To identify the territory of regulation and tax of a property risk, consider:
1. The nature of the cover provided;
2. The physical location of the insured property;
3. The territories which insured goods are travelling to and from; and
4. The location of the insured’s residence(s) or business establishment(s). 

Fixed property
Moveable property
Goods in transit
Standalone storage

Fixed property

The risk location for immovable property such as buildings is determined by the territory in which the property is situated. In the EEA, building contents insured under the same contract as the building, are treated in the same way as the building. (Although note the reference to insured’s residence or establishment below.)

If the contract insures buildings or other immovable property in more than one territory there will be multiple risk locations.

Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.  

Moveable property

In most territories, the risk location is where the moveable property is normally situated.

The main exception to this rule is in the EEA where the regulatory risk location for moveable property, other than contents of a building insured under the same contract as the building, is the territory where the insured is resident but the tax risk location remains the location of the moveable property. 

If the contract covers moveable property situated in more than one territory there may be multiple risk locations.

Where the moveable property’s location is uncertain or variable, the risk location is the territory in which the insured’s residence or business establishment is located.

Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.  

Goods in transit

In this section the guidance relates to goods in transit insurance covering physical damage to property when it is in transit on land. This can be taken out either by an individual or a corporate entity. For transits by air or sea please see the sections covering aviation cargo or marine cargo respectively.

In most territories, the risk location is the country in which the goods are situated.

The main exception to this rule is in the EEA where the regulatory and tax risk location for goods in transit is the territory where the insured is resident.

If the goods are in international transit, i.e. moving from one country to another, risk location should be determined on the basis of the location of the insured’s residence or business establishment.

In a few instances, the country that the goods are being imported to or from might also create a risk location.

Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax. 

Standalone storage

Standalone storage insurance covers physical damage to moveable property when it is in storage for more than the standard 60 days provided for on a goods in transit or cargo contract.

In most territories, the risk location is where the moveable property is normally situated.

The main exception to this rule is in the EEA where the regulatory risk location for moveable property is the territory where the insured is resident but the tax risk location remains the location of the moveable property. 

If the contract covers moveable property situated in more than one territory there may be multiple risk locations.

Where the moveable property’s location is uncertain or variable, the risk location is the territory in which the insured’s residence or business establishment is located.

Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.


Definition of 'business establishment'

European Union (EU) legislation defines the term ‘establishment’. Outside the EU the term is not so well defined, so in the absence of any contradictory guidance, it is appropriate to follow the EU approach.

Examples of business establishments:

  • subsidiary companies 
  • branches of companies 
  • representative offices 
  • offices managed by businesses’ own staff 
  • tied selling agents 
  • factories and workshops 
  • mines and quarries 
  • oil and gas wells 
  • drilling platforms fixed to sea bed

 

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Risk locator tool

Risk Locator | Establish the location of your risk

Frequently asked questions 

Introduction to Risk Location

What is risk location and why is it important ?

Introduction to risk location

Establishing the risk location

To help establish risk location please consider the questions provided via the link below

How to establish the risk location

Class of business guidance

To help you establish the risk location please consider the class of business

Class of business guidance 

Risk Location Examples

The interaction of different territorial rules can make a given scenario complex. Applying the principles set out will assist market participants in establishing the risk location.

Risk location examples

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