Why are many insurers reluctant to give worldwide cover? (Territorial limits)

There are generally four reasons why insurers are reluctant to give worldwide cover:

  • The basis of the law in a foreign country might be very different, exposing the insurer to a greater risk
  • The laws of the foreign country may include regulations limiting or regulating the cover that a non-local insurer may provide
  • The exchange controls could pose a problem when settling claims
  • It might be difficult to provide an adequate claims service in certain countries
 
Subject: 
Introduction to Liability