Small business insurance for exports

In the good old days, selling depended on a mixture of boots on the ground and the circulation of ads and hard copy marketing materials. This tended to restrict most small businesses to selling locally. Insurance was therefore set up based on a domestic business model. Well that was then. Today a website can bring in customers from anywhere with access to the internet. Indeed, with SEO services working overtime, your business can be on top of the Google rankings and sell around the world. The only limits are on your ability to supply the goods to meet demand.

Except once you sell across national borders, a whole raft of legal problems can arise not the least of which is how to get paid. Fortunately, the federal government has produced a solution. It’s called the Export-Import Bank of the United States. This is designed to keep jobs in the US by providing private export financing and help to foreign buyers to purchase from US suppliers. In 2012, the Bank approved a total spend of $35.8 million, of which just over $6 millions went to very small businesses. It’s estimated this has preserved at least a quarter-million full-time jobs.

Yet this is not enough on its own. The fact your business may be able to make the sales with financial confidence does not mean it should. The real problems come in the different laws and regulations about product safety and liability. What may be a perfectly legal product for the US market may contain raw materials banned from sale in other countries, or the law where sales are made may impose strict liability on the manufacturer if a consumer buys a product and is injured when using it. This should prompt you to detailed research before you accept orders. It may be necessary to change manufacturing specifications or the labels. Even when you have everything in compliance with the requirements of each new market, you should then come to the question of insurance.

No matter whether you sell goods or services, the general rule is that you are liable for all the losses flowing naturally from a breach in the duty of care owed to your customers. For these purposes, it does not matter where the customers are resident. You could find yourself facing proceedings either in your own US state or in the country where you sold or both. This is not the type of litigation you could or should attempt to deal with yourself. You need people with expertise in conflict of laws and cross-border litigation. You need small business insurance to pay for that expertise. So there’s the set-up you need to grow your business. A federal agency will give you financial backing. Your own research will ensure it’s legal to sell into each target market. Small business insurance will keep you out of trouble if liabilities arise from these export sales.

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