Question

United Technical, Inc. (UT), a manufacturer of batteries used in autos. It has much of its own equipment in its own manufacturing facility. UT, however, relies heavily on components from a firm in Thailand. UT sells its batteries to firms all over the world. Provide a discussion of the different types of commercial insurance that UT would want to have in place as it does business.

Answer 1

DIFFERENT TYPES OF COMMERCIAL INSURANCE IN INTERNATIONAL BUSINESS:

1. MARINE/CARGO/TRANSIT INSURANCE: DURING EXPORT AND IMPORT, GOODS HAVE TO BE MOVED FROM FACTORY TO CUSTOMERS OR FROM CUSTOMERS TO FACTORY. DURING EXPORT, IF THE EXPORTER IS RESPONSIBLE FOR THE LOSS OR DAMAGE,THEN THE INSURANCE IS ARRANGED BY THE EXPORTER. OTHERWISE IT IS ARRANGED BY THE CUSTOMER. AND MANY A TIMES, THE EXPORTER ARRANGES THE INSURANCE BUT PASS THE COST TO THE BUYER.
2. PRODUCT LIABILITY COVER: THIS PROTECTS THE EXPORTER IN THE EVENT THAT YOUR PRODUCT INJURE OR CAUSE DAMAGE TO A PERSON OR THEIR PROPERTY. IF THE EXPORT IS A MANUFACTURE, HE MUST TAKE PRODUCT LIABILITY COVER EVEN IF THE PRODUCT IS NOT MANUFACTURED BY ANYONE.THIS PROTECT THE EXPORTER FROM SAFETY CLAIMS, MANUFACTURING DEFECTS, SPOILAGE COST,ETC.
3. EXPORT CREDIT INSURANCE: THIS PROTECTS THE EXPORTER AGAINST NON-PAYMENT OF PRICE BY THE CUSTOMERS. THIS ALSO COVERS THE RISK OF NOT ABLE TO RECOVER THE COST OF PERFORMING THE CONTRACT BECAUSE OF SPECIFIED REASON.
4. EXPORT FINANCE INSURANCE: FOR AN EXPORTER, GROWTH IS VITAL. THE MONEY GOT FORM EXPORTING IS NOT ALWAYS SUFFICIENT FOR INVESTING FOR THE GROWTH OF BUSINESS. EXPORT FINANCE INSURANCE PROTECT AGAINST INSUFFICIENT CASH FLOW IN BUSINESS AND THUS ENSURES GROWTH.