Employees Abroad? Here’s How Foreign Voluntary Workers’ Compensation Can Help
With the emergence of COVID-19, the risks of business travel have taken center stage as employees traveling to other countries or even just national conferences brought the risk of disease back into their offices.
Outside of a global pandemic, traveling workers still carry many more risks than employees who sit in an office 15 minutes from their home.
Employees traveling abroad may fear threats to their safety, especially as tense geopolitical situations continue to play out on the national stage and workers injured in another country may not be able to count on workers’ compensation to cover the costs.
Enter foreign voluntary workers’ compensation (FVWC), an insurance product designed to provide workers’ comp coverage to employees who are conducting business outside of their home countries.
RIMS recently released a report on the advantages of FVWC policies and the key considerations risk managers should keep in mind when they are considering a FVWC insurance product.
What Is Foreign Voluntary Workers’ Compensation?
FVWC can be purchased as either an endorsement or a standalone insurance policy. The coverage is considered voluntary because it is not required by law to purchase.
It can be considered necessary by employers, however, especially if they have employees who travel outside of the country frequently.
As an endorsement, FVWC extends domestic workers’ compensation policies for U.S. citizens and U.S. nationals traveling outside of the country. Typically, this type of coverage excludes endemic disease and is limited to a certain number of days, according to the RIMS report.
By contrast, standalone FVWC policies provide coverage for both U.S. and non-U.S. travelers. Non-U.S. traveling employees and expatriates on long-term assignments are also covered under standalone FVWC policies.
Standalone FVWC policies often provide for a broader range of coverage than endorsements, including coverages for the use of multilingual doctors, emergency family travel arrangements and medically-necessary evacuations to countries with more advanced medical teams.
The policies are structured similarly to U.S. workers’ compensation policies with workers’ compensation and employee liability components.
Getting the Most Out of Your FVWC Policy
The RIMS report notes that it’s important to consider coverage overlaps and coverage jurisdictions when looking into FVWC policies.
It’s also important to note that FVWC exists outside of employee benefits, like medical and life insurance. It’s different from business travel accident (BTA) policies, as well, though the two are similar in that they are both non-compulsory policies that cover accidents occurring when an employee is abroad.
The primary difference between FVWC and BTA policies is that FVWC does not cover personal travel and excursions that occur during a business trip. BTA policies often do.
FVWC can be extended to cover injuries that occur during a personal excursion, however.
BTA policies can also cover a worker’s spouse, partner or children, whereas FVWC does not.
Typically BTA policies will have occupational exclusions, but if they don’t, an employee may be able to file a claim under both BTA and FVWC policies, depending on the circumstances.
The RIMS report recommends that employers add policy language to their BTA coverage to address any overlaps.
Another important consideration is the coverage jurisdiction of a FVWC policy. The RIMS report notes that employers determine who will be covered by FVWC policies and the jurisdiction that will dictate the terms of coverage.
Choosing a specific U.S. state could allow employees to receive benefits at a higher level than they would in their home state or country. If an employee is working in a country where they qualify for local benefits that are better than those in the jurisdiction of a FVWC policy, then they may not be covered by or seek FVWC benefits. &