Be sure your insurer understands your new operational configuration and has solutions within at least the same boundaries as before you outsourced. You will need to consider all outsourced services as branches of your own offices and operations. Coverage for each function should be analyzed and insured by you if not by your outsourced service provider.
With the economy in turmoil, businesses are looking for every means of survival. While assuming additional risk is a common practice during economic downturns, this current global crisis is responding to risk ultra-cautiously. Many view those people who played fast and loose with risk as primarily responsible for our economic woes.
Thus, you need all the more caution with risk for survival and ultimate success.
But how does that work with operational dollars stretched so thin? Let’s look at issues involving risk transfer and how it might draw added value toward you and your products.
- Liabilities assumed with your product should always be transferred! Be sure that you are not only covered for your US sales, but also your global product distribution is insured for product failure causing injury or damage.
- Beware of the language “Coverage is global for suits first brought in the United States,” which will not respond if someone brings suit against you in a foreign court.
- Shipments FOB your loading dock still need to have transit coverage in place for the circumstances where your customer has not placed coverage and refuses to pay you for a damaged or lost (undelivered) shipment.
- Be careful to understand standard exclusions for aircraft-related products, hazardous material, and financial injury due to faulty products. You can secure coverage for risks at reasonable prices. These are not risks you want to overlook.
- Use the expertise of your insurance professional, accountant, and attorney to help you minimize risk to maximize value. Each perspective can help you assess and manage exposures to identifiable loss potential.