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It is easy to lose sight of offshore business risks, as exhibited by the handiness of fire hazards in overseas subcontracted factories for multinationals, like Wal-Mart’s clothing production chains in Bangladesh. Global operations are traps for supply chain ignorance, as, by folly, corporate headquarters float on another strategic world, away from the crunch of logistics and the independence of suppliers.
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Wal-Mart has claimed ignorance of the Bangladesh leg of its supply chain. In insurance terms, or lack thereof, the company stands to indemnify damages out of its own pocket. In myriad costly ways it’s already doing so by dialoguing with all recognized suppliers and issuing factory safety modules and training funds—all these without establishing the global workers and factories under its wing.
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Standard business insurance imputes responsibility over workers and property on the insured, or the employer. Wise insurance brokerage from fiercely independent companies, like Freeway insurance, will caution businesses on this legal obligation. In some states, workers’ compensation and liability insurance are mandated. The judicial scenario, however, is more complex in multi-sited operations, especially as the network of subcontractors branches out along the supply chain.
Insurance coverage is evolving to follow the chain of operations. Where property, liability, and workers’ compensation may apply across global supply chains is an industry talking point enjoining multinationals today. As Adidas put it, global workers should be part of risk assessment scenarios that lead to more comprehensive business insurance coverage.
Freeway insurance is a trusted brokerage across several key American states, with its seat in California. It assists clients in scouting for comprehensive business insurance, covering all types. For more information, visit the company website.
