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How is my insurance affected if I import or export products?

If your business is considering importing and exporting products it is extremely important to understand how your company’s insurance may be affected. Depending upon the product the countries with which you are doing business and the methods by which you are transporting goods you may open yourself up to increased liability exposure. Speaking to your insurance broker can help you better comprehend the overall picture when it comes to the impact of importing and exporting products as far as your commercial insurance policy is concerned. Here are just a few things you should keep in mind.

Regulatory Restrictions

First off you want to check and see if there are any restrictions that will affect your business. Are certain products prohibited? Do you need to obtain permits for the goods which are being transported? Do the products comply with labelling requirements? These may seem fairly basic questions but you definitely don’t want to get involved in an importing/exporting endeavour without knowing if it is even allowable within your territory and if there are any conditions or regulations.

Territory Restrictions

Each insurance policy has territory restrictions. If you operate outside of your home province or internationally your insurance company needs to know. This allows them to properly assess the risk and ensure that they are prepared should there be a claim. For example litigation must take place in Canada so your insurance company needs to be aware if you operate outside of the country. The scope of your operations will determine what policy and protections you need and therefore your premium.

In the Event of a Loss Can You Pursue Subrogation?

Subrogation is the means by which an insurance company can recover money it has paid out to its insured by bringing an action against a third party in the insured’s name. In deciding whether or not to pursue subrogation the insurer will look at such factors as who last had access to the goods by whom were they manufactured who was the supplier among other aspects.  With exports and imports this gets a bit trickier. The question of jurisdiction can become cloudy. Not to mention the actual process of litigation involving another nation can certainly be quite time-consuming and difficult to navigate. Again touch base with your insurance broker to find out what their policy is in terms of exporting/importing and subrogation.

What Type of Product are You Dealing With?

The actual product that is involved in these types of transactions is in and of itself important to your insurer. For instance products that directly impact health and wellness such as foods pharmaceuticals and other such related items may require more paperwork. Other products that deal with security issues such as weapons and various chemicals may require even more red tape. These kind of items are generally considered to be higher risk and may not be covered by your policy. Thus it is incredibly important to touch base with your insurance company first to see what exactly your import/export project is going to entail.

The best resource is to talk to your insurance broker about your options. They’ll be able to guide you in the right direction so that you can have the policy the fits you and your business.