Whether you’re based in the U.S. or in Canada, as a CPG brand on RangeMe, it’s a natural next step to expand your sales across the border. With any form of business growth, one thing to consider is your insurance coverage. Insurance is a crucial tool for protecting your hard work and becoming a verified seller for marketplaces and distributors; cross-border insurance helps continue that while you scale your product availability.
We’ll break down everything you need to know about cross-border insurance – the what, why, and how.
What is Cross-Border Insurance?
If you’re based in the U.S. and want to start selling in Canada – or vice versa, if you’re based in Canada and want to start selling in the U.S. – you need cross-border insurance.
The two main qualifications of cross-border insurance are:
1) Your insurance provider (or a reinsurer/insurance partner) should be licensed to operate and sell insurance in the geography you’re looking to make revenue in.
So for example, if your company is based in the US, your insurance provider should be licensed in the U.S. to issue you a policy. They don’t have to physically be in the U.S. so long as they have a license to sell there. This applies for Canadian businesses too.
Another avenue to explore is an insurance provider from your home country that works with an eligible reinsurer or admitted partner for your foreign revenue coverage. Using the same previous example, a U.S. insurer licensed in the US can issue a policy to you that covers Canadian sales – without being licensed in Canada themselves – by using an eligible reinsurer or admitted partner for that portion of CAD sales.
2) Your policy must explicitly include coverage for:
- The revenue for the foreign jurisdiction you’re looking to sell in
- Claims arising from products sold into the foreign market, including liability for incidents occurring there.
If your company is based in the U.S. and you’re looking to sell in Canada, your insurance policy needs to be able to provide coverage for the sales you make in CAD and for any claims that could occur – like if your product causes an allergic reaction for a Canadian consumer. Ideally, this policy could also insure the sales you make at home in U.S. revenue too.
Why Do You Need Cross-Border Insurance?
Having cross-border coverage not only means your business is protected in other geographies but you’ll also be verified to sell with satisfied contractual requirements on other online marketplaces or with other distributors. Many marketplaces that service both the U.S. and Canada only allow access if you have proof of insurance (a Certificate of Insurance or COI) showing you’re covered for both U.S. & Canadian sales. Cross-border insurance is an inevitable step in the logistics of expanding your geography.
How to Get Cross-Border Insurance:
We won’t sugarcoat it; as simple as it seems, cross-border insurance is a unique coverage that can be trickier to access. You may have trouble finding a provider or you might be looking at higher insurance premiums.
Some tips to help you find cross-border insurance that’s tailored to your needs:
- Look for insurance providers who advertise their expertise in cross-border coverage – specifically those who are familiar with the U.S. and Canada. They’ll likely be more knowledgeable about requirements, coverages best suited for the kinds of products you’re selling, certificates, and any other documents.
- The cost of cross-border insurance can vary based on your revenue, geography, payroll, the types of products being sold, and more. If you’re not a fan of the first quote you get, it doesn’t hurt to shop around and review your options.
- If you need cross-border coverage to meet the requirements of a marketplace or distributor, double check your Certificate of Insurance/COI (a.k.a your proof of insurance document) that everything is correct before you submit to prevent denials.
The hottest tip? Work with us! Foxquilt is a cross-border company with offices in the U.S. and Canada; we’re built to support your business no matter which side of the border you’re on. We specialize in cross-border solutions at no extra cost – even Canadian businesses with 100% U.S. sales.
Plus, we sell like you sell – online! Through our team of experts and our digital platform, we tailor your policy to your business in a snap. You can even quote, purchase, and receive policy documents all online here.
Expanding across the border is a thrilling next step for any business; your products are about to be experienced by a whole other part of the world! It just takes some initial work to safeguard your hard work, no matter where your products are going. Both Foxquilt and RangeMe are here to make this transition not only possible, but successful too.
RangeMe subscribers can find Foxquilt’s Service profile here.