Foreign Voluntary Workers Compensation

Example

“The construction company purchased foreign voluntary workers compensation coverage before sending a crew to build a project in Mexico, ensuring the workers would be covered if injured on the job site.”

Memory Tip

Think 'FVW = Foreign Volunteer Workers' - it's voluntary coverage for workers going to foreign places.

Why It Matters

Standard workers compensation policies typically exclude coverage outside specific territories, leaving employees vulnerable when working abroad. Without this coverage, companies face potential lawsuits from injured foreign workers, and employees may be left without medical care or income replacement in countries where they lack local insurance or social safety nets.

Common Misconception

Many employers incorrectly assume their regular workers compensation policy automatically covers employees anywhere they work, but most policies have strict territorial limitations. Foreign voluntary coverage must be specifically purchased and added to the policy, and it's not automatically included even for companies that regularly send workers overseas.

In Practice

A U.S. oil company sends engineers to work on a drilling platform in Norway for six months. Their standard workers compensation policy excludes foreign coverage, so they purchase foreign voluntary coverage for $2,500 annually. When an engineer breaks his leg on the platform, the coverage pays $80,000 in Norwegian medical costs and $35,000 in wage replacement benefits, costs that would otherwise fall on the company or leave the injured worker financially stranded abroad.

Etymology

This term developed as international business expanded in the late 20th century, combining traditional 'workers compensation' concepts with 'foreign voluntary' to indicate optional coverage extending beyond standard territorial limits.

Common Misspellings

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