Many things can go wrong during a remote meeting, out of state meeting, remote office visit, or other planned business trips. Airports can lose or damage your luggage. You may need to suddenly cancel your trip plan due to a personal emergency.
Beyond these reasons, it is wise to consider getting business travel insurance. This coverage should be financially protected if you experience any throttle that has been covered before or for work.
In this guide we will answer what business travel insurance is, how it works, what is covered, who will get business travel insurance, whether it is worth it, and how a good business credit card can help.
How does business travel insurance work?
You have insurance for your home, car and health care. You may also be covered by life insurance. But if you want to protect yourself financially from a business trip retreat, where do you head? Fortunately, you can purchase business travel insurance, also known as corporate or business trip insurance.
“Business travel insurance is insurance coverage specially designed to protect individuals traveling for business-specific reasons, providing comprehensive protection against unexpected incidents and costs that may arise during business trips,” explains Mark Friedlander, director of corporate communications at the Institute for Insurance Information in St. John’s, Florida.
Consider that many of the costs associated with future business trekking must be paid well in advance and cannot be refunded. In other words, if something happens that prevents you from traveling, you could be on the hook for hundreds, if not thousands. That’s where you can get business travel insurance.
“You can purchase a single travel policy that covers the costs incurred on a single trip. “Or, you can choose an annual or multi-trip policy that covers eligible expenses (usually one year) that will incur during the lifetime of the policy, regardless of the number of trips you’ll be going to during that period.”
What does business travel insurance cover?
For each Friedlander, what standard business travel insurance typically covers:
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Travel cancellation/discontinuation costs
- Costs related to travel delays
- Medical expenses incurred during travel
- Missed out spending on connection assistance
- Costs and cumbersomeness associated with lost luggage
- Rental car and accommodation costs
Stan Sandberg, co-founder of TravelInsurance.com, says many consumers have opted for travel insurance to cancel/disruption protections for travel provided.
“Standard Travel Cancellation Coverage will refund non-refundable prepaid fees if you need to cancel for a wide range of reasons, such as an insured traveler becoming unforeseen ill.”
– Stan Sandberg, co-founder of Travelinsurance.com
Medical emergency and healthcare coverage away from home are other popular standard features in most plans.
“This is especially valuable for employees traveling abroad where normal health insurance is not covered, and those with chronic illnesses can find coverage for the extent to which they burn while on the trip before a business trip.”
However, business travel insurance does not cover all possible costs. Among the typical exclusions are:
- A reasonably foreseeable event
- Acts of war
- Declared epidemics and pandemics (by the World Health Organization and/or the Centers for Disease Control and Prevention)
- Travel restrictions imposed by government agencies
Who needs to get business travel insurance?
Great candidates for purchasing business travel insurance include those who travel frequently for work but have not yet been covered by their employer.
“Individual travel insurance plans are usually aimed at independent contractors and small business owners, as most large employers are likely to have travel insurance plans in place to cover work-related trips for employees,” adds Friedlander.
Examples of business travel insurance
Below are three hypothetical scenarios that highlight the value of getting on-site insurance.
1. You must cancel your trip at the end
“Let’s say you have a set of business travel policies with trip cancellation/disruption coverage. “The day before a flight, your near-kin has a medical emergency and you will have to cancel your trip to take care of them. If you pay $500 for round-trip airfares, $1,000 for a five-day hotel stay, and $300 for a five-day rental, the insurance company must respect the total $1,800 claim, unless the costs are paid repeatedly.
2. You will be in a medical emergency
“Imagine an employee traveling for business in Germany who gets unexpectedly ill and needs medical attention,” says Albertynas. “The costs incurred may include doctor consultations, prescription medications, hospitalizations and necessary medical tests. In this scenario, the total employee medical expenses can be 1,950 euros or more. Travel insurance covers these costs and ensures that employees are not covered by unexpected medical expenses during their trip.”
3. Your luggage is late
Assume that your suitcase gets lost or delayed by the airline and you will have to pay extra money from your pocket for clothing, medicines and toiletries. Your policy must cover your expenses up to a specified amount. “Before the baggage delay coverage begins, remember that business travel insurance often has a waiting period — usually about 12 hours,” continues Albertynas.
Average cost of on-site insurance
Travel insurance generally runs around 5-7% of the total travel cost. “For example, a $3,000 travel insurance costs $150 to $180 for the policy’s premium,” Friedlander says.
What you pay will vary based on policy type, destination, coverage inclusion, age and other factors. Schrage said, “While basic travel interruption/cancellation coverage costs between $10 and $20 per day, a more comprehensive policy can cost over $50 per day. Voluntary cancellations known as CFAR policies cost between 50% and 100% more than policies that only cover unwilling cancellations.”
Choosing a higher deductible can reduce your premium, but if you need to make a claim, you can pay more.
“For example, choosing a $200 deduction means paying that amount before coverage begins. Out-of-pocket, coinsurance, and out-of-pocket costs refer to costs beyond the coverage limit,” says Albertynas. “It’s important to carefully review all policy details and premium estimates and understand the relevant trade-offs, so you can choose the right plan while balancing premium, deductibles and additional costs.”
Does a credit card offer business travel insurance?
Getting travel insurance is almost always a smart idea. But the truth is, if the credit card provided by some cards already includes free coverage, it may be an unnecessary expense.
“Many business credit cards offer generous business travel coverage at no out-of-pocket costs. As long as you pay eligible travel expenses using your credit card, this is a better deal than buying your policy individually.”
– Andrew Schrage, CEO of Money Crashers in Boston
The most common types of coverage included in business travel insurance provided by credit cards are trip interruptions/cancellations, accidental death and demolition, and car rental loss/damage.
Some of Bankrate’s top business cards include travel insurance, including Ink BusinessPreferred® credit cards, which offers $10,000 per trip for cancellation or suspension coverage. American Express’ BusinessPlatinumCard® also offers travel interruption and cancellation insurance, as well as flight delay insurance, baggage delay insurance, and travel accident insurance.
However, please read the terms and conditions carefully, depending on the coverage provided by the card. It may be worth paying for another policy.
“Before assuming that your trip is fully covered, you do math by looking at the limits of each coverage type. For example, if the non-refundable portion of your trip costs $10,000, and your policy only offers $5,000 suspension/cancellation coverage, you can pay a pocket of at least $5,000.
Conclusion
If you travel frequently for work, it is worth it if you travel frequently for business trips. Especially, you spend a lot of money on business trips, international travel, or high-risk countries, and there is no coverage offered by your employer or travel credit card.
“But not all business travel policies are the same,” adds Friedlander. “It’s wise to read detailed prints of your policy, so you can clearly understand what’s covered and what’s excluded.”
