Insurance Risks of Business Travelers

Business travelers say there’s no substitute for being there. Even though budgets are tight and new technology makes it easy for people to connect virtually anywhere, businesses understand that it is crucial for employees to meet with customers face-to-face and travel to events such as conferences, training workshops, sales meetings and trade shows.

And yet, while most business trips are uneventful, medical emergencies and other kinds of crisis situations can still arise.

Far from home, in an unfamiliar location, business travelers may become sick or injured and be unsure of where to turn for assistance. Outbreaks of political and civil unrest around the globe also have made business travel more perilous.

Without a comprehensive business travel accident program, businesses put their employees at unnecessary risk and put themselves in danger of getting hit with costly uncovered claims and related expenses.

Other types of insurance, such as an employee’s health insurance or the company’s foreign voluntary workers’ compensation coverage, are often inadequate in these situations.

A good business travel accident program will consist of two key components: a travel assistance program as well as a business travel accident insurance policy.

Business Travel Trends

Businesses that send their employees out on trips in the United States or abroad need to prepare themselves for the possibility that something could go wrong.

In the last year, the trend in business travel spending has been improving, following a slump in 2009, and with it there has been a projected increase in the number of business trips as well.

Spending on global business travel rose 8.4 percent in 2010 after falling 7.8 percent in 2009, according to a report published in August by the GBTA Foundation, the research arm of the Global Business Travel Association. It is expected to grow another 9.2 percent in 2011, according to the report, The Global Business Travel Spending Outlook 2011-2015, sponsored by Visa.

At the same time, the number of business trips was expected to increase as well. Total business trips for the first quarter of 2011 were projected to increase 8.6 percent to 109.9 million compared with the same period a year ago, according to a report released in January by the NBTA Foundation, the education and research arm of the National Business Travel Association.

For many businesses, the opportunity to get out and meet with clients is invaluable. Being there in person, however, is not without risk.

Risks of Business Travel

While there has been an increase in business travel spending and in the estimated number of business trips, unrest in many parts of the world has increased the risk of business travel.

In this past year alone, there have been uprisings throughout the Middle East — in Tunisia, Egypt, Libya and Syria. But it is not just the Middle East that has been in turmoil. The riots in London and other major cities in England in August were a reminder that even in the developed world, unexpected travel risks can arise.

Employees caught in the middle of a riot or uprising may find themselves trapped and unable to get out of the country safely. In a crisis situation, where there is violence in the streets, airports may be closed and roads may be impassable.

Business travelers can encounter similar problems in the event of natural catastrophes.

In the last two years, there have been earthquakes in Japan, New Zealand and Chile. Hurricanes, volcanoes and flooding also can create unsafe conditions, disrupt travel plans, and turn travel into a nightmare.

Although political and civil unrest can create hazardous conditions for business travelers, even a simple illness can take on much more serious dimensions when someone is away from home and unable to get fast, reliable medical treatment.

Coverages Fall Short

Insurance coverages such as an employee’s health insurance or a company’s foreign voluntary workers’ compensation policy will often fall short in these situations.

Health insurance, for instance, may not provide coverage for all of the healthcare costs that are incurred outside of the United States. It also can do nothing to help employees who become ill while in a foreign country to find medical treatment or to help stranded employees get out of dangerous locations.

Foreign voluntary workers’ comp covers the costs related to injuries but doesn’t cover any of the other kinds of illness or emergencies that can arise while a person is traveling on business.

A comprehensive business travel accident program, however, is designed to respond specifically to the needs of the business traveler and to provide financial protection to their employers. The two key components to the business travel accident program are: travel assistance and travel accident insurance.

Travel Assistance

One of the keys to a safe trip, especially to potentially volatile locations overseas, is good planning. A travel assistance provider can help employees plan their trips so that they avoid taking unnecessary risks. Travel assistance providers have extensive knowledge about the destinations that employees plan to visit and can help guide travelers to safe locations and hospitals where appropriate medical care can be received. All of this information can be crucial in helping a company to make an informed decision about whether to send an employee to a certain location and where the employee should stay.

If, in spite of careful planning, employees find themselves in precarious situations, a travel assistance provider can help to get them out of the country quickly and safely.

If commercial flights are not available, they can arrange for chartered aircraft, for example. If the roads are unsafe and local taxis are too risky, the travel assistance provider can arrange for armored car service.

A travel assistance provider also can intervene to help employees who are sick or have been injured, making sure that they get to the nearest hospital that can provide appropriate care for the individual. The provider also can lend assistance in case the employee does not know the language and can take care of any fees that a foreign hospital might require before admitting a patient. Once the individual’s condition is stable, the travel assistance provider can arrange for transport out of the country and back home again.

Travel Accident Insurance

While travel assistance helps to keep employees safe in the event of an emergency while traveling, travel accident insurance helps businesses to defray the costs of such emergencies.

The cost of a medical evacuation, in particular, can be very expensive. Because a medical evacuation may involve the use of an air ambulance aircraft, a nurse and other specialized equipment, the average claim is about $50,000 and in some cases much more than that. A political evacuation, on the other hand, usually costs about $5,000.

Consider the case of one employee who became ill while on a business trip in Papua, New Guinea. The individual had to be evacuated to Australia to receive the appropriate medical care, but because of the size of the landing strip on the island, special medical evacuation flight arrangements were required. The total claim: $57,692.

Travel accident insurance will help to cover the cost of these claims and will pay for out-of-country medical bills not covered under an employee’s health insurance. Travel accident insurance may also cover other perils such as kidnap and ransom, and provide an accidental death benefit as well.

When choosing a business travel accident program, businesses should look for an insurer that has extensive experience working outside of the United States. The experience of the travel assistance company is also an important consideration and companies should make sure that the travel assistance provider has expertise in the locations where their employees will be traveling. The insurer, meanwhile, should have a strong branch network and a reputation for reliable, quality loss control and claims services.

Once a company has a business travel accident program, it should be sure to communicate all relevant information about the program and contact numbers to employees who will be traveling.

Most employees who travel on business stay healthy and safe and experience no life-threatening crises. But with the growing unrest and volatility in countries around the world, the risk associated with business travel has been increasing. Political unrest or a natural disaster can shut down air travel and strand employees far from home. In a medical emergency, employees may not know how to find medical help on their own and may need emergency transport back home.

A comprehensive business travel accident program that includes travel assistance as well as business travel insurance can help keep employees safe if there is a problem and provide companies with a measure of protection against unexpected and costly claims.

Topics USA Workers' Compensation Aviation