Business Travel Insurance

Finally, some good news! Travel is picking up, so some insurers have started offering cover again. Just remember, you won't be covered for any pandemic related claims if you do take out domestic travel insurance.

Whether you're an employee or a business owner, modern businesses activities often require domestic and international travel. Just like leisure travel, there may always be a risk of financial losses.

• What are the common travel losses experienced on business trips?

  • Requiring overseas medical treatment or evacuation
  • Experiencing flight cancellations
  • Losses of expensive luggage and items

  Corporate travel insurance provides security against these losses when travelling on business.

• What special features are designed to cover business losses and its employees?

  Corporate policies also have specially designed features to cover losses that affect a business if anything happens to its employees.

  • Alternative staff: Reimburses the cost of a sending replacement employee to complete the assignment of the original worker.
  • Resumption of assignment expenses: Cover for the costs involved for a worker to resume an assignment after being repatriated for injury.
  • Extraterritorial workers compensation: Provides cover for the employer's legal liability to pay for compensation for personal injuries to workers sustained while engaged in manual duties carried overseas.
  • Corporate travellers family care: Accidental death benefit provided to the insured worker in the event that their spouse passes away while they are travelling.

How is travel insurance for business different to standard travel insurance?

Losses that occur overseas have a significant impact not only on the individual, but also to the business. Business travel insurance policies combine:

• Standard travel insurance features
• Business-specific features
• Annual cover for multiple trips
• Group cover for multiple employees

Standard travel insurance features included in a business policy

• Cancellation cover: The delay or cancellation of a business trip due to unforeseen events is not uncommon. Many corporate policies will provide unlimited cover for unforeseen events and circumstances that are out of the businesses or workers control. Such events may include illness, accidents and extreme weather conditions
• Cover for loss of personal items: Smartphones, notebooks and laptops carry much important business information and this is reflected in the amount of cover each of these can be given should they become lost, stolen or damaged. Luggage can often be insured for its full value and arrangements made for hiring costs of replacement items if necessary. This can be further extended to cover documents and other types of work equipment, including samples. Most business travel insurance policies will provide an extra level of cover to account for expensive items that are often required by business travellers
• Emergency medical assistance or evacuation: Overseas medical expenses have the potential to cause significant losses to businesses in the event that their worker is hospitalised overseas or is required to be transported home. Many corporate policies will offer unlimited medical cover for workers
• Travel delay: Travel delay will reimburse the costs of additional accommodation expenses if the workers transport is delayed for an extended period of time
• Political risk and natural disaster evacuation expenses: Covers costs incurred for returning the insured worker to their country of residence or nearest place of safety if they are required to evacuate as a result of political risk or natural disaster
• Breach of identity cover: Provides cover for legal expenses, lost wages or other losses that may be incurred following an insured person's identity being taken and used by another party

These are just some of the cover features that may be included in a corporate plan. Corporate policies will generally provide the same features as those offered on regular individual policies

Business-specific features

1. Alternative staff and resumption of assignment expenses
2. Extra territorial workers compensation
3. Corporate travellers family care

1. Alternative staff and resumption of assignment

This benefit is also know as the replacement worker cover or reassignment of an injured worker and is designed to reimburse the costs of:

• Sending a substitute worker to complete the business duties of a worker that is unable to do so as a result of death, injury or illness or the unexpected return home following a relatives death while travelling.
• The insured worker returning to complete their assignment if they are forced to return home after suffering one of the events listed on their policy.

• What type of expenses are covered?

  • Economy air flight for interstate domestic trips within Australia
  • Business class air flight for international trips, unless the worker originally flew in economy class

• What are the exclusions of this benefit?

  • Expenses incurred for claims arising from pre-existing medical conditions
  • Expenses that have occurred following recommendation by certified medical professional for the worker not to travel
  • Expenses that have been incurred that should have necessarily been included in the workers travel budget from the company

2. Extra territorial workers compensation

This provides employers with a personal liability benefit to cover any workers compensation it must pay employees if an accident occurs on a business trip.

• Does this include domestic travel?

  Yes, however this type of cover is only available when the worker is carrying out duties on a temporary basis outside of the state or territory that their usual employment is based.

• What event's does this cover?

