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Workers’ Comp: Don’t Forget Overseas Workers

Test your workers’ compensation knowledge by taking the following quiz. The answers may scare you.

(1) A company engineer travels to Asia to visit your manufacturing plants. While there, he contracts malaria. Does your workers’ compensation policy cover it as a work-related illness?

The standard workers’ compensation policy typically provides only the coverage required by your home state’s regulations. State workers’ comp laws may not require coverage for diseases or death resulting from certain foreign exposures.

(2) A sales executive goes to Germany to open a branch office. On one of her days off, she injures her leg while skiing. Does your workers’ compensation coverage apply? How about your group medical? Group disability?

Your coverage may not apply to injuries or illnesses arising from personal side trips. Many group health and disability plans also have territorial limitations.

(3) If your workers’ compensation policy doesn’t cover the two situations above, does your company have protection if the worker files suit?

The employer’s liability portion of your standard policy may limit your coverage and legal defense for events occurring or claims brought outside the U.S.

The Problem of Insuring Overseas Workers

If you have workers who travel overseas, coverage gaps and ambiguous definition in your standard workers’ comp policy could result in costly and lengthy coverage disputes. Moreover, you can’t rely on workers’ compensation systems in countries where your workers are assigned benefits vary from country to country, often providing more modest benefits than U.S. workers expect.

You can cover your short-term overseas workers by buying a voluntary foreign workers’ comp policy, which will pay benefits in accordance with the workers’ comp law in the designated U.S. state of hire.

Foreign voluntary workers’ comp policies also provide valuable extra benefits:

• Repatriation expense, or the cost of bringing an ill or injured worker back to the U.S. for treatment, plus funeral expenses and transport to the U.S. if a worker dies on foreign soil from injury or disease.
• Endemic disease: Viruses, bacteria and microorganisms in the water, air and food in other countries can cause diseases not found in the United States, such as malaria and yellow fever. The coverage defines endemic disease, however contracted, as occupational.
• 24-hour coverage: Many international insurers recognize that individuals travel or take small vacations when overseas for work. Chubb, for example, insures employees on a 24-hour basis while overseas on a short-term basis. Once an overseas assignment becomes “long-term,” Chubb’s policy reverts to a typical, employment-based model, covering employees for work-related injuries only. However, the 24-hour coverage continues protecting long-term overseas employees when they travel to other countries for short-term business trips.

Foreign voluntary workers’ compensation policies are non-standard, so you can request a variety of coverages. For example, the policy can cover illnesses and injuries occurring in other countries — just as you would add “other states” coverage on your domestic workers’ comp policy — so that a side trip to another country won’t require you to notify the insurer first. You may also write the policy to allow employees to opt into workers’ comp benefits in other countries if they are more generous than your state’s.

If you’re contemplating sending workers overseas regularly or for extended time periods, make sure you have the appropriate coverage — and work with a broker who is familiar with insuring overseas exposures. 

riskVue | The webzine for risk management professionals
February 2004