Many years ago, around 1999, with great fanfare it was announced that business insurance companies, within the EU, would be able to trade across borders freely. Theoretically we were told that a business, for example in France, could arrange a policy with a UK, German, Belgian etc insurer.
Those of us in the industry were or course sceptical that this sort of thing would not happen in practice and of course, we were right. Technically this sort of cover can be arranged, an umbrella policy, but it only applies to the largest companies that have the ability to deal with specialist brokers who arrange cross border policies.
But what about the half million pound turnover business that is looking to extend their internet retail insurance policy to cover products sold across the EU? This is slightly more difficult, but it can be arranged.
If you look into the deepest, darkest depths of your policy wording, you will more than likely find an exclusion for products sold outside of the UK. What this means is that if someone, in Italy, buys a product from you and makes a claim (due to the product causing some sort of damage) then you may not have the cover.
As a broker, one of the questions we ask all retailers, manufacturers, wholesalers and suppliers is if they sell products outside of the UK. Many will say no, but if the chance presented itself, then of course they would sell.
It is in exactly these circumstances that you need to get professional advice. You cannot get cover from a non-domiciled (ie not trading in the UK) insurer that would satisfy employment liability legislation. So you need to make sure that you have cover with a UK based insurer, which can include an overseas insurer that is authorised to trade here. But you need to make sure that any products liability claims are covered. Usually they will be but the wording will say that any action must be pursued through a UK court and subject to English or Scots law. This is acceptable, because the insurers will of course prefer to deal with the courts they are used to, ie ones based here.
As with all types of cover, whether you think you need advice or not, you should speak to an independent broker to consider all of the options to make sure your business is best protected.