Companies working abroad should be aware of the territorial limits of their group insurance scheme

Employees will only qualify for the death and disability benefits offered by their employers insurance schemes if they reside within the territorial limits stated in their policy. Territorial limits generally include South Africa and, in some cases, its neighbouring states. If employees are seconded to a country outside the territorial limits for longer than the period stipulated in the policy without notifying their insurer, they will not qualify for benefits should a claim arise.

In spite of this “it is surprising how often employers fail to notify their insurers when members are deployed abroad” says Brent Smith, Risk Manager, Alexander Forbes Life. And with the rest of Africa a growth area for many South African companies, it is important to ensure that employees are sufficiently covered when they travel into Africa or further abroad.

Since absences separated by periods of less than 6 consecutive weeks are added together by most territorial limitation clauses, Smith cautions employees and their organisations that “if an employee spends, say, one week in Dubai each month they are technically deemed to be living abroad and may not be covered by the company’s group scheme.”

In short, employers can be in breach of the territorial limitations clauses both by having people abroad for too long, or by having people abroad too often, if their insurers are not aware of it.

To avoid these pitfalls “insurers need to know the full details of staff deployment if they are to ensure that benefits remain in place for members working abroad” advises Smith.

Alternately, Smith recommends that companies choose policies that offer the longest cover without the need for notification - or have their territorial limits extended beyond the usual countries.