  The company will be covered for any compensation that they may be liable to pay the worker as a result of:

  • Death
  • Injury
  • Occupational disease

• What are the conditions of this cover?

  The insurer reserves the right to exercise any recovery in the policyholders name. The policyholder must provide any necessary assistance as required by the insurance company. The business must make available any necessary documentation related to the claim. This may include;

  • Medical reports
  • Reports of injury forms
  • Claims forms
  • Other necessary documentation if required by the insurer

3. Corporate traveler family care benefits

Many business travel insurance policies will also provide a range of benefits to provide extra cover for unforeseen events that may occur to the policyholders family while they are away. Some of these include;

• Spouse accidental death benefit. This cover feature will provide a benefit payment to the insured person in the event that their spouse dies as a result of an injury while the insured person is travelling. This benefit is generally not payable if death is the result of an injury that was sustained while travelling with the insured.
• Education fund supplement. In the event that the insured person dies as the result of an injury while travelling overseas, the insurer will pay a benefit for each of the insureds children. This benefit may vary between providers but will generally be about $15,000.
• Spouse retraining benefit. In the event that the insured person dies while travelling overseas, the insurance provider will pay a benefit to cover the costs of their spouse training to gain employment or improve their employment prospects.

Can I get an annual policy?

Eligibility criteria vary with insurers, but as an example Covermore’s annual business travel insurance, you must be under 74 years of age and an Australian resident and travel mainly for business purposes on behalf of an Australian company.

Can I get a group policy?

Most business travel insurance plans do allow multiple people to be covered under a single policy as long as the trip is for business related activities. This can be extremely convenient for trips requiring more than one person.

Am I covered for expensive business items?

Most business travel insurance policies have benefit limits for cover against loss, theft or damage of luggage and personal business items. Often these limits are not high enough to cover the replacement costs of expensive items such as laptops and mobile phones.

Expensive item cover

Fortunately, most business travel insurance policies offer you the option to increase the benefit limit on specified business items for a small extra fee. For example, Cover-More Business Travel Insurance allows you to increase the benefit limit by up to $4,500 for single items and up to a total of $15,000 for multiple items. All you have to do is fill out an Enrolment Form and attach receipts or recent valuations (less than 12 months old) for the specified items.

Am I covered for company laptops?

You are usually covered for company owned items if the use of the item is for business related travel.

Am I covered for non-business travel?

A business trip normally includes some down time when you relax and put your feet up or enjoy a side excursion or two. Business travel insurance policies understand this and can cover you for some leisure related travel.

For example, Cover-More Business Travel Insurance can cover up to six weeks of non-business travel per year. The only condition is that you must be officially on a business trip (i.e. more than 250 kilometres from your home).

How much does corporate travel insurance cost?

The cost of corporate travel insurance will be determined by a number of factors including:

• Number of trips: This refers to the estimated number of trips per annum to both domestic and international locations
• Duration: The average duration of travel required for each of these separate trips
• Destination: Premiums are also determined by the destinations the workers are travelling to and the likelihood of a claim occurring. Insurers are able to calculate this by referring to past claims data
• Activities: The activities carried out by the worker on their travels. Activities that present an increased level of risk to the insurer may incur a premium loading
• Sum-insured: The sum-insured refers to the cover levels applied to each of the different benefits
• Benefit excess: Each benefit will have an excess applied that will need to be paid in the event of a claim. Most employers will cover this amount for the insured worker
• Age of travellers: In the event that the company is looking to provide cover for older workers, there may be a premium loading applied if they are over a certain age
• The policy chosen: The actual policy that the employer chooses will impact the final cost of the cover. Policies can vary greatly in the range of benefits offered and level of cover provided in the event of a claim

These are just some of the factors that may impact the cost of corporate travel insurance. Taking the time to get a clear understanding of your business travel cover requirements may mean you save hundreds in the long-term.

Is business travel insurance tax deductible?

According to Section 8-1 of the Income Tax Assessment Act 1997, you can claim a tax deduction for losses and outgoings that are incurred in the process of making an assessable income, except where they are of a private nature.

