Travel traps

Any cautious person would know never to sign any document without first reading the fine print. Does HR do the same when it comes to corporate travel insurance policies and related documents? HRM exposes the travel traps that lurk in the fine print

Preparation before business travel is necessary for two reasons. “The first is cost savings [as] preparation can change an adverse situation into a manageable one, which further translates into savings of time, money, and even lives,” says Greg Treasure, Managing Director (Asia Pacific), HRG Worldwide. “The other reason is that it helps to reduce risk exposure by lowering the chance of exposing travellers to financial, health or safety risks when they are in foreign countries.”

Companies should ensure that reasonable precautions, such as travel bans to extremely high-risk countries, are taken into account in order to fulfil their obligatory duty of care towards their employees. Business trips should also be approved by respective authorities within the company, especially if the trip is to a high-risk destination. In addition to this, companies should also make sure that they have a copy of the traveller’s itinerary to ensure that the traveller can be contacted during emergencies.

To further the protection of travellers, companies should provide employees before departure with an emergency contact number or a process that allows them to seek assistance during adverse situations in foreign countries.

Buying the right type of travel insurance is a big part of business trip planning. There was a time when travel insurance was something everyone knew about but rarely purchased. It was considered an added business cost when staff had to go on corporate trips. However, with recent cases of passengers stranded at airports due to flight cancellations, natural and man-made disasters in the destination country and other such occurrences, travel insurance has become a norm in the business world. For instance, travel insurance purchases are up 300% over the past three to four years in the US alone.

 

What works

There are two main types of travel insurance: trip protection, including medical coverage, and luggage/car rental protection.

Trip protection, the most common type of insurance, covers employees’ out-of-pocket expenses should something go wrong before or during their trip. It can be broken down into four parts, beginning with cancellation coverage. If an unforeseen event such as illness forces your staff to cancel their trip, travel insurance can help cover non-refundable expenses like plane tickets and hotel cancellation fees.

Delay coverage is for transportation delays, such as flights grounded due to heavy snowfall. An overnight stay in a hotel and the purchase of some basic necessities would be covered up to a certain limit.

If a business trip happens to be cut short due to bad weather, travel company bankruptcy or an airline strike, for example, trip interruption protection makes sure employees are covered.

The last type of protection coverage is emergency evacuation insurance, which provides staff with 24-hour assistance and emergency evacuation. For instance, during the uprising in Egypt and nuclear disaster in Japan, companies such as Access America, Travel Guard and International SOS moved quickly to assist customers with emergency travel arrangements, embassy or consulate referrals and emergency translations. It’s typically included under medical coverage, but can also be purchased as a standalone policy.

Luggage/car rental protection covers an employee’s rental car in the event of an accident and baggage and personal items if they’re lost, damaged or stolen. This kind of policy usually doesn’t cover loss or damage in flight.

 

Fine print

With so many types of travel insurance being offered, how can HR step up and pick the most appropriate one for staff? HR definitely needs to be a discerning buyer of travel insurance.

According to online travel guide The Independent Traveller, some causes of trip cancellations that might not be covered are:

»        Labour unrest or strikes

»        Financial difficulties on the part of the traveller, an immediate family member or travelling companion

»        Any business or contractual obligations of the traveller

»        Normal pregnancy or resulting childbirth

»        Mountain climbing, bungee cord jumping, skydiving, parachuting or travel on any air-supported device, other than on a regularly scheduled airline

»        Any event that occurs prior to the effective date of the insurance

“With regards to travel insurance, companies have to be mindful of the complexity of insurance claims. Underwriters can easily reject claims if the required documentations or processes are not followed through accordingly,” Treasure says. “Also, specific situation/coverage is usually mentioned to protect the underwriter against claimable amounts.”

Thus, he believes it is the job of HR to make sure that the specifics in fine print on travel insurance policies are of reasonable acceptance to the insured.

 

 

Case Study

Crisis hotline

Following the recent disaster in Japan, Allianz Global Assistance set up a service and emergency management office for the employees of German companies in Japan and surrounding Asian countries to field questions about radiation and radiation poisoning.

Specialists in nuclear medicine answer the hotlines. Trained as both doctors and physicists, they are there to give partner company employees advice on the issues causing them uncertainty during and after stints abroad in affected regions. The specialists can answer questions such as: how would an expert assess particular symptoms? Is it advisable or necessary to leave the country? Can an examination by a specialist be organised? This hotline – the first of its type in Germany – is manned around the clock.

This crisis service is targeted at all companies that make business trips and send employees to the Asian region. Once a partner has signed a contract for the service, the hotline is activated within a few hours.

 

Tips on choosing travel insurance

Peter Greenberg, Travel Editor for CBS News, suggests the following strategies to make business travel a treat, not a threat:

+       Never purchase insurance from your travel provider, such as a tour company or cruise line. If they go belly-up, there goes your staff’s policy.

+       Don’t forget about car rental and medical coverage. Contact your corporate credit card company to confirm what may already be covered. But remember, employees’ personal medical insurance isn’t valid overseas.

+       In many policies, civil unrest is an exclusion which means workers won’t be covered. Other common exclusions include acts of terrorism, or cancelling a trip because the employee is afraid to travel (unless you’ve purchased the very pricey “cancel anytime” policy).

+       Emergency assistance and covered benefits are two different things. Make sure that your travel insurance provider has 24-hour access so that staff have someone to contact should things go wrong.

+       Comparison shop. You can compare different policies and providers through resources like insuremytrip.com or squaremouth.com.

 

Case Study

Flight policy

 

When booking the flights and local transportation arrangements (such as rental car or concierge pick-up service), HR must ensure that key personnel do not travel together (on the same flight, for instance), according to MHC Asia.

“This is because in the event of a catastrophic accident, entire senior management members of a company may be wiped out,” says Benjamin Kuan, COO of MHC Asia.

A case in point was a plane crash in West Africa in June last year. The entire management board of Sundance Resources, a prominent mining company in Australia, was killed in the accident, leaving the company in crisis. The country’s richest man, billionaire tycoon Ken Talbot, also perished.

The Sundance team had travelled to West Africa as part of plans to expand its operations in the region. The tragedy prompted the suspension of the company’s shares on the Australian Stock Exchange while a new management team was assembled.

 

 

Analysing the Workday advantage

Sandeep Aggarwal, Chief Financial Officer of Aon-Hewitt Asia-Pacific, shares his thoughts on the Workday finance and HR analytics platform. He says the cloud-based system is intuitive and easy-to-use, but still provides powerful insights across the functions.

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