What is business travel insurance?

Written by
Geoff Williams
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If you’re going on a big business trip, especially one that takes you across the globe, you have a million things to think about, from what time to get to the airport, to questions about currency and how you’re going to land this deal. You probably aren’t thinking about business travel insurance.

But maybe you should. Would it financially destroy you if something went wrong on your trip, like wrecking your rental car? What if you had an employee who became gravely ill halfway around the world? Would you mind incurring the cost to keep that employee in a hospital for a few weeks while they improve?

Business travel insurance is something to think about having for any business trip, and so we’ll try to unpack it all, before you finish packing.

What, exactly, is business travel insurance?

A business travel insurance policy is similar to a personal travel insurance policy. It’s an insurance product that is designed to reimburse your costs if something goes wrong, such as lost luggage or needing to cancel nonrefundable airfare.

Business travel insurance is essentially exactly what travel insurance is for a vacationer, only what’s covered is often tailored to the business owner. For instance, if you’re on a business trip, and your company suddenly has a massive product recall, and you need to return to your office immediately, your business travel insurance policy might reimburse you for the costs you eat during that specific scenario (it all depends, of course, on what your policy covers).

Basically, a business travel insurance policy tailors its insurance policy to cover scenarios that might affect a business trip. When it comes to travel insurance for businesses, some of the best policies cover just about everything, including civil unrest and acts of terrorism (but check the policy; it may not cover that).

Many elite business travel insurance policies won’t cover being kidnapped on a business trip (yeah, that can happen), but if you’re worried about that, you could buy kidnap and ransom coverage. Yes, there’s insurance for just about everything.

Who should get business travel insurance?

Anyone who is paying for an expensive business trip should at least consider getting business travel insurance.

You may not need to get it, however. For starters, if you have business credit cards, they may offer ample coverage for your needs.

Still, you’ll want to take a look at your card’s terms and conditions; there’s probably a limit to how much they’ll reimburse you each year. If your card reimburses you for $5,000 worth of expenses every year for cancelled or interrupted trips, and your next international business destination is expected to run around $9,000, you won’t be fully covered. Meanwhile, if your business spends a lot on travel every year, like $50,000 or $100,000, you could argue that you should get an actual business travel insurance policy from an insurance company and not only rely solely on your business credit card. Still, you may decide a special policy isn’t needed; some business credit cards offer pretty comprehensive travel insurance protections.

What benefits does business travel insurance provide?

Both business travel policies and business credit cards that have travel insurance offer a lot of protection, and some business credit cards can compete with business travel insurance policies, if it’s a top, elite business credit card.

Still, there’s one important distinction between travel insurance for businesses and the travel insurance protections that a business credit card offers. The business credit card generally protects your excursions when you have a receipt to go along with it. (That’s not always the case, though. Some credit cards offer travel protection if you, for instance, used the credit card to pay for a portion of the trip. But it’s a good guideline to consider.)

Let’s say you’re in some far-flung land, driving a rental car, and you get into a fender bender with another car, and several of your front teeth are knocked out (which, yeah, ouch). Your business travel insurance policy should certainly cover your medical treatment, and your business credit card’s travel insurance policy might, too, especially if you rented the car with your business credit card.

But if your client was driving you to a restaurant when the accident occurred, your business credit card likely wouldn’t come in handy unless you covered the cost of the car. However, if you have business travel insurance coverage, it would likely cover any medical expenses related to the accident.

Here are the five areas that business travel insurance policies and business credit cards often cover:

  • Trip cancellation or interruption insurance. As you would expect, if a business trip is scrubbed, and you have a lot of money tied up in airfare and hotels, your business travel policy or your business credit card (if it has travel insurance protection) should reimburse you if the trip is canceled for an eligible reason.
  • Baggage and personal items loss. What if your luggage, with all of your fancy clothes or laptop, never makes it to your hotel? And what if you need to dress to impress, and so you have to buy a new wardrobe? Your business travel insurance policy and business credit card with travel protection should cover the cost of your new clothes, within reason.
  • Medical insurance. This can be very important since often, your health insurance won’t cover you if you become ill or injured abroad. Because, sure, why would you want medical coverage when you go abroad? We all know nothing bad happens when we travel. So, yes, your business travel insurance policy should pay for a doctor’s visit or X-rays or whatever you need if you end up spraining your ankle after meeting a client in Bolivia. Your business credit card may not, however, as credit card travel insurance is usually limited when it comes to medical expenses.
  • Evacuation insurance. What if something worse than a sprained ankle happens? Maybe you have a heart attack in the middle of nowhere, and you need to be evacuated by a helicopter to a hospital far from wherever you collapsed. That type of medical transit costs a lot of money, and it might be nice to know that your business travel insurance policy has got that covered. And don’t just assume that your business credit card won’t have you covered; it may. Chase, for example, states in their fine print that an accidental bodily injury or sickness must be considered life threatening or require hospitalization for coverage to kick in. So again, it’s dependent on your card and coverage.
  • Life insurance. What if something worse than the heart attack happens? What if you check out for good? Your business travel insurance policy or business credit card may not cover a random heart attack. That’s what conventional life insurance would be for. But a business travel insurance policy or business credit card will sometimes cover things like an accidental death — or death because your rental car’s brakes went out or because your plane had an issue midflight. If that occurs, it may be some comfort in those last few moments to know that your loved ones will at least be somewhat financially protected and get a payout after everything goes black.

What to know about business travel insurance and your business credit card’s travel insurance

If you’re considering either getting a business travel insurance policy or applying for a business credit card that offers travel insurance, you’ll want to consider a few things.

Do not make assumptions about the policy. When it comes to travel insurance for businesses, whether a standalone policy or one offered through a credit card, never make blanket assumptions. Ever. There are generally going to be limitations and restrictions on any travel insurance product, or any insurance product, period. So read your policy.

Contact your benefits administrator if you have a problem. Sure, sometimes, if there’s an emergency, you do what you have to do and worry about how to pay for it later. But if you can, before you pay for something, call the benefits administrator, whether you have a business travel insurance policy or a business credit card. They may need to approve whatever you’re about to pay for, in order to get reimbursed.

The cost. Typically, you can expect a business trip insurance policy to add 5% to 7% of the total cost your trip. A business credit card, nothing – but there is no free lunch. Your annual fee covers the business travel insurance.

Bottom-line on business travel insurance

Travel insurance for businesses exists for a reason: things can go wrong on a business trip. The more expensive it’ll cost to get somewhere and back, and the more days you’ll be away, allowing for more time for something to go wrong, the more business owners should probably consider looking into getting either a business travel insurance policy or finding a good business credit card with travel insurance. You can pay either a little extra upfront, knowing that it’s probably a waste of money since everything will likely go fine, or possibly pay a whole lot later, if something does actually go wrong.

Geoff Williams
CardRatings Contributor

Geoff is a freelance journalist and has been since the 1990s. He specializes in personal finance and small business issues and has seen his work published with numerous news outlets including The Wall Street Journal, CNNMoney.com, Reuters, The Washington Post and Consumer Reports. He also...Read more

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