Insurance is considered private and not tax deductible

Insurance policies cover items that are generally of a private nature, such as illness or injury and loss, theft or damage of personal belongings. In light of this, the ATO has ruled that insurance costs, including travel insurance costs, are generally private in nature and are therefore not tax deductible.

Should I even bother if it can't be expensed?

Nevertheless, business travel insurance should still be an essential part of every business person’s portfolio, given that they tend to travel more frequently than leisure travellers, which increases their exposure to risk.

What type of business travel insurance policy is most suitable?

Choosing the type business insurance policy that is most suitable for your needs will really come down to your own situation and cover requirements. Many insurers will offer both individual business policies and corporate policies to cover groups. This section will explain the different types of cover available to workers and business owners.

• Individual business insurance policy: This will provide cover for just one worker and can usually be taken out on a multi-trip basis. This means that the worker is covered for an unlimited number of trips within a 12 month period
• Group corporate travel insurance policy: This will provide cover for a number of workers in an organisation under a single policy. Group policies will still provide each worker with the same level of cover as a single-policy and each worker is issued with their own policy. As with individual policies, group cover can generally be taken out on both a single-trip and annual-trip basis. The number of workers that can be covered under a single policy may vary between providers so it is worth verifying this in the product disclosure statement prior to application
• Domestic or international: Most insurers will give the option of cover for international trips, domestic trips or a combination of both. Many organisations will look to cover both domestic and international trips as workers are generally required to make trips both interstate and overseas. It is important to review the terms and conditions of different policies as some insurers will only cover domestic trips a specified distance from the usual base of employment. Similarly, there are often exclusions applied to countries where there is an increased threat of a loss occurring due to political or environmental factors

Tips to compare and find the best* business travel insurance policies

With so many different cover options available on the Australian travel insurance market, finding the right option for your organisation is not always easy. Here are some key points to consider when comparing different policies;

• Adequate cancellation cover: With so many different factors at play when travelling for business, it is not unusual for business travellers to experience last minute changes to their travel plans. This can often result in the organisation suffering financial losses for prepaid expenses. Such expenses may include airfares, accommodation or tours. This makes finding a policy that will provide an adequate benefit for cancellation a must for individual business travellers and organisations looking to cover a number of workers.
• Maximum number of workers covered: There may be a limit on the number of workers that can be covered under a single policy. This may present a challenge for larger organisations that require a great number of staff to travel each year.
• Discounts for group policies: Many insurers will offer discounted premiums for group policies. Business owners should never be afraid to ask their insurer what benefit they are entitled to for covering a large number of workers.
• Maximum age: Insurers will have different restrictions on the maximum age of travellers to be covered under a corporate plan. Age restrictions should be outlined in the product disclosure statement.
• Preexisting medical conditions: The challenge of taking out a group business policy is accounting for medical conditions that different workers may have. Organisations will need to notify the insurer of any workers that suffer from pre-existing conditions. In most cases, these workers will be required to fill out a medical questionnaire or may be required to take out their own separate policy.
• Medical expenses: Cover for overseas medical expenses is one of the most critical components of a travel insurance policy. It is important for anyone looking to take out cover to have a clear understanding of what support is in place in the event the insured becomes hospitalised overseas or requires emergency evacuation.
• Cover for baggage and personal items: It is not unusual for business travellers to be required to travel with expensive equipment such as smartphones, tablets and laptop computers. Different insurers will have a maximum level of cover that will be paid for personal items and may apply a sub-limit for each item. In the event of a claim, insurers may have different requirements for what supporting evidence must be provided in order to receive a benefit payment. Such evidence may include;
  • Receipt or other proof of documentation
  • Police report if item is stolen
  • Report from transport carrier official
• Benefits: Obviously one of the most important aspects of comparing travel insurance is reviewing the built-in and optional benefits included on the policy. Each benefit will have its own of conditions for a benefit to be provided.
• Exclusions: Each policy will have its own set of exclusions for when a benefit will not be paid. It is critical that individual business travellers and/or organisations review these exclusions closely to avoid any surprises in the event that a loss occurs. Business owners should take the time to make sure their travelling workers are fully aware of these exclusions.

These are just some of the factors to consider when comparing different policies. It is vital to read through the product disclosure statement prior to application to find cover that is both affordable and offer the right level of cover.