Liability Insurance Contributing Columnist


When Sales Go Global: Minimizing Complexity-Maximizing Control

Jen Pino-Gallagher
Director of Food & Agribusiness Practice
M3 Insurance

August 11, 2017


The US food and agricultural sector has consistently been a bright spot for exports. In fact, US agricultural exports have been larger than US agricultural imports since 1960, generating a surplus in US agricultural trade.

The US dairy industry has also stepped up to become a global player. Wisconsin alone exported $247 million in dairy products in 2016, which equates to nearly $5 million worth of dairy products exiting Wisconsin weekly.

Leading up to every pound of product on international store shelves, or mixed into a finished product abroad, are hundreds of details involving strategy, shipment and sales. Behind every product exported is an international sales person, from companies big and small, who travel to international destinations. Fighting jet-lag, these global business people work around the world to promote products at trade shows, meet with potential customers, and tour grocery stores to analyze the competition.

Back at the home office, international shipping and documentation experts prepare and obtain the myriad of certificates and documents that must accompany each international shipment. Meanwhile, management monitors the return on investment of the international promotions, travel, and internal resources needed to sustain the global sales.

It is a complex web of documents, registrations, and logistics which lead to the ultimate delivery of the products to their final destinations. Amidst the hubbub of activity surrounding export sales, it’s not surprising that the insurance and risk management aspects of international trade are often overlooked.

By incorporating their insurance broker at the beginning of export plan development, exporters often find that insurance solutions exist for perils and risks that otherwise may not have been identified. As companies transition from reactive to strategic exporters, it is imperative that their insurance coverages keep up with their growing international risks.

What could happen when a US company sells into international markets with only domestic policy coverage? First, the company would have no property coverage for products shipped to international markets because the claim occurred outside the coverage territory. Second, the exporter would have no foreign product liability coverage to respond to lawsuits or basic claims for foodborne illness abroad. Third, workers’ compensation does not cover endemic disease or sickness when travelling abroad. Fourth, if the company extends credit terms, there is a risk of a buyer defaulting on payment. Finally, the company’s employment related practices, and directors’ and officers’ liability policies may not fully comply with the regulatory needs of the jurisdiction in question. This article will address the first three insurance topics; subsequent articles will explore workers’ compensation, credit insurance, and global master programs.

Protecting your product in transit: Exporters can benefit by purchasing a stand-alone cargo insurance policy. Premiums are developed based upon annual values shipped, average shipment value, jurisdiction, packaging, and means of shipment. A deposit premium is made once a year based on estimated values shipped and then trued up at the end of the year with actual shipments. This approach alleviates the worry of having an uninsured shipment bouncing between multiple brokers and warehouses abroad. Companies maintaining inventories at a particular destination can consider either an open ocean cargo or a stock throughput policy.

Many different variations and options are available with regard to structuring the program. For example, companies can opt to insure for cost plus insurance and freight, or cost plus insurance and freight plus 10 percent or 15 percent, or at selling price. Most importantly, the stand-alone cargo insurance policies are generally more comprehensive than the coverages written into the service contract of a freight forwarder. Freight forwarders often limit coverage within certain distances of their conveyance or lack warehouse coverage altogether. While a freight forwarder may offer to take care of the details including insurance coverages, the convenience often comes with greater expense, more worry, and less coverage.

Foreign General and Product Liability: As mentioned above, a company’s domestic policy will not defend in foreign jurisdictions.
The solution is to purchase foreign product liability as a component of an exporter’s package, or as a stand-alone policy. This coverage defends and pays damages for bodily injury or property damage that your product may cause to international consumers. Just as with domestic policies, the insurance buyer must be certain that the foreign product liability includes affirmative coverage for foodborne illness. Foreign personal and advertising injury are available as well, but product recall will not be available as part of this liability package.
Only one policy needs to be purchased, not one for each country. Foreign excess liability or umbrella is also available to sit on top of these limits depending upon your risk tolerance.

Business Travel and Accident Insurance: Protecting employees while abroad is even more critical than protecting products in transit. Travel and accident insurance for team members, spouses, or even guests, is a critical add-on to every exporter’s program. It will also cover and assist in non-life threatening cases like lost luggage and identity fraud.

International trade is complex. The key to minimizing the complexity and risk while maximizing opportunities is to rely on a knowledgeable insurance broker at the start of the export journey. Connecting with strategic advisors early in the export process can not only save headaches and worry, but also save valuable time and money.



Jen Pino-Gallagher is director of the food and agribusiness practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits. The views expressed above do not necessarily reflect those of Cheese Reporter. You can contact the columnist by calling (800) 272-2443, or by visiting


For more information, call (800) 272-2443 or visit


Jen Pino-Gallagher

Jen Pino-Gallagher is a Director of Food & Agribusiness Practice at M3 Insurance. M3 Insurance offers insight, advice and strategies to help clients manage risk, purchase insurance and provide employee benefits.
For more information, call (800) 272-2443 , visit

Recent M3 Insurance Columns

A Tool For Improving Your
Insurance Coverage
by Jen Pino-Gallagher
July 8, 2017

Food Grade Product Liability Insurance for Your Food-Grade Products
by Jim Brunker

June 9, 2017


What do you think about 
Jen Pino-Gallagher's Comments?*

Please tell us if you are a
Dairy product manufacturer 
Dairy marketer /importer/exporter
Milk producer
Supplier to manufacturer