International business insurance: a guide to trading overseas

Trading overseas opens up new markets and revenue streams for your business. However, it can expose you to risks that your business insurance policies don’t cover. If you don’t revise your policy to cover overseas trading, it can leave you exposed to uninsured losses.

Updated: 08.05.26

By Phil Thorpe

For this reason, it’s vital to understand where your cover ends and where you need additional cover. This guide explains how different types of business insurance work, and how to make sure you’re fully covered – whether you’re shipping products to Europe, sending staff to the USA to close deals, or you have other activities taking place across borders.

Does my business insurance cover me abroad?

The short answer is often no, or only with strict limitations.

Most UK business insurance policies include “territorial limits”. These conditions typically restrict cover to the United Kingdom and, in some cases, the European Union (which does not include Switzerland). Once your business activities expand beyond these boundaries, your policy is unlikely to respond to claims.

It is particularly important to understand relevant export rules, regulations, risks, and restrictions before you start trading in a new territory. For example, government guidance for businesses that export goods from the UK suggests checking the duties and customs procedures for the relevant countries, applying for any necessary licences, correctly classifying your goods, and choosing who will make your customs declarations.

When it comes to insurance, a policy that protects you in the UK will offer limited or no protection abroad. Even if your policy wording does mention international cover, it’s important to check the details. Many policies exclude specific regions – most notably North America and sanctioned territories – due to higher litigation costs, larger damages awards, and political considerations. Other policies may provide limited cover for short business trips but offer none for goods in transit or permanent overseas operations.

The key is to review your existing policies carefully and, crucially, speak to a specialist insurance broker who understands international risk before you commit to any overseas venture.

Key international business insurance considerations:

When trading internationally, you’ll need to consider several distinct types of cover. Each addresses a specific risk and provides you with a strong safety net for your overseas operations.

1. Public and product liability

Public liability insurance covers claims if your business activities injure someone or damage their property. Product liability insurance comes into play if a product you make, supply or sell causes injury or damage after it’s left your control.

If someone or something gets injured or damaged overseas (such as in Germany or the USA, for example), you can be sued in the courts of that country, and those courts will apply their laws and award damages according to their standards.

Understanding this is important. While UK public and product liability policies generally include EU countries, they usually exclude what’s known as ‘North American Jurisdiction.’

This means that if you get sued in the United States or Canada, your insurer won’t cover your public or product liability claim. Given that compensation awards in US courts can run into millions of dollars, the costs can rise significantly.

If you export to the USA, Canada, or any other high-litigation territory, you must specifically extend your liability cover to include these jurisdictions. This often requires a specialist international liability policy with adequate limits, which may be far higher than those required for trading in the UK and the EU.

2. Marine cargo and transit insurance

Marine cargo insurance protects your goods in transit by sea, air, or road, from departure to arrival at their destination.

Understanding when you’re responsible for insuring goods during international shipment is vital. The Incoterms® rules, published by the International Chamber of Commerce, set out who arranges transport and insurance, and when the risk passes from the seller to the buyer. The details vary by term, so it’s worth checking which one you’re using to confirm who should insure the goods at each stage.

For example, terms that could apply to your shipments can include:

Ex works (EXW). The buyer assumes all risk from the moment the goods leave your warehouse.
Cost, insurance and freight (CIF). The seller arranges carriage and insurance to the named port, but the risk can pass earlier.
Delivered duty paid (DDP). The seller carries all risk until the final delivery at the buyer’s premises. This is often known as ‘door-to-door’ insurance cover.

This means that when you take out a marine cargo insurance product, it must be tailored to the client contract terms you are operating under. For example, if you sold products on CIF terms and you didn’t have appropriate cover, you could take a large financial hit if a container went overboard or a lorry was stolen.

3. Trade credit and political risk

When you sell overseas, you face the risk that customers in a different jurisdiction may become insolvent and, in some cases, additional political risks to your business activities. To cover you in such situations, two distinct but related insurance products can help.

Trade credit insurance protects your cash flow if an overseas customer goes bankrupt or fails to pay. If you extend credit to foreign buyers, this cover is essential. Arranging suitable credit insurance is particularly sensible when you’re trading with countries where thorough customer vetting is difficult.

