The complete guide to business travel insurance

Mr. Klein does not hit ‘snooze’ on his alarm this morning. It’s time to pack his bags and head to a much-awaited international trade conference that had been postponed for two years due to the pandemic. As he grabs a cup of coffee on his way to the airport, he mentally compares his last trip, which had him stranded in another country after testing COVID positive, with the current one.

He now has his travel manager’s number on speed dial, extra masks and sanitizers in his bag, his vaccination report safely tucked away with the rest of his documents, and most importantly, his business trip is insured this time. Had his previous trip been insured, the policy would have covered his treatment and hospitalization instead of Mr. Klein having to contact his team back home for emergency funds and assistance.

Although most firms have health and worker’s compensation policies in place as part of their employee benefits package, these policies do not cover the employee(s) when they embark on business travel. This is where business travel insurance comes into play. While corporate travel, in general, has a lower level of risk compared to leisure travel, there are still certain risk factors that need to be considered as part of duty of care. Business travel insurance offers employees some much-needed relief knowing that they are safe in case things go awry.

What is business travel insurance?

Business (or corporate) travel insurance covers different risks an employee might face during a business trip. The primary categories of coverage include trip cancellation, medical expenses, evacuation, and luggage or other personal loss. This coverage generally lasts from the first day of travel until the time the employee returns to the office.

Why is business travel insurance important?

Duty of care is an essential part of a corporate travel program. Employers are legally bound to protect their employees, board members, remote workers, consultants, and contractors when they travel for business.

Business travelers often don’t have a choice when it comes to visiting faraway or isolated places. This, coupled with the instability brought about by the pandemic, has led to an increase in the complexity of risks associated with business travel. More than ever, travel managers are focused on leveraging the assistance services provided as part of the business travel insurance program.

The coverage provided by this insurance ranges from evacuation, medical emergencies, travel inconveniences and arrangement assistance, pre-travel and cultural advice, and 24/7 multilingual assistance. Many insurance providers also have standalone applications providing real-time safety and security tips to employees. These apps track the employees’ phones (on their approval) to monitor their location, send them real-time alerts in case of potential threats, and offer immediate assistance.

By incorporating business travel insurance in a firm’s travel program, travel managers would no longer have to source these services separately from multiple providers. Instead, they’re all consolidated in one place and provided either through a local or global provider. As for the employees, they would be reassured that if anything goes wrong during the trip, they can depend on the travel team to help.

While business travel insurance would certainly increase the cost of each business trip, it also helps mitigate major financial losses. Several issues that could pile up as major expenses for the firm can be reduced significantly with business travel insurance.

What does business travel insurance cover?

Business travel insurance offers a wide range of coverage that can be purchased separately or as a bundle. Here are some of the primary coverage categories:

Emergency evacuation

Business travelers might find themselves in the midst of a natural disaster, pandemic outbreak, riot, or terrorist attack. Also, business travel disruptions often mean that your employees get stuck in unfamiliar environments with unfamiliar customs and possibly even significant language barriers, all of which can complicate everything from daily navigation to emergency responses. Insurance coverage helps with the immediate evacuation and repatriation of your employees in such cases.

Trip cancellation

Flight cancellations and delays are a common occurrence—either due to adverse weather conditions or operational issues. Sometimes your employees may be forced to cancel their trips due to unexpected medical issues. Business travel insurance helps alleviate the costs involved by covering trip cancellations that happen within an allotted time period as well as the cost of making new travel arrangements. When such circumstances call for hotel stays or other expenses, the insurance policy covers these additional expenses as well. 

Illness and accidents

Business travelers are susceptible to various illnesses, ranging from viruses like COVID-19 to individual health issues like food poisoning or severe allergies. Many people with chronic conditions (declared prior to the business trip) are also at risk of having flare-ups during the stresses of business travel. Many insurance policies would cover any medical expenses that come up unexpectedly. Apart from this coverage for medical issues, it also provides your employees with financial aid in case of fun shortages. Business travel insurance comes in handy, especially when your employees are stuck in places where their expenses are not covered by their conventional medical insurance policies.

As for accidents, airline and road traffic accidents are the most common risks involved and are usually covered by the insurance policy. Should an employee, unfortunately, lose their life while traveling or face permanent disability, the insurance policy reimburses a lump sum and covers the costs involved in transporting the individual back to their home country.

Theft and loss

Business travelers are often dressed in professional attire and carry high-end electronic devices around to keep track of their work on the go. This is going to stand out, making them an easy target for pickpocketing. Since these devices are essential for business trips, they’re covered by the insurance policy if they’re lost or stolen and can be replaced without much hassle. Most policies also cover the loss of check-in baggage and important documents like passports or licenses. For instance, if an employee loses their check-in baggage in transit, the policy will cover the associated cost of the goods within. As for lost documents, the coverage helps with the funds required to re-apply. On the whole, coverage for theft and loss offers reimbursement for lost, stolen, or damaged baggage and items during the entire trip, not just at the airport.

Note: Not all insurance policies cover every point mentioned above since some fall under force majeure. However, a good insurance policy will always help your employees in case of unforeseen mishaps.

How to find the right business travel insurance policy

Businesses looking to purchase corporate travel insurance must understand that there’s no one-size-fits-all insurance policy. Organizations have different requirements based on the type of business travel prevalent in their industry. Here are some factors you must assess to pick the right insurance policy:

Types of travel insurance

Business travel insurance can be split into domestic and international insurance and then further divided into single-trip and multi-trip insurance.

• Single-trip insurance: Covers one trip from the start to the end dates of the journey

• Multi-trip insurance: Covers all the trips made within a specific period, like a quarter, six months, a year, with an approximate limit of 31 days per trip

If your firm only takes a few business trips, then a single-trip insurance policy would suffice. However, if your employees travel frequently, then an annually renewable multi-trip policy is the best option. This way, you wouldn’t have to pay separately for each trip, which increases the overall cost and involves a lot of admin work. If you’ve decided to purchase an annual multi-trip policy, you will be asked to notify the insurance provider of the different countries your employees will be traveling to since different levels of policy coverage are needed for different countries.

Cost

The cost of an insurance policy typically depends on the number of employees traveling, the location(s) they are traveling to, the duration of the trips, and even the type of activities that the employees will be doing (e.g. employees who work in non-profit or engineering sectors would require additional coverage for safety and security). If your firm has a frugal approach to travel insurance, you can weigh your options and choose coverage for what’s most needed.

Compare the coverage offered by different policies

Review multiple policies and compare the levels of coverage offered for domestic and international travel, how much the policy would reimburse for each category and the number of employees that can be added to a group insurance policy. Afterward, note down the benefit amount and the maximum benefit offered by each policy. The amount could be fixed, based on the workplace hierarchy or the employee’s salary. Finally, check the time limit offered by each policy. It’s advisable to pick policies that offer full coverage with 24/7 multilingual support (via texts, calls, email, or in-app notification).

Here’s the takeaway!

Employers are responsible for employees when they are out on business travel. Investing in the right business travel insurance policy will protect your employees and their belongings as well as save your business from financial losses. Although most insurance companies are adept at meeting the general requirements of a business traveler, zeroing in on the right policy can be slightly tricky. To get started, you can explore different insurance providers online and compare the plans they offer based on the factors we’ve listed above.