What should business owners be aware of when doing business in Europe?
There is the new Environmental Liability Directive (ELD), which places additional responsibility on potential polluters and environmental damages they may be responsible for. Traditionally, these damages were limited to pollution to water, including groundwater, or someone’s property, but the ELD takes it one step further and includes damages to the habitat. There could be lingering effects to a particular habitat — whether it’s a species of bird, animal or vegetation — that may take years to recover.
This places a higher burden on companies doing business in Europe to be careful of any possible environmental damages, particularly if they are dealing with materials that may potentially damage the environment. Insurance is one of the possible solutions to address this increased liability.
How does directors and officers liability insurance come into play when doing business internationally?
In terms of compliance, D&O liability insurance has traditionally been purchased at the corporate level. While it’s always intended to cover the directors and officers on a worldwide basis, there are various legal requirements in any given country that may prohibit the indemnification of a director or officer through a ‘nonadmitted’ policy.
The actual structuring or arranging of D&O liability insurance needs to be carefully managed to make sure it’s compliant with admitted insurance requirements and will respond to potential liabilities. Directors and officers can be held personally liable and their personal assets can be put at risk if this is not well managed.
How can business owners mitigate some of the risks associated with employee safety when doing business internationally?
There are a number of sources that contain information regarding the political environment and stability of a particular region. The U.S. State Department provides a list of danger hot spots and travel restrictions on its Web site, and this should be one of the first steps when considering travel abroad.
The theme is prevention. Business owners should avoid putting an employee in harm’s way. But, if there’s an absolute need to travel to one of those danger spots, proper insurance, such as kidnap and ransom coverage as well as advance security measures, should be in place to resolve and/or prevent problems that may arise.
Terrence Parks, CPA, is a senior account executive with Aon Global Client Network, part of Aon Risk Services Central Inc. Reach him at (248) 936-5268 or [email protected].
