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- Business travel insurance reimburses particular unexpected expenses or financial losses you suffer before or during a trip for work.
- A travel insurance policy usually covers things like trip cancellation/interruption, medical costs, lost baggage, travel delays, lodging expenses and more.
- Costs for business travel insurance often run between 5 and 7 percent of the trip's total expense.
A lot can go wrong before or during a faraway meeting, out-of-state conference, remote office visit or other planned business trip. The airport can lose or damage your luggage. Your travel plans may need to be canceled suddenly due to a personal emergency. Or you could get sick while away from home.
For these and other reasons, it’s smart to consider business travel insurance. This coverage should safeguard you financially if you incur a covered setback prior to or while you’re traveling for work.
Find out more about business travel insurance, how it works, what is covered and not covered, who should get business travel insurance and if this level of coverage is worth it.
How does business travel insurance work?
You have insurance for your home, car and health care. You might even have life insurance coverage. But where do you turn if you want to protect yourself financially from a business trip setback? Fortunately, you can purchase business travel insurance, also called corporate travel insurance or business trip insurance.
“Business travel insurance is insurance coverage specifically designed to protect individuals traveling for a business-specific reason. It offers comprehensive protection against unexpected incidents and expenses that can occur during a business trip,” explains Mark Friedlander, director of Corporate Communications for the Insurance Information Institute in St. Johns, Florida.
Consider that many expenses related to an upcoming business trek have to be paid well in advance and are not refundable. That means if something happens that prevents you from traveling, you could be on the hook for hundreds if not thousands of dollars. That’s where having business travel insurance comes in handy.
“You can purchase a single-trip policy, which covers expenses that arise on a single trip — usually between travel date specified in advance,” Andrew Schrage, CEO of Money Crashers in Boston, notes. “Or, you can choose an annual or multi-trip policy that covers any eligible expenses that arise during the policy’s effective period — usually one year — regardless of how many trips you take during that time.”
What does business travel insurance cover?
Here’s what a standard business travel insurance policy typically covers, per Friedlander:
- Trip cancellation/interruption costs
- Expenses related to travel delays
- Medical bills incurred while traveling, including those related to COVID-19
- Missed connection assistance expenditures
- Costs and hassles related to lost baggage
- Car rental and lodging expenses
Stan Sandberg, co-founder of TravelInsurance.com, says many consumers opt for business trip insurance for the trip cancellation/interruption protections offered.
“Standard trip cancellation coverage will reimburse non-refundable, prepaid costs if an insured traveler has to cancel for a wide range of reasons, including getting sick unexpectedly,” he says.
Coverage for medical emergencies and health care away from home are other popular standard features in most plans.
“This is especially valuable for employees traveling abroad, where regular medical insurance might not apply. And individuals with chronic conditions can find coverage for flare ups during travel by declaring them before the business trip,” says Justin Albertynas, a travel industry expert and CEO of Ratepunk.
A business travel insurance policy doesn’t cover every possible expense, however. Among the typical exclusions are:
- Reasonably foreseen events
- Acts of war
- Declared epidemics and pandemics (by the World Health Organization and/or U.S. Centers for Disease Control and Prevention)
- Travel restrictions imposed by a government entity.
Who should get business travel insurance?
Good candidates for purchasing business travel insurance include those who frequently travel for work but are not already covered by their employer.
“As most large employers most likely have travel insurance plans in place to cover their employees’ work-related travel, individual business travel insurance plans are typically targeted to independent contractors and small business owners,” adds Friedlander.
Here are three hypothetical scenarios that underscore the value of having business trip insurance:
- Trip cancellation. “Let’s say you have a single-trip business travel policy with trip cancellation/interruption coverage that reimburses up to $5,000 in prepaid non-refundable expenses,” Schrage explains. “The day before your flight, an immediate family member has a medical emergency and you need to cancel your trip to care for them. If you paid $500 for round-trip airfare, $1,000 for a five-day hotel stay, and $300 for a five-day car rental, your insurer should honor a claim for $1,800 total, as long as the expenses are fully paid and not refundable by the vendor under any circumstances.”
- A medical emergency. “Imagine an employee traveling for business in Germany who unexpectedly falls ill and requires medical attention,” Albertynas says. “The incurred expenses may include a doctor’s consultation, prescription medications, hospital stay and necessary medical tests. In this scenario, the employee’s total medical expenses could add up to €1,950 or more. Business travel insurance could cover these costs, ensuring that the employee is not burdened by unexpected medical bills during their trip.”
- Baggage delay. Assume your suitcase gets lost or delayed by the airline and you need to pay extra money out of pocket for clothing, medicine and toiletries. Your policy should cover your expenses up to a predetermined amount. “Just keep in mind that business travel insurance policies often have a waiting period before coverage begins for baggage delays — typically around 12 hours,” Elbertynas continues.
The average cost of business travel insurance
Business trip insurance policies commonly run approximately 5 percent to 7 percent of the total cost of your trip. “For example, travel insurance for a $3,000 business trip would cost between $150 and $180 in premium for the policy,” Friedlander says.
What you will pay will depend on the type of policy, your destination, coverage inclusions, your age and other factors. Schrage adds, “Basic trip interruption/cancellation coverage can cost as little as $10 to $20 per day, while more comprehensive policies can cost $50 or more per day. Policies that cover voluntary cancellations, known as CFAR policies, cost 50 percent to 100 percent more than policies that cover involuntary cancellations only.”
Choosing a higher deductible can lower your premium, but you’ll pay more upfront if you have to make a claim.
“Opting for a $200 deductible, for example, means you will pay that amount before coverage starts. Co-pays, co-insurance and out-of-pocket expenses refer to costs beyond the coverage limits,” Albertynas says. “It’s important to carefully review all policy details and premium quotes and understand the trade-offs involved so you can select the right plan while balancing your premium, deductible and additional expenses.”
Do credit cards offer business travel insurance?
Getting trip insurance is almost always a smart idea. But the truth is, it might be an unnecessary expense if you already have free coverage included with your credit card, which some cards provide.
“Many business credit cards provide generous business travel coverage at no out-of-pocket cost. As long as you use your credit card to pay for eligible travel expenses, this is a better deal than buying a policy separately,” advises Schrage.
The most common types of coverage included in business travel insurance provided by a credit card include trip interruption/cancellation, accidental death and dismemberment, and rental car loss/damage.
“Before assuming your trip is covered in full, look at the limits for each coverage type and do the math. For example, if the non-refundable portion of the trip costs $10,000 and your policy only provides $5,000 in interruption/cancellation coverage, you’ll pay at least $5,000 out-of-pocket,” Schrage cautions.
The bottom line
Acquiring business travel insurance is worth it if you frequently travel for work — especially if you spend a lot on business trips, travel abroad or to riskier countries and don’t already have coverage provided by your employer or a credit card.
“But all business travel policies are not the same. It’s wise to read the fine print of your policy so you have a clear understanding of what’s covered and what’s excluded,” adds Friedlander.