At a glance
- Not every country does things the same way and, for businesses operating abroad, it pays to be aware of local operating conditions that can vastly differ around the world
- Falling foul of these international laws can mean stiff financial penalties, or even criminal sanctions
- Zurich can help brokers acquire the knowledge to keep their clients safe from such dangers
Be careful out there. As the world gets smaller and businesses are increasingly meshed with suppliers and markets far away from their headquarters, some directors are finding out to their cost that not everyone does things the same way.
In an era where everyone seems to wear the same brand of jeans and crave the same electronic products, it’s easy to forget that specific, local operating conditions can differ vastly around the world – and brokers need to be helping their clients acquire the knowledge necessary to stay safe.
“For example, I deal with a lot of South American business and there are significant exposures out there that many firms just aren’t aware of,” says Mark Dowsing, Senior Claims Adjuster and Solicitor at Zurich. “In particular, there are government quangos designed to ensure that directors don’t breach their duties – and the standard is very high.
“If there is a merger and the shareholders aren’t happy, they make a claim. These claims are on the rise. It’s costing everyone a lot of money.”
Dangers of storing and collecting customer data
But it’s not just physical assets that can create a major exposure. The internet has certainly brought many opportunities, but storing and collecting customer data overseas can be a serious risk. Different countries have different rules and sometimes widely varying concepts of what constitutes ‘privacy’. If you are hacked – and let’s face it, if the CIA can be hit, the likelihood is that you will be – directors can find themselves in front of a judge.
It’s also vital your clients pay attention to who is doing what at every level of operations. Just because you subcontract out your sales team, doesn’t mean that Bribery Act investigators won’t come knocking if your representative has acted corruptly.
In a similar way, it’s also vital to remember that while companies may think in terms of a borderless, regional presence, national differences still matter. It is all too easy to fall foul of sanctions regimes two or three tiers down your sales or supply chain.
There is certainly a lot to think about and the risk profile is constantly developing. And it’s all the more reason why brokers need to be aware of what’s happening around the world and educate their clients accordingly
Mark Dowsing, Senior Claims Adjuster and Solicitor at Zurich
For example, if a UK manufacturer sells to a French firm, who in turn, sells the product on to Iran, the UK company could still be in breach of EU sanctions and have all their assets frozen, as well as be the subject of a global investigation. New rounds of sanctions against Russia further complicate an already difficult situation – but ignorance is no excuse.
“There is certainly a lot to think about and the risk profile is constantly developing,” says Mark. “And it’s all the more reason why brokers need to be aware of what’s happening around the world and educate their clients accordingly.
“My advice is to have a conversation with them in your first meeting together; give them a ready reckoner. Give them a list of things to do to avoid a claim.
“It sounds quite simple, but it’s the sort of thing that can make a real difference. Explain to them relevant compliance measures and provide some practical examples of what they can do in terms of risk management. Look to your insurer for support in doing this, as any good provider will have access to useful information and advice.”
And as with any foreign travel – even if the object travelling is only cargo or data – it pays to know what political, environmental and social changes are occurring in your chosen destination.