Travel insurance plans provide a safety net in the event of a disaster, emergency, or unforeseen travel disruption. Whether designed for leisure travelers or added to a corporate travel program, travel insurance covers a range of common (and not-so-common) risks and financial losses that can be incurred during travel.
For corporate travel programs that aim to be efficient and generate a high return for the businesses that manage them, even small disruptions to itineraries can have major consequences. Problems with hotels, flights, and baggage, as well as personal item loss can be mitigated with insurance programs that lessen the financial sting of disruptions ranging from an inconvenience to a serious emergency.
What Travel Insurance Covers
Travel insurance can be acquired through travel advisors and companies, premium travel credit cards, and insurance companies. Corporate or group travel insurance programs combine several types of coverage in a single package. Other plans are more customizable, allowing you to add and subtract policies as needed. Comprehensive plans cover the items most important to corporate travel programs, including canceled and delayed trips. Add-on policies for expanded coverage to suit the unique needs of your travel program may also be available. Policies can cover:
- Trip delay
- Medical emergencies
- Emergency evacuation
- Delayed or lost baggage
- Lost personal effects
- 24/7 assistance
- Life insurance
- Accidental death or dismemberment
- CFAR (Cancel for Any Reason)
- Rental car insurance
Types of Travel Insurance
Trip cancellation insurance is standard on most travel insurance policies. It partially or fully reimburses you for pre-paid and non-refundable travel expenses if your trip is canceled for some unforeseen covered reason such as illness or weather. Cancellation insurance can be especially useful during winter months in regions that experience annual inclement weather, providing the flexibility all successful travel programs need. For instance, comprehensive travel covers canceled flights that delay trips for three to 12 hours.
CFAR policies take coverage a step further by guaranteeing partial or full reimbursement for any reason, even those not typically covered by comprehensive travel insurance policies. CFAR coverage can be purchased as an add-on to some trip cancellation plans.
Similar to cancellation insurance is trip delay insurance, which covers out-of-pocket expenses incurred when a flight or other transportation is delayed due to weather or another unforeseen event. Trip delay insurance can help cover meals, unplanned hotel stays, and transportation in case a trip delay like a flight cancellation leaves you stranded before you reach your destination.
To curb the cost of care if employees are affected by a medical issue while traveling, get travel medical coverage. Travel medical insurance covers medical expenses incurred while traveling internationally or outside of your domestic health insurance network. This coverage is not designed to cover routine expenses, but instead, is aimed at protecting you in event of unexpected emergencies including evacuation for medical care in your home country.
Travel medical insurance is also helpful in international locations where medical costs are high for foreign visitors. This includes some European countries, where healthcare is publicly funded by citizens, therefore requiring travelers to pay for medical services out-of-pocket. If traveling to a developing nation, travel medical coverage can ensure access to higher-quality healthcare.
Be forewarned, travel medical insurance is unlikely to cover illnesses caused by pandemics. This is true for COVID-19 and any other active or future pandemics.
Baggage loss insurance provides enhanced coverage in the event that your luggage is lost, stolen, or damaged in transport. This coverage reimburses you for the value of items lost or damaged. It may also provide coverage for items that are delayed.
However, policies usually don’t cover high-value personal effects, and plans often set limits for how much they will reimburse. But baggage loss plans offer quick turnaround, often reimbursing travelers within 12 to 24 hours. Coverage amounts can range anywhere from a few hundred dollars to a few thousand. Airlines may not only take several weeks to process lost baggage claims but often have a lower reimbursement rate compared with travel insurers.
Accidental Death or Dismemberment
Policies with accidental death coverage pay the beneficiaries of your plan in case of death or severe injury while traveling. Some policies cover the entire period while travelers are away, while others cover loss under specific circumstances, like when traveling by plane. While some travel insurance policies offer life insurance as part of a comprehensive plan, additional accidental death benefits may be necessary.
Rental Car Insurance
Rental cars are not always covered under personal vehicle insurance plans. It’s therefore necessary to purchase coverage when renting. However, rental company insurance can be expensive and limited, leaving businesses with travel programs exposed to liability in the event of an employee accident. Travel insurers often offer robust roadside assistance plans and even cover travelers driving abroad. Car rental insurance can be added as an option to your comprehensive plan, or may come included.