Doing Business Abroad? Don’t Assume Your Insurance Travels With You

By Craig Santa Maria

It’s easier than ever to conduct business internationally, introducing your products and services to potentially lucrative new markets. With those opportunities come a lot of the same risks you face at home: quality control, supply chain reliability, contract disputes. But in foreign lands you might face different risks and other complicating factors such as political instability or unfamiliar cultural, legal, or economic systems.


Are You Protected?

You’ve secured all of the right types of insurance to protect you from the various liability risks you might face in your home country. But what if the same things occur while doing business on foreign soil? Do you know if you are covered?

Here are a couple examples of situations that could happen to you or your employees when far from home:

  • A firm’s head of sales was abducted in Venezuela while driving on a rural road between customer visits. The captors demanded from his employer a $500,000 ransom for his return. Local authorities couldn’t help, so the company had no choice but to pay. The employee was released unharmed, but the company was out the $500,000 because its domestic general liability policy did not cover events that occurred outside of the U.S.
  • An expatriate in Poland strikes and killed a local pedestrian and was jailed. After pleading guilty and admitting liability, the judge ordered him to pay the widow $2 million. The expatriate carried no international property and liability insurance, and had mistakenly assumed his employer was providing that protection. When he couldn’t pay the damage award and criminal penalties, the employer was named and attached in the lawsuit. In order to salvage a $30 million investment in Poland, the employer had to pay.

What You Need

In both of these cases, the employers should have obtained separate foreign liability and travel and accident insurance for their employees working or traveling in foreign countries. If you are or will be traveling internationally, you have two primary options, depending on how much you travel:

  • Trip-specific policies cover just those traveling during the specified period they are outside the U.S. Coverage and rates are determined based on criteria such as where they are traveling, for how long, types of employees traveling, and their specific activities.
  • Global general liability is a permanent policy that covers all employees anywhere throughout the term of the policy. This can be a more cost-effective option for companies that regularly travel and do business in foreign lands.

These policies are widely available and will cover common claims, as well as some less common, such as repatriation of an employee’s body in the event of death in a foreign land. Your insurer will also manage the entire process for you, such as hiring security experts in a hostage or threat situation or negotiating with local legal officials or claimants. This is an invaluable service when you are alone far from home.

Whether you are doing business in the U.S., overseas, or both, you should never assume you are covered. Spend the time to review your risks and insurance needs with an expert. A high quality broker will help you secure a comprehensive protection package, where ever you go and whatever your needs, and will be on your side when you need him/her most.




Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultancy and commercial insurance brokerage in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at



Experts in Risk Management and Providing Peace of Mind

ERISA Bond vs. Fiduciary Liability: You Need to Know the Difference

By Craig Santa Maria

If you provide a health or retirement plan for your employees, they expect it to be there when they need it. And if the people managing the plan act outside of the law, resulting in plan losses, they can be held personally liable to the plan members. If you are a trustee of your company’s benefits plan, do you know if you and your company are adequately protected?

It’s the Lawnest egg

In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA) to protect plan participants and beneficiaries from fraud, theft or mismanagement by plan managers, or fiduciaries. Basically, ERISA established rules governing how voluntarily-created, private-sector retirement and health plans must be managed and it requires those companies to provide protection to participants in the form of an ERISA Fidelity Bond equal to 10% of the plan value.

For additional information about ERISA Fidelity Bonds, visit the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) website.

Know the difference

ERISA bonds protect plan participants, but many business owners wrongly believe ERISA bonds also protect fiduciaries, those who handle plan assets, from liability against losses arising from breaches of fiduciary responsibilities. That is not true, and it can leave you and your company exposed to costly judgments.

For example:

  • A group of employees sued retirement plan trustees, claiming a new outside plan administrator improperly delayed transferring fund balances, resulting in lost investment income. They were awarded more than $1 million and defense costs totaled $250,000.
  • A manufacturer failed to submit the required forms for an employee’s life insurance policy, but continued to deduct the premium from the employee’s paycheck. When the employee died, the life insurer denied the claim. The employee’s heirs sued the plan fiduciary and recovered $250,000.

Fortunately, in both of these cases the companies had protected their plan trustees with fiduciary liability insurance, which provided legal defense and covered the legal settlements.

3 Critical Considerations

Every employer should carefully answer these three questions to be sure you have the proper protections in place for your employees, your plan fiduciaries, and your company:

  1. Do you need an ERISA Fidelity Bond? If you offer most types of employee benefit plans, you most likely are required to purchase an ERISA Fidelity Bond. There are some exemptions; check the EBSA website for detailed ERISA information.
  1. Is your ERISA Fidelity Bond sufficient? The law requires that the bond cover at least 10% of the plan value in the previous year for each fiduciary, so if your company has multiple people who have fiduciary responsibilities, each must be bonded for at least 10%. The bond must be at least $1,000, but no more than $500,000, for each bonded plan official. Each person is responsible for his own bonding, so if the bond amount is insufficient, that person can be fined by the EBSA.
  1. Do you also need fiduciary liability insurance? Remember that the ERISA Fidelity Bond does not protect the fiduciary from liability resulting from breaches of fiduciary responsibility. Claims against the fiduciary put his personal assets at stake. Even if you have a Directors and Officers (D&O) liability policy, most do not cover fiduciary liability.

If these questions raise any doubt about whether you or your company are adequately protected from claims related to ERISA, speak with a high-quality, experienced broker to ensure your business and personal assets are covered.




Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultancy and commercial insurance brokerage in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at


Experts in Risk Management and Providing Peace of Mind

Risk Managers: 3 Strategies for Reducing Workers’ Comp Claim Costs

By Craig Santa Maria

If you are sitting through lengthy workers’ compensation claim reviews once or twice a year, that might be a sign that you’re spending too much for workers’ compensation insurance.

You know the routine: Every six to 12 months you sit with your insurance carrier’s claims adjuster reviewing one claim after another. It’s your opportunity to manage the subjective prediction of future costs for open claims, called reserves, which are a major factor in setting your future insurance rates. If you are not working proactively with the adjuster to set accurate reserves, you’re probably paying too much for your coverage.

workers comp

What can you do?

You have more control in this process than you might think. First, you should educate yourself about how Workers’ Comp claims are managed and how your insurance rates are set. Check out this primer by The Hartford, which provides a comprehensive overview.

Once you’re up to speed on what it’s all about, there are three things you should be doing to better manage your claims and save money:

  1. Make claim reviews obsolete – Instead of waiting for the claims adjuster to schedule infrequent reviews, you or your broker / advisor should work proactively every month with the adjuster to keep them up to date on your claims status. This will make them much more knowledgeable about each claim, ensuring reserve estimates are as accurate as possible and effectively eliminating the need for the typical claims review.
  1. Close cases quickly – Claims that remain open longer typically result in larger total payouts, which in turn increase your insurance rates. Work closely with your injured employees to get them back to work as quickly as possible.
  1. Work with an expert – Many brokers are reactive or delegate claims management to junior associates who don’t have the skills or experience to advocate for you. Work with a broker who has a team with the right knowledge and skills to advocate on your behalf, questioning the adjuster and holding him accountable to set accurate reserves. By doing this for our clients, we are able to lower their reserve estimates and their insurance rates. For example, on behalf of a food processor client we were able to work with the adjuster to drive reserves down by nearly $150,000 in 2015, a reduction of 31%, which significantly lowered the clients insurance cost.

You didn’t build a strong business by just letting things happen. Take these actions to proactively manage your workers’ comp claims and drive down your costs.

Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultancy and commercial insurance brokerage in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at Follow us on Twitter @SMCrisk.


Experts in Risk Management and Providing Peace of Mind

Know Your Risks When Serving Alcohol at Company Events

By Craig M. Santa Maria

With Halloween behind us and shorter, colder days ahead, it’s time to begin planning for the festivities of the holiday season. For many companies, that means hosting an employee holiday party. Whether it’s snacks and drinks in the office or a gala dinner at a nice restaurant, this holiday tradition can expose your business to significant risk.

alcoholWhile alcohol is a part of American culture, especially during the holidays, over consumption can precipitate illegal or injurious behavior between guests, such as sexual harassment, and injuries or deaths resulting from drunken driving accidents. And if your company sponsored the event at which the offender was served alcohol, you could be held liable for damages.

James Wu, an employment attorney with Wu Castillo, P.C., in San Francisco and Walnut Creek, CA, notes that a California appellate court recently found an employer liable for the actions of an employee who became intoxicated during a company-sponsored holiday party, drove home safely, but later was involved in a fatal automobile accident when driving a co-worker home. “The appellate court overruled the trial court that originally determined the company was not liable, agreeing with the company’s contention that the person was able to drive home safely after the party,” says Wu. “However, the victim’s family appealed and the appellate court agreed that the man’s intoxication due to the alcohol consumed at the work party was a causal factor, so the company could be held liable for the fatality.”

This risk is not exclusive to holiday events. A few years ago, a company provided alcohol to employees during a company picnic, after which one clearly intoxicated employee was severely injured in an automobile accident. Others at the picnic attempted to prevent the individual from driving, but were unsuccessful. While the company was not held liable for the employee’s insurance claim, it did incur a significant cost in settling a civil lawsuit.

What are your risks?

As a business owner, you should understand your legal risks. While these laws differ from state to state, generally employers who provide alcohol at company-sponsored events are expected to exercise reasonable care to avoid serving minors and to prevent injuries or improper behavior by intoxicated guests.

Some employers avoid this risk by serving only non-alcoholic beverages at their employee events. But if you do choose to serve alcohol, Wu recommends the following things you can do to protect yourself and your guests:

  • Make the event voluntary and purely social. Avoid any business related activities, such as award ceremonies or business-focused speeches.
  • Ensure guests understand that rules governing employee conduct apply also at the event. These rules should be detailed in your employee handbook.
  • Limit the number of drinks served to guests by using drink tickets or a similar system
  • Offer a wide selection of equally attractive non-alcoholic drinks and plenty of food
  • Plan a program of activities to minimize the focus on drinking
  • Consider hiring a professional bartender to run the bar or host the event at a bar or restaurant with a liquor license. These professionals are typically trained to identify those who are intoxicated and limit consumption. They also incur some of the liability if an issue does arise, so be sure they are properly trained and insured.
  • Close the bar at least an hour before the party ends
  • Have plans in place to provide transportation home for intoxicated guests and/or hotel discounts/arrangements.
  • Do not encourage or organize any “after-parties” where guests might continue to drink after the company event has ended

What if something bad still happens?

If, despite your best efforts, a liability claim does arise from an incident caused by an intoxicated guest, your property and casualty insurance coverage will likely help defray the financial costs. Because policies, laws and circumstances can vary widely, it is important that you talk with your insurance broker about your risks and coverage before your event to be certain you are protected.


Craig Santa Maria is President and COO of Santa Maria & Company (SMC), a risk management consultant and commercial insurance broker in the San Francisco Bay area with deep expertise helping companies protect what is most important to them: their assets, their employees, and their futures. Contact SMC at 925-956-7600 or online at

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