Employees injured while temporarily outside of the United States may or may not be entitled to workers compensation benefits, depending on the extraterritorial coverage provisions of the applicable state law. Many states extend benefits to those injured outside their borders (whether in another state or outside the country), provided that the contract of hire was made in the state, or the principal localization of the employment is in the state. However, circumstances can arise under which such employees would not be entitled to state workers compensation benefits. While employers liability coverage generally does apply to injuries to employees temporarily outside of the United States or Canada (as long as the employer is legally liable for damages as a result), many employers prefer to address this exposure by arranging for voluntary compensation benefits coverage using this endorsement.

US nationals assigned to work indefinitely outside the United States can also be covered under this endorsement. However, coverage under a foreign voluntary workers compensation policy or endorsement is generally preferable. There is no National Council on Compensation Insurance ("NCCI") foreign voluntary workers compensation endorsement, but manuscript foreign voluntary workers compensation endorsements are in widespread use. Although the terms and conditions of these endorsements are by no means standard, a foreign workers compensation coverage endorsement usually consists of language very similar to that of the NCCI voluntary compensation endorsement (but omitting the requirement that bodily injury occur while the employee is only temporarily out of the country), plus language providing coverage for endemic disease and repatriation expense.

An endemic disease is one that is peculiar to a particular country. The endemic disease coverage language of a foreign workers compensation endorsement establishes that coverage applies to injury or death arising from endemic disease, even if the disease is not covered under the workers compensation or occupational disease law of the designated state.

Repatriation expense coverage reimburses the insured for expenses over and above normal transportation costs when it is necessary to bring an injured, sick, or deceased employee back to the United States. Some foreign workers compensation coverage endorsements impose a sublimit on repatriation expense coverage; the adequacy of any such sublimit should be carefully evaluated. The extra transportation costs under such circumstances can be enormous.

Because of the repatriation and endemic disease coverage available under a foreign voluntary workers compensation endorsement or policy, many employers purchase this type of coverage for all employees injured outside the United States, regardless of whether the assignment is temporary or permanent.