideration in managing risks. It is particularly important for AD&D, where losses can be highly unpredictable and catastrophic. This volatility requires an AD&D insurer with the financial strength to absorb sudden shocks and a demonstrated ability to manage accumulated exposures. Insurers lacking these capabilities can leave an employer vulnerable at a time when coverage is needed most.
STEPHEN MUELLER is senior vice president of sales and business development at Zurich's Accident & Health group.
September 15, 2005
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