The first answer is usually a belief that "refundable" business class tickets will allow cancellation. Or, that travel "waivers" offered by agencies or travel providers will protect the company's investment.
Unfortunately, this is not always the case. Reading the fine print you will find that refund promises and waivers are applicable in a very narrow set of circumstances and they are poorly regulated.
Travel insurance can provide a way to manage the risk of expensive business travel plans changing. In addition, other coverages can be added to the policy and provide security to the traveling employee. We are not talking about the policies sold at the airport. Rather, we are looking at a comprehensive risk management plan to protect the employee and the investment in the travel.
Travel insurance can be bought per trip or can be purchased to cover all trips made by employees in a certain period, usually one year. Such policies are designed for businesses where officers and employees travel overseas frequently and the travel is to less developed or extremely rugged areas.
Types of Travel Insurance
There are five main categories of travel insurance:
- Trip Cancellation- This covers the business in the event the trip is canceled. You want this coverage to be as broad as possible. There is usually an option to expand the covered cancellations to "any reason."
- Travel Medical and Major Medical- Once the employee is overseas do you know if your company's medical insurance will cover medical care overseas? Travel medical is for short-term trips and covers medical care. In addition, the insurer will assist in finding doctors, hospitals and assisting with language barriers. Major medical is coverage for long-term travel or postings overseas.
- Emergency Medical Evacuation- Covers the cost of evacuating or transporting an employee to medical facilities. If the employee needs to be returned to the U.S., the costs can exceed $25,000. Helicopter medical transportation is not cheap.
- Accidental Death-Flight Accident- Provides benefits to beneficiaries of a traveler in the event the traveler dies on the trip as the result of an accident or crash. This is similar to life insurance.
- Luggage and Personal Belongings Coverage- Provides coverage if your luggage and or personal belongings are lost, stolen or damaged during the trip. You want to make sure that electronics are covered. This can be very valuable coverage if one considers the costs of business suits and laptops.
According to the US Travel Insurance Association, travel insurance policies range from 4% to 8% of the cost of the total trip with extras and endorsements adding to the cost. Higher cost policies will include several of the coverages listed above in one package. For example, our $5,000 trip noted above would cost $200 to $400 to insure.
Finally, many travel insurers offer comprehensive trip assistance to their insured travelers. This can include language assistance, recommendations of professionals (lawyers, dentits, etc.)if needed, and other assistance that is available 24/7 and usually by a simple toll free call.