This case provides a good reminder of the importance of a policy’s “coverage territory“ designation, particularly as more and more businesses operate across borders.
A recent decision highlights the need for businesses to carefully consider the applicability of insurance coverage across borders. In this case, the owners of an Idaho restaurant traveled to Thailand for business related to the restaurant. While in Thailand, thieves stole uniforms and decorations from the owners, who then submitted an insurance claim. The insurer denied the claim because the policy only covered property within the “coverage territory,” which was limited to the U.S., its territories, and Canada.
The decision is another example of why companies conducting business across international borders should take care to ensure they are appropriately covered. Expanding the definition of “coverage territory” is often one of the first changes that should be made to ensure proper coverage for cross-border business. For example, companies doing business in U.S. territories, such as Puerto Rico, U.S. Virgin Islands, and others should ensure that the coverage territory is not limited to the continental United States, as is often the case.
This article authored by Sergio F. Oehninger and Patrick M. McDermott originally appeared in the Hunton Insurance Recovery blog.