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LONDON--(BUSINESS WIRE)--ACE Group today advised UK companies to prepare now for the increased liability risks they could face as they expand their exporting activities.

ACE’s advice comes during UKTI’s Export Week and follows Prime Minister David Cameron’s assertion that if 100,000 more SMEs started selling overseas they could add £30 billion to the British economy and wipe out the trade deficit.¹ It also follows a six month period in which British exports have risen steadily² and exports to faster-growing markets are becoming increasingly significant³. However, as the volume of exports increases and companies look ever further afield for growth, so too do the risks, says ACE.

Mark Roberts, UK & Ireland Casualty Manager at ACE, said:

“Export liability risk is set to increase as an inevitable consequence of expansion into new markets. The US presents obvious challenges, as one of the world’s most complex and litigious markets and businesses should take extra precautions to ensure they are fully compliant.”

“Meanwhile, the commonly-used term ‘emerging markets’ belies the diversity of cultural, regulatory and legal issues that exporters must manage to successfully access the world’s faster-growing regions.”

Practical advice: ten tips from ACE

Against this backdrop, ACE believes that risk managers need to consider ten key points when exporting to overseas markets:

• DO YOUR OWN RESEARCH – gather as much information you can about new export territories in advance. Connect with other companies that operate in the market and draw from your professional memberships – the experience of others may help you avoid pitfalls.
• CRACK THE CODES – Before exporting to a new market, understand the codes of practice from established institutions, such as the US product safety commission, and the USDA and FDA codes of practise in the US.
• ONE SIZE DOESN’T FIT ALL - Remember that emerging markets have their own quality and safety standards. Do not treat regions like Asia as homogeneous. For example, products sold in China must comply with Chinese quality and safety standards. These operate at four levels: national, professional, local and enterprise. They can be mandatory or voluntary, and most mandatory standards require certification from an approved scheme⁴.
• KNOW YOUR SPECS - Have product specifications prepared for all exported products. These should be verified by trained personnel, including an attorney, and be reviewed at least every six months.
• COMPLY OR DEFEND – Document compliance and any valid reasons for any non-compliance. Non-compliance with standards, for example, may increase the likelihood of punitive damages being awarded in the event of a liability lawsuit, with potentially catastrophic effect.
• ASSESS YOUR RISKS – Ensure in-house risk assessments and product tests are carried out and results are well documented.
• SAFETY FIRST - Try and ensure product safety standards are common, regardless of territory.
• LABEL CLEARLY - Ensure that labels and supporting information specify the nature of any potential product hazard; the likelihood and potential severity of the hazard; how to avoid the hazard and the consequences of not heeding the warning.
• TAKE LOCAL LEGAL ADVICE- Take local legal advice on the nature of any label warning and carefully document your approach to ensuring that it is compliant with local requirements.
• REVIEW AND UPDATE - Revisit all product and user manuals regularly and keep them up to date, ensuring product advertising is consistent with documentation.

Phil Sharpe, Chief Operating Officer for the UK & Ireland at ACE, added:

“Widely differing legal and regulatory systems and product quality and safety standards can create significant exposures for exporters. Litigation that we might consider unbelievable in the UK can be successfully heard in other territories – and businesses need to be prepared.”

“Even if risk management is of the highest standard, it is inevitable that companies could run into difficulties at some point. It is vital that companies take legal advice in advance of their new business venture but also have a defensive strategy to manage their duties post-sale, supported by a well-designed, multinational insurance programme compliant across all of their export markets.”

ENDS

About ACE:

The ACE Group is one of the world’s largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited, the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index.

ACE UK & Ireland’s five regions are:

∙ Ireland (Dublin and Belfast) ∙ Scotland (Glasgow, Aberdeen) ∙ The North (Leeds, Manchester, Newcastle) ∙ Midlands (Birmingham) ∙ London and South East (London, Maidstone, Reading, Watford)

Additional information can be found at: www.acegroup.com/uk

¹ David Cameron speech at 10 Downing St, 10/11/11

² Trading Economics - http://www.tradingeconomics.com/united-kingdom/exports

³ UKTI - http://www.exportweek.ukti.gov.uk/full/

⁴ EU China Business Centre - http://www.eusmecentre.org.cn/content/exporting

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