publication date: Mar 9, 2012
author/source: Kenneth A. Hall
Dorothy's famous observation to Toto - "I've a feeling we're
not in Kansas anymore" - often sums up the initial reaction of those
experiencing the developing world for the very first time. In North America we live in a bubble of
relative economic stability, social peace and the rule of law; an existence
that is unheard of in most of the developing world.
The usual rules don't apply outside the North American
continent, particularly in developing countries, and insurance is no exception.
Whether you are a large relief and development organization with staff on
long-term foreign assignments or a local charity sending volunteers on a work
trip, you must clearly understand and address the risks to your organization,
personnel and property.
This series of articles will introduce you to some of the
basic risk categories associated with relief and development work outside
Canada and the United States, including tips on the kinds of insurance
If your organization is involved in constructing or owning
buildings, you should be aware that most Canadian insurance companies will not
usually cover real property outside Canada. Depending on the legal protection
of property rights in the country where you are operating, fire insurance and
other physical damage coverage may be available. However it is best to check
with your insurance agent or broker in Canada first, as some insurers will
insure foreign property risk under certain conditions.
There are also North American insurers with international
subsidiaries who specialize in global property risk. They are capable of
underwriting and insuring damage to infrastructure and other special projects,
such as dams, irrigation and hydroelectric facilities.
The primary property risk facing most Canadian charities is
loss or damage to equipment transported temporarily overseas by employees or
volunteers, including such items as computer, video, telecommunications,
medical, dental, engineering and construction equipment.
Canadian insurance companies offer property policies to
cover contents kept at the owner's property and will often include extensions
for items taken off premises to temporary locations, or while in transit
between various locations. However
unlike a Homeowner's policy which usually automatically includes a specified
amount of coverage for personal contents taken on vacation outside Canada, the
extensions in a Commercial or Institutional policy generally restrict coverage
for equipment to within Canada and the continental United States.
If your organization owns or rents equipment that is used in
relief and development work or is taken temporarily abroad, you may obtain
optional physical damage insurance coverage through a "Worldwide Property
Floater." A description of the items to be covered (including manufacturer,
model, serial number and value) must be provided to the insurance company in
advance. Although this coverage is restricted in certain countries and is often
more expensive than regular domestic coverage in Canada, it can be an effective
way to address the potential loss of valuable equipment. It is best to check
with your insurance provider in advance regarding coverage availability and
Most insurance policies issued by Canadian insurers contain
a policy territory restriction that limits coverage only to claims that occur
within Canada and the United States, or that provides limited worldwide
coverage for employees temporarily outside Canada while acting within the scope
of their duties. However it is
preferable to obtain a General Liability policy that contains coverage with a
full worldwide policy territory for any of your organization's temporary or
permanent operations and activities outside Canada.
The primary risk is for liability actions brought against
your organization in a Canadian or US civil court, even though the accident or
injury took place elsewhere. The reason for this is that much of the rest of the
world, especially developing countries, has little or no civil liability
system, and in any event, the potential awards available in North American
courts are more attractive and substantial.
Another concern is the possibility of death or injury to passengers
in a motor vehicle. Insurance coverage and licensing for "owned"
(organizational) vehicles in most foreign countries must be arranged either
through the local government or through private insurers operating in that
jurisdiction. The level of coverage, if available at all, can vary widely.
Coverage for private or "non-owned" vehicles used on behalf
of a business or organization can be covered with a Non-Owned Automobile
Liability Policy, often as part of a General Liability Policy. However the
standard Non-Owned Auto Policy only covers accidents taking place within Canada
and the United States, whether or not the General Liability Policy has a full
worldwide policy territory.
Coverage for non-owned vehicles outside Canada is only
available by purchasing a separate Excess Auto or Umbrella Liability Insurance
Policy, assuming there are no territorial restrictions or non-owned auto exclusions. Although Umbrella policies are
primarily used to provide excess coverage limits, they also have the advantage
of a drop-down feature that can cover risks not insured in an underlying
General Liability policy, such as non-owned vehicles outside Canada and the
The subject of abuse claims is an important one. Only a
handful of insurance companies in Canada provide abuse liability
coverage for charitable organizations. Although it is possible for relief and
development organizations to qualify for such protection if they have
acceptable prevention plans in place, they are not eligible if they own,
operate or manage orphanages and other residential care facilities in the
developing world. The simple reason is
that it is virtually impossible to impose the same level of worker screening
and prevention procedures in foreign residential care facilities as in Canada.
Watch for part 2 of this article, which addresses medical, security and
Kenneth A. Hall is president
of Robertson Hall Insurance. He
specializes in insurance protection and risk management advice for over 6,000
churches and Christian charities across Canada. He is a frequent presenter at
national denominational conferences, para-church leadership gatherings and
various regional seminars. His "Facing the Risk" series of articles highlights
the current issues facing Christian charities and their leaders, including
abuse prevention, board governance, counselling services and injury prevention.
For more information, email him at or visit http://www.robertsonhall.com/church_home.html.