Even before the COVID-19 pandemic, international travel and deployment represented a major source of risk for nonprofits.

Travel can mean a three-day business trip or a long-term assignment in-country. But no matter the circumstances, international programming can involve medical crises, natural disasters and security issues, not to mention property damage, civil liabilities and even political risks such as confiscation and expropriation.

Consider these real-life examples:

  • A donor broke a leg while traveling to observe her charity’s operations in a remote area of Southeast Asia and had to be airlifted to a medical facility in another country.
  • A child in a sub-Saharan village dashed in front a car driven by a nonprofit worker, killing the child.
  • A participant in a Latin American study was abducted, driven to a series of ATMs and forced at gunpoint to drain his bank account.

The basics: A foreign package insurance policy

International insurance complements domestic placements that provide protection only within the United States, its territories and possessions, Puerto Rico and Canada.

A foreign package policy allows the buyers to select the types of protection they need within a single contract.

Core coverage options include:

  • Foreign property liability: This insures against direct physical loss or damage to tangible property abroad, as well as extra expenses and loss of income during repair or replacement.
  • Foreign general liability: This covers civil liability for bodily and property damage claims abroad.
  • Foreign auto liability: This insures against civil liability for vehicular injury or damage claims abroad (usually excess of local insurance applicable to the vehicle).
  • Foreign employer’s responsibility liability: This covers medical, wage loss and other costs of occupational injuries abroad and medically necessary services, such as evacuation and repatriation. NGOs contracting with federal government agencies may be required to address this exposure through Defense Base Act (DBA) insurance, typically sold as a stand-alone placement.
  • Business travel accident liability: This insures against accidental death or catastrophic injury to business travelers.

Finding the right structural option

In addition to a foreign package policy, nonprofits with business units registered in other nations must comply with local regulations. These regulations may require types of insurance that need to be insured domestically.

There are two structural model options to satisfy these requirements: an unbundled global program and a controlled master program.

An unbundled global program consists of local insurance placements from insurers domiciled in the host country, complemented by a foreign package policy arranged in the U.S. or elsewhere. Local policies can satisfy government requirements and provide access to an in-country insurer and broker policyholder service.

This program structure is ideal for an organization that prefers autonomy in local procurement but requires meticulous coordination between overseas operations, a nonprofit’s global headquarters and the organization’s international risk advisor.

A controlled master program combines a domestic foreign package policy and local admitted policies issued by country subsidiaries or affiliates of the same multinational insurer. Since global placements are yoked together within a single platform, it is designed to deliver cohesive protection, with streamlined administration and lower costs.

This structure is well suited to a highly centralized organization placing greater importance on control and buying leverage than on local relationships.

Contact your HUB Nonprofit expert for more information on insuring your nonprofit organization’s global mission.