Check these insurances when doing international business

Most insurances are not mandatory, but they are sensible. Find out which risks you run and whether you already have insurance for these. Preferably with foreign cover. These 10 insurances cover your risks when doing international business.

1. Cargo insurance

International transport comes with extra costs and risks. During transport to and from abroad, your goods may be damaged. Or they get lost. Transporters are not routinely responsible for these damages. Consider cargo insurance. Whether you take it out yourself or your customer depends on the Incoterms® you agree on.

2. Business liability insurance (AVB)

Business liability insurance (AVB) covers the damage you, your products, or your employees cause to others. Suppose you knock over an expensive vase at a customer's house. Or there is glass in the jam you delivered. This damage is covered by your business liability insurance. Check whether the insurance you have also provides cover abroad. When you do business internationally, you work with several customers or suppliers. You buy or sell more products. With more products, the likelihood of problems increases. Your risk increases.

3. Product liability insurance

Product liability insurance is often part of your business liability insurance. You can also take out separate product liability insurance. A separate or more comprehensive policy is sometimes necessary. For example, if you sell high-risk products such as toys with small parts. Talk to your insurer about what is most sensible. This way you can be sure you have sufficient cover.

When buying and selling within the EU, products must meet product requirements. You are only allowed to sell safe products. Perhaps your customer suffers damage while using your product. You can claim this damage back via your insurance. The rules for product liability for imports within the EU are different from those for imports from outside the EU.

Product requirements inside the EU

Inside the EU, products must meet product requirements. You are only allowed to sell safe products. In some cases, you can reclaim the damages from your insurance if someone suffers damage due to your product.  The rules for product liability when you import from inside the EU are different from the rules when you import from outside the EU. 

Liability for imports within the EU

If you import products from an EU country, the product liability lies with the producer. If you bought the jam with glass in it in Italy, your Italian supplier is liable. Do you sell products to other EU countries? Then you are liable for product damage. 

Different rules for imports from outside the EU

If you import products from outside the EU, you are the producer from the point of view of the law. You and your business bring the product onto the EU market for the first time. This makes you liable as the producer for damage caused by a fault on the product. This liability only applies to importers. Commercial agents are not liable for damaged products.

Export product liability

Insurance companies are cautious about taking out product liability insurance when exporting to certain countries. For countries like Canada or the United States, for example. Do you want to cover this risk? Then check your policy conditions to see if your insurance provides cover abroad.

 4. Hedging currency risks

Customers sometimes want to pay in a currency other than euros. Or suppliers ask for it. This happens especially when doing business with countries outside the EU. The exchange rate of that foreign currency sometimes changes. For example, between the time you make the price quotation and the time you send and pay the invoice. This currency fluctuation affects your business.

Are you not allowed to pay in euros? And you do not want to run a risk? Then hedge the currency risk. With a currency option, for example. With this right, you buy foreign currency at a predetermined rate. You pay a premium for this right. Discuss the best solution for your situation with your bank.

5. Credit insurance

Do you deliver products on invoice? Then your customer will only pay after receiving the goods and invoice. If your customer does not pay invoices, credit insurance will help. You take out this insurance with a bank or insurance company. You will then receive the money from your insurer if your customer does not pay.

Sometimes credit insurance is only for customers in the Netherlands. If you do a lot of business with customers from one or several countries, you can take out credit insurance per country. Dutch insurers or independent advisers will tell you more about this.

Export credit insurance

Banks and insurers sometimes do not offer insurance against customers who do not pay. For instance, if large amounts are involved. Or for projects with a long lead time. Then check out the Dutch government's export credit insurance. If you do international business, the government will compensate your losses. There are conditions attached to this insurance. For example, you must have a business in the Netherlands.

Export credit insurance is also called an exporter's policy. You apply for this at Atradius Dutch State Business (ADSB). ADSB issues this insurance on behalf of the Dutch government.

6. Social security

Are you working outside the Netherlands temporarily? And do you want to stay covered under social insurance in the Netherlands? In that case, you should apply for an A1 certificate. You will only get such a certificate if you are going to work in another EU, EEA, or treaty country. You can apply for the certificate from the Social Insurance Bank (SVB). This is free of charge.

For some countries, you will always need an A1 certificate. For example, if you normally work in the Netherlands and are temporarily doing construction work in Germany. If the construction site is inspected and you do not have an A1 certificate, you risk a fine from the German labour inspectorate.

7. Professional indemnity insurance (BAV)

Maybe you make a mistake during your work. Or one of your employees does. If so, your business will be responsible for any resulting damage. Think of giving the wrong advice. Or making a wrong design. Your foreign customer or client suffered financial damage as a result. This damage is not covered by your business liability insurance (AVB). You cover it with professional indemnity insurance (BAV). 

For some professional groups, professional indemnity insurance is compulsory. For example, for financial advisers, architects, and accountants. If you advise other businesses or deliver parts in large projects, a BAV is useful.

8. Business legal expenses insurance

Sometimes you may have problems with foreign customers or suppliers. For example, because you are not satisfied with the quality of the products. Your supplier does demand payment. Business legal expenses insurance insures you against the costs of legal assistance. Think of costs for legal advice, a lawyer, or litigation. This insurance only covers social assistance and not the amount of damages. You can claim damages through your business liability insurance.

Note: Most insurance companies do not insure disputes with foreign parties as standard.

9. Healthcare insurance

Basic healthcare insurance is compulsory in the Netherlands. Also for entrepreneurs. Suppose you break a leg while working abroad and end up in hospital. Your Dutch healthcare insurance will not automatically cover the costs.

Apply for a free European Health Insurance Card (EHIC) from your health insurer. With this card, you will receive essential medical care in many countries. This is the case in countries of the EU, Iceland, Liechtenstein, Norway, and Switzerland. Do you want more information about the EHIC card? Then check out the information on the VisaGuide website.

Does your Dutch health insurance offer insufficient cover abroad? Then take out international health insurance for your temporary stay abroad.

10. Car insurance

Third-party insurance (WA-verzekering) is mandatory when using a motor vehicle in the name of your business. For example, a car or van. This is stated in the Third-party Motor Insurance Liability Act (WAM). This insures your liability in traffic.

You take out third-party insurance for your company car in the name of your company. Apart from this compulsory insurance, you can take out additional insurance. Think about passenger insurance or WA+. With WA+, you also insure damage to your own car.

Most third-party insurance policies also cover damage abroad. When taking out car insurance, you will receive a green card from your insurance company. With this you can prove internationally that your car is insured. This card shows in which countries you have third-party cover.

Do you take tools abroad in your company car? Or products? These usually fall outside your car insurance. You can recover damage to these items through your business liability insurance.

Another country sometimes has requirements for your car insurance. In the United Kingdom, for instance, you need at least third-party insurance. This insurance is similar to the Dutch WA insurance.