financial interest coverage

Financial interest coverage is insurance protection purchased by a multinational company against the risk of damage to the parent company's financial interest in its uninsured local subsidiaries.

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Where the local subsidiary cannot be directly insured by the parent compnay's global insurer under the master policy for licensing, regulatory, or other reasons, the parent is nevertheless insured for its financial interest in that subsidiary. So, if the subsidiary suffers a loss, the parent company is covered for its financial interest in that loss suffered by the subsidiary.


Related Terms

The financial interest clause amends an insurance policy to cover only the multinational...