Ace Continental Europe president warns that distributors are facing higher levels of export risks as they expand into emerging markets

Middle-market European distributors face increasing levels of export risk as they move into emerging markets, ACE has warned.

The warning comes at a time when a growing number of mid-size European companies are expanding into these economies, with many lacking sufficient cover.

Ace Continental Europe president Jeff Moghrabi said: “We are seeing more companies facing more export risks in more markets. The economic turmoil since the onset of the financial crisis has prompted many companies in Continental Europe to seek new opportunities in the world’s developing regions, including many smaller firms.

“More extended supply chains are undoubtedly making the risks more complex. For example, the concept of strict liability in the US legal system can lead to a company having unexpected responsibility, regardless of whether it is a distributor or manufacturer.”

He added: “Some insurance policies do not allow coverage for distributors, so companies need to make sure they work with insurance partners who understand the issues and provide the coverage they need.”

According to the EU, China is now the EU’s third largest export destination, while Asian markets collectively account for a third of EU exports.

At the same time, the litigious US market remains the EU’s number one export destination and is shortly expected to introduce a suite of new export regulations. The insurer last week launched a new risk management solution as part of its strategy to support the evolving needs of middle-market businesses.

The solution provides export liability coverage for companies that supply products from their manufacturing locations in Continental Europe, and provides worldwide jurisdiction protection, vendors indemnity and catastrophe management cover.

Cover is available for businesses with revenues of under and up to €1bn, and for selected larger companies on a case-by-case basis.

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