Business insurance: 4 reasons why local is much better

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If we live abroad, we are well aware of the challenges we front while working. We might face more and more business risks: a local exposure can be better solved by a local solution.


Companies abroad come in many different types but are usually divided into two main categories.

Under the first one, we can find multinational firms with operations in different countries of the world.

To the second one belongs the largest group of SMEs, often family-run, present in a more delimited geographical area.

With reference to Eastern European countries such companies, although smaller than the international corporates, require however the involvement of local expert consultants who:

  1. advises the local management how to make safe company’s assets, personal properties and workers;
  2. informs on legislative and local regulations;
  3. prepares a plan for the prevention of emerging risks.

However, this is still not enough.

The SME firms abroad often conclude a local insurance in the country where they operate for business, commercial and managing reasons.

The benefits of local insurance in 4 points.

1. Tax advantages.

Within the Visegrad region, the taxation of corporate policies premiums, compared to Italy or Germany for instance, is very low or zero pair. The comparison of the different tax requirements, country by country, have been already described in this my post.

2. Compliance with local regulations.

Any company doing business abroad knows how much is important to adapt its own business and operations to the country’s legislation. A local insurance concluded locally, with local insurers, ensures the management company’s compliance with the standards Country’s regulations.

This applies especially when the managment shall be taken before a public body or a foreing court due to environmental damage, product defectaccidents at work.

3. Strengthening of commercial relations with customers and suppliers.

The local policy is useful for a third reason: it is possible that the company, upon the specific request of one or more business suppliers, needs a local insurance policy provided by an insurer fully authorised to operate exactely in the same Country where the firms is settled.

With reference to defective product exposure, a specific manufacturer (to which for example we sell our semi-finished product) shall ask us to increase the product liability limits to some millions euro as the exclusive condition for keeping the business relationships.

4. Quick settlement of claims.

Fourth advantage: all claims are handled locally. This allows the company to involve even legal local lawyers, who are familiar with the social-economic and legal context where the accident has occurred.

Buying a local insurance allows the company to dialogue -during the whole claim process-directly with the local closs adjusters, the local insurer, the trusted risk manager. In this way, unuseful translation expenses are easily reduced or totally avoided.

Last but not least, who benefits of the claim payment is not the mother HQ but the the local firm.


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