In today’s business landscape, if you’re expanding, you have company. Many businesses are expanding their operations beyond Canadian borders to remain competitive and drive growth. In fact, Tim Horton’s recently announced that they plan on opening 1,500 new stores in China. But, with expansion overseas comes the need for an adequate, comprehensive and legally compliant insurance solution. That’s where RSA’s GSL Specialty team can really show its value. Our specialized underwriters, risk engineers and our claims specialists ensure that Canadian entities with international operations are protected abroad the same way they are at home.
The Multinational Solution
Any large multinational company (MNC) with global operations or plans to expand globally should have an insurance partner that can match its global footprint, to ensure that the company is adequately covered in its foreign markets. This is especially important in complex and highly regulated countries such as China, India and Brazil. RSA’s global network reaches more than 150 countries, offering comprehensive protection for MNCs across the globe.
Canadian-issued policies, which becomes the Master Policy, ensures that Canadian operations abroad are insured locally to the same level as if they were insured at home. Otherwise, MNCs would have to rely on local offices in each country they’ve expanded into to arrange coverage independently, which could complicate things if important exposures of the client’s business are not insured adequately. By purchasing coverage with a global insurer in Canada, there is consistency in coverage and a uniform standard of claims handling and risk management no matter which country the company is operating in.
“In situations where a multinational solution is not purchased, an MNC may be unpleasantly surprised to learn adequate insurance was not in place both pre and post loss,” explains Vangie Artes, Underwriting Director, Multinational and Global Risk at RSA Canada. “The client’s local business operations may be adversely impacted when the out-of-territory or non-admitted insurance is unacceptable to local regulators and third parties. There had been several cases in the recent past that large MNCs were fined for tax avoidance simply because of improper cover provided within their multinational program.”
As a result, it is critical to ensure that the client’s multinational solution is compliant with the local regulations in which they are operating. Inadvertent breach of these laws or regulations might render the insurance contract illegal or unenforceable which could leave the company suddenly “uninsured.” To ensure this doesn’t happen, RSA’s global network specialists, who are familiar with local statutory requirements and government regulations, ensure that the MNC’s policy meets all the local regulatory requirements in those countries.
Brokers have a critical role to play in helping clients purchase a multinational insurance solution for their operations that is adequate and compliant. In cases where an existing overseas operation does not have adequate coverage on a centrally purchased multinational solution, brokers would help identify those gaps and propose a solution to ensure that coverage is adequate for the MNC’s global network.
According to Artes, brokers and their clients can satisfy the following three key takeaways by purchasing a centrally controlled multinational program with a Canadian-based insurer:
- Capability: Brokers and Risk managers should be looking for a global insurer that can provide multinational solutions anywhere in the world and support their clients through areas of potential complexities such as local policy compliance, tax payment and claims handling
- Compliance: Many international markets require global market policies to be locally compliant. Thus, a local policy should take into consideration the local regulatory and tax implications of all countries involved.
- Consistency: As the client controls insurance purchases, the coverage, claims handling and risk management are held to a uniform standard to ensure consistency in all markets.
While many insurers might only issue policies in Canada and the US, larger insurers with a multinational network such as RSA Canada are ideal partners when issuing multinational policies. To learn more, visit rsabroker.ca/gsl.