Political risk insurance protects you from financial losses caused by political conflict overseas. These risks include war, unrest, asset seizures, or embargoes that prevent you from trading or from getting funds back. They may seem unlikely, but they are real in some territories.

The UK government recognises these risks too. UK Export Finance provides government-backed insurance and guarantees to assist UK exporters who may struggle to secure adequate private insurance.

4. Business travel and personal accident

Business travel insurance isn’t the same as holiday travel insurance. If you or your staff travel abroad, you need a specialist policy that includes:

Cover for business equipment such as laptops, samples, and presentation materials (in addition to personal property)
Replacement staff costs if a key employee falls ill abroad and cannot complete critical work
Higher medical expense limits (particularly important for countries like the USA with high healthcare costs)
Personal accident cover that protects both the business and the employee in case of death or permanent disability whilst travelling

If your team travels regularly for international meetings, trade shows, or client visits, annual multi-trip business travel policies offer value and the ease of not needing to arrange a single-trip policy for every excursion.

5. Employers’ liability

In the UK, employers’ liability insurance is a legal requirement. Most UK policies automatically cover employees temporarily working abroad. For example, attending a conference in Dubai or visiting a client in Austria for a few days.

However, things get more complicated if you develop a permanent presence overseas. For example, UK employers’ liability insurance is unlikely to cover opening an office in France and employing local people, and French law will require you to arrange appropriate local insurance.

If you send employees to work abroad for extended periods (typically over 30 consecutive days or on regular, repeated trips), you should check the terms of your policy to ensure they are covered.

6. Supply chain and contractual liabilities

When trading overseas, you might be contractually liable for the delivery of a certain volume and quality of goods within specific time frames. Often, the production/supply of these goods may come from a UK or overseas subcontractor. If they are unable to fulfil their obligations, you are likely to still be liable to your customer, which could have serious implications for your business and revenue.

These liabilities can often be protected against by ensuring your business interruption insurance includes issues which might arise at a subcontractor’s/manufacturer’s site. Including a ‘force majeure’ clause in your trading agreements can help mitigate potential issues, as this clause excuses a party from fulfilling contractual obligations due to unforeseen/unavoidable events – e.g. war, natural disasters, pandemics, etc.

Establishing a ‘global insurance programme’

If your business operates in multiple countries, managing insurance on a territory-by-territory basis can quickly become inefficient and costly. Gaps in cover can emerge between policies; you may face duplication, extra expense, and claims coordination can be difficult.

A global insurance programme mitigates these challenges. Programmes generally combine:

A master policy in the UK. This provides overarching cover and sets consistent standards across your business.
Local policies in each country where you operate. These ensure compliance with local legal requirements.

A master policy can sit alongside local policies to ensure comprehensive cover, but the exact structure depends on the countries involved and local requirements. This consistency makes risk management far simpler and gives you greater clarity over your global insurance spend.

Global insurance programmes aren’t just for large, multinational corporations. If you have a business that operates in multiple countries, they can be highly beneficial. A specialist broker can tailor a programme for you and handle the complexity.

Summary

Trading globally brings tremendous opportunities for UK businesses, but it also introduces complex risks that your insurance may not cover. From navigating North American jurisdiction exclusions, understanding your responsibilities under Incoterms, protecting cash flow against foreign customer default, to making sure your travelling employees have adequate medical cover, each aspect requires specialist knowledge.

With the correct combination of insurance, these risks become manageable. They also allow you to pursue international growth with confidence, knowing that you’re properly protected whether you’re shipping goods to Sydney, opening an office in Amsterdam, or sending your sales team to negotiate deals in New York.

To find out more about how we can help protect your business when trading overseas - including, where appropriate, introducing you to an overseas partner - speak to our team on 01603 218000.

Need help with your insurance?

If you have a question regarding the insurance of your business or need an insurance quote, we’re happy to help.

Speak to us: 01223 324233

International business insurance: a guide to trading overseas

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Does my business insurance cover me abroad?