Structures and Functions

Because of the need to clear coverage regulations and for local claim handling, global insurance programs are made up of a master insurance policy issued in the country that exercises central control over operations (usually, the location of the group’s parent company headquarters) and local insurance policies issued in each country where operations are conducted. The master insurance policy has coverage known as difference in condition (DIC) and difference in limit (DIL) as functions that allow for global uniform application of the coverage details and limits of liability specified in the master insurance policy.

In cases where there are differences in the details of compensation between the master policy and the local policies, the DIC covers the differences, and in cases where there are differences in the limits of liability between the master policy and the local policies, the DIL covers those differences. If local insurance policies are issued in accordance with the coverage details and limits of liability specified in the master policy, this type of coverage is not needed, but as a practical matter, restrictions arise as a result of local insurance conditions, and cases where differences arise are not uncommon.