As organizations continue to expand and evolve, cross-border business is becoming more of a reality for growth-minded companies. And while there are numerous benefits to growing internationally, there’s also some challenges that companies should prepare themselves for before making that leap.
Antonella Lucifero, underwriting manager at CNA Canada, told Insurance Business that this really begins with selecting the right insurance partner – namely one that understands the vastly differing labour laws.
“One of the main challenges when expanding to, or operating in the US from Canada is navigating the different legal environments and insurance ensuring compliance with the states,” she told IB. “The US landscape is very different in that each state is unique and, depending on where the insured has operations, will each have different considerations, laws, forms and requirements.
“One of the unique differences between Canada and the US is the workers’ compensation coverage, which is covered through private insurance in most states. In Canada, [however] it’s provincially managed. This is a US compulsory coverage that we offer at CNA. [Again], each state has [certain] requirements – and failure to meet requirements can cause an insured to face penalties or fines.”
Furthermore, the US is home to a rather stringent, litigious environment. As such, before venturing into this new landscape, businesses need to take certain measures to ensure they can rise to meet these challenges.
“The New York Labour Law, for instance,” added Lucifero. “This law places financial responsibility for worker safety on parties best able to ensure compliance with applicable safety practices and any work related to a building or structure in the state of New York. There are multiple sections of the statute, however the most commonly known is the Labour Law Section 240 which is referred to as Scaffold Law. This section applies to accidents where a worker falls from an elevated height or is injured by an object falling from an elevated height while being hoisted or secured. It imposes strict liability or comparative negligence on the part of the injured worker - which is not a defense under this section of the labour law.”
Some ways businesses can prepare is to align with legal professionals, consultants and an international insurance carrier like CNA that can provide insight into these challenges. They can help mitigate against potential losses with effective risk management, ensuring risk transfer protocols and coverage requirements are in place. CNA Canada understands global placements, giving businesses that much needed support when venturing into the international space.
“Producing Canadian brokers can also work collaboratively with a US broker as a significant resource and advisor regarding specific coverages, policy forms and the overall marketplace in the US,” explained Lucifero. “They can alert the producing broker of the coverage needs and provide expertise around US specific requirements.”
CNA Canada offers a commercial suite of coverages applicable to international operations via the Oneworld+® product. They provide difference in conditions (DIC) and difference in limits (DIL) over local policies, a worldwide coverage territory and broad Named Insured which gives peace of mind to the insured that they would have equivalent coverage for their worldwide operations via the Master policy.
“CNA also has some additional coverages that are uniquely beneficial to clients with international operations and have employees travelling outside their domestic country for business purposes, such as Foreign Voluntary Workers’ Compensation and Foreign Excess Auto. We can also add travel assistance services via CNA Companion Services– these are some of the additional coverages and services that CNA Canada has to offer,” it was explained.
When it comes to selecting the right insurer, businesses could also profit by selecting one that also has international outreach.
“Working with an insurer that also has international operations themselves is advantageous to the insured because the company is better aligned to avoid delays and meet contractual insurance requirements,” said Lucifero. “For example, CNA Canada offers an already established network of partners and/or owned offices in over 165 countries, which enables us to issue admitted coverage wherever you do business.”
“[At CNA] we offer comprehensive insurance solutions for businesses operating worldwide. It’s a streamlined operation with one point of contact, handling and servicing the global program.”
Essentially, as Lucifero told IB, the aim is to help clients succeed in whatever their goals may be. This is something that is established at the very start of the business relationship – ensuring that each party feels supported and safe when expanding or growing their international arm.
“One way that we can help is to proactively engage with clients and ask about their short term versus long term business growth,” explained Lucifero. “Does that include expansion into the US or potential foreign countries? By asking brokers to engage with clients to understand their potential needs as they expand into the US or other foreign countries, they can better prepare and align themselves to meet those requirements.”
CNA was recognized as The Best Insurance Companies for Construction in Canada. Read the full report here.
