Business travel nosedived in 2020 because of the COVID-19 pandemic. Eventually, companies and organizations will return to traveling around the country and the world to conduct important business face-to-face.
To prepare for more business travel, now may be a great time to review your Business Travel Accident Insurance policy or to consider adding this coverage to protect your employees and your company from potential losses.
Business Travel Accident (BTA) Insurance provides insurance coverage for a company’s employees while they are traveling on business. This type of accident insurance pays a benefit to an employee or their beneficiaries if the employee is seriously injured or killed while traveling for the company.
BTA policies are carried by companies that have key employees who frequently travel to meet clients, between different sites within the company, and/or on offshore assignments. Premiums are paid by the employer, but benefits are paid directly to employees or their beneficiaries.
BTA protection can help offset the risk and potential loss of key employees who frequently travel. They also provide a pseudo-life insurance policy in the event an employee is accidentally killed during travel; a policy can help replace the lost income and provide it to the employee’s family.
Although BTA is typically purchased by companies to cover their employees, some travelers purchase policies on themselves. Examples include people who travel to potentially dangerous places such as journalists, politicians, and missionaries.
BTA coverage is a way for companies to fulfill their duty of care obligations to employees while they’re traveling on their behalf. Duty of care refers to the steps that managers and companies should take to reasonably ensure their employees’ health, safety, and wellbeing.
Many carriers have industry-specific programs that address some of the specific risks posed by travel in those lines of work. Carriers may offer programs designed specifically for law enforcement, health care, education, and other professions, in addition to their customizable standard policies.
Traditionally, BTA insurance was a form of accidental death and dismemberment insurance. Policies provided benefits if employees died or were dismembered while traveling on business.
BTA policies now cover additional expenses, namely medical costs for both accidents and illnesses that occur during business travel. These more comprehensive policies also provide:
- Benefits for permanent disabilities
- Emergency air evacuation
- Repatriation of remains
- 24-hour travel assistance
- Medical benefits when outside the country
With exception of policy exclusions (see below), it doesn’t matter how an injury or illness occurred. You could be injured or killed in a plane crash, car accident, natural disaster, or just a simple fall down a flight of stairs.
Another common benefit of BTA insurance is Business and Pleasure coverage. This covers an employee who is injured participating in a recreational activity while on a business trip. For example, an employee goes on a weeklong business trip and goes skiing one afternoon during that trip. They break a leg. A policy with Business and Pleasure coverage will cover medical expenses for that skiing accident even though it didn’t occur in the course of working.
Some optional coverages on BTA policies may include:
- Coverage for spouses and children who accompany the employee on a business trip
- Benefits in the event an employee is kidnapped and ransomed during a business trip
- Reimbursements for expenses arising from travel delays or cancellations
- Benefits to cover costs related to evacuations that occur during a business trip, such as for political uprisings or natural disasters
- Coverage for injuries or death related to terrorism or act of war during business travel
- Foreign workers compensation
Many BTA policies also have exclusions. These are scenarios in which the policy will not provide benefits. Common exclusions include injury or death sustained while the covered employee is:
- Committing or attempting suicide
- Serving on active military duty
- Under the influence of drugs or alcohol
- Committing a crime
- Distracted while driving by using a mobile device
- Traveling to an area considered too risky, either by the policy or by the U.S. State Department
- Participating in extreme sports or extra hazardous activities as defined in the policy
Benefit amounts are often tied to the covered employee’s salary. For example, one policy example stated that if an employee died during company business travel, it would pay a death benefit equal to five times their salary, up to a maximum of $2 million.
More basic plans provide a standard benefit amount or a percentage of the expense incurred. For example, a plan might provide a standard $250,000 for accidental death and dismemberment, and pay 100 percent of the cost of an emergency evacuation.
You should be able to choose among many coverage amount options. The higher your coverages, the more you will pay in premium.
BTA insurance is relatively inexpensive on a per-employee basis. Companies that want to have this coverage can buy it for as little as $4 per year per covered employee. However, providers typically will require a minimum amount of premium per year, meaning you would need to cover a minimum number of employees to qualify. For example, if the carrier charges $5 a year per employee, but has a minimum of $750 in annual premium, the company would need to cover at least 150 employees to qualify for coverage.
Premium amounts are based on the following criteria:
- Total employees covered
- Estimated total travel days
- Optional coverages requested
- Benefits requested
- Coverage locations
BTA insurance can help protect the financial well-being of a business. The company’s BTA carrier assumes the risk that comes with its executives and employees traveling across the country and to other countries. This includes covering large medical bills and the cost of potential lawsuits filed by employees or their families who are injured or killed while traveling on business.
BTA insurance is also a great way to give employees the assurance that if something bad does happen on a business trip, they’ll be covered. This helps employees focus more on the purpose of business travel rather than the possible risks.
Jack Wolstenholm is the head of content at Breeze.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.