Once a company starts to expand internationally, it is increasingly common and desirable as a first step to purchase a Foreign Difference in Conditions (DIC)/Difference in Limits (DIL) policy. This type of policy is usually purchased on a *non-admitted basis, as part of the company’s UK insurance program. It is designed to “drop down” to provide cover in the event the country does not require locally purchased (admitted) insurance. It would be insured in GBP, so there is no need to deal with different currency rates in determining the policy limits or premiums. In those countries where you need to purchase local admitted insurance, this DIC/DIL policy would be excess of the local limit. The DIC/DIL cover would provide coverage based on UK policy conditions, especially in the case of liability coverage, where the jurisdiction cover would apply to foreign occurrences.
Non-Admitted – for these purposes, this is insurance provided by an insurer but where no local policy is issued. It may also relate to cover provided by an insurer that is neither licensed nor registered to do business in the country where the property or risk is located. Some countries allow non-admitted insurance, others do not. In practice, smaller overseas operations would not be an issue but once a location is of critical size, compliance with admitted laws is necessary. Note that EU countries are covered by the Freedom of Services regulations, deeming all states to be one country for insurance purposes.
