Workers Compensation Insurance – Foreign Travel Coverage

Confused about how to provide workers compensation coverage for your employees when they travel outside the US? Ever wonder what happens when an executive officer of your company travels to a business meeting or your sales people call on accounts in foreign countries. Let’s take a look at how coverage can apply for this situation.

The standard Workers Compensation and Employers Liability Insurance Policy (WC 00 00 00) is made up of two separate parts as outlined in its name. Part One, Workers Compensation, has to do with state mandated coverage, providing compensation and benefits to injured workers as directed by state statute. Part Two, Employers Liability, will pay all sums that you legally must pay as damages for bodily injury to your employee because of a covered injury.

You’ll find in Part One of the policy there is no mention as to how it will respond to employees who are working either temporarily or permanently in foreign countries. It just doesn’t address the situation. However you’ll find in Part Two of the policy, the exclusion section, Item C 6 states: “…this insurance does not cover…bodily injury occurring outside the United States of America, its territories or possessions, and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries.”

So Part Two, Employers Liability Insurance, will apply while an employee is “temporarily” working outside the country. The problem is that “temporarily” is not defined in the policy! Does it mean one day, one week or how about one year? Maybe! In addition, individual state extraterritorial provisions must be considered. So at best it’s not very clear how a policy will respond. This creates potential gaps in coverage where an injured employee may or may not have coverage under the policy.

Here comes WC 00 03 11, a policy endorsement, to the rescue! This is the Voluntary Compensation and Employers Liability Coverage Endorsement. It extends Part One and Part Two coverage to an employers workers “temporarily” working outside the coverage territory. With this endorsement the same Part One coverage benefits that would apply for the employee under their states workers compensation law would be provided. This endorsement is great for providing temporary coverage while an employee is working, moving from state to state in this country. However, while it may also provide some coverage to those involved in foreign travel, it may not provide enough coverage and other options may need to be explored. Let me explain.

Even though workers compensation coverage is provided through the Voluntary Compensation and Employers Liability Coverage Endorsement it’s still limited to providing benefits equal to those found in the employers primary state’s statutes. Without modification it does not provide coverage or reimbursement of cost for:

  • Endemic Diseases 
  • and Repatriation Expenses.

These two items can be extremely costly! Endemic diseases are defined as those diseases indigenous to a particular country, use your imagination! Repatriation expenses are those expenses related to transporting an injured employee back to this country for treatment.

The solution is to request a modification of the standard endorsement to include these items. Most of the times this can be accomplished by a special manuscript endorsement, that’s where the underwriter actually creates the policy endorsement to include these items.

As a final and actually best option, an employer may secure a Foreign Workers Compensation Policy. Broader in coverage, you’ll find many times these policies provide 24 hour coverage for employees. These types of policies will typically fill the coverage gaps. However, they are pretty special and not many insurance companies provide these types of policies.

If you have employees traveling outside the coverage territory or who travel to foreign countries, make sure you talk to your insurance agent! Make sure you have the coverage you need for your employees!

Hope this helps you out!