Are you insured when you travel on business?
This article first appeared in the 1st quarter 2019 issue of Personal Finance magazine.
Who wouldn’t want international travel to be part of their job description? Most people consider business travel a status symbol and a perk of the job – in fact, according to a survey by the accommodation website Booking.com for Business, 30 percent of people who travel on business would take a job at a lower salary if they could travel more. Similar research by the website LateRooms.com indicates that 41 percent of workers want to do more business travel.
This suggests that company bosses may be underestimating the value of business travel as an incentive and an element of remuneration. The Booking.com research shows that more and more employees are blurring the line between business and leisure by extending trips to include leave time in overseas destinations. Nearly half (49 percent) of respondents in the Booking.com survey had done so in the previous 12 months and a third of them intended to do so again at the earliest opportunity. In fact, the trend is so well established that it has earned a name: “bleisure”.
So, if you were asked to participate in a conference in the United States or attend a meeting with a prospective client in Japan, we can safely assume you would jump at it. If you were paying, you might be inclined to protect yourself by taking out travel insurance, but when your employer makes the travel arrangements and bears the cost, it’s easy to assume you have the company’s financial backing whatever happens. But do you? And to what extent?
What if you were to pick up the latest flu bug on a flight (all too common) and become too ill to stick to your itinerary? Or you were grounded for several days by bad weather? Or your luggage went astray, taking all your technology and your expensive business wardrobe with it? Even low-risk travel moments can wreak havoc with a business trip: a woman I know was injured in an accident while a passenger in a black cab in London – probably the safest form of transport on the planet. Another traveller had a prolonged stay in Italy after tripping over a half-packed suitcase on his way to the bathroom and breaking his leg in two places.
The possibilities are endless: flight disruptions happen, health issues have no respect for geography and tight schedules in unfamiliar places increase the likelihood of mishaps. You are the one taking the risks, so don’t take anything for granted – even the level of protection provided by your employer when you represent the company abroad.
A world of trouble
Happily for those survey respondents who hanker for more travel, globalisation means there is more globe-trotting to go round and it’s more likely to take you to remote places. Inevitably, that means more exposure to unfamiliar and unpredictable environments and a greater likelihood of climate extremes and dietary challenges – in other words, more risk. The global travel risk management company On Call International sums up the state of the world as “VUCA”: volatile, uncertain, complex and ambiguous.
According to the 2016 Global Advisor study by the UK market research company Ipsos, ill health is the chief disrupter of travel and the risk that prompts most travel insurance sales. Almost three quarters (71 percent) of senior business executives reported experiencing a health problem while travelling and this category of traveller listed his or her main concerns as stomach and/or gastrointestinal problems, flu and/or contagious diseases, and environment-specific problems such as altitude sickness, air pollution and heat exposure. Insect-borne diseases such as malaria, dengue and yellow fever were also significant causes of worry.
The British trade magazine Buying Business Travel says data from travel assistance companies shows that health risks are two of the top three risks faced by travellers: petty crime comes first (a much greater risk than violent crime), followed by road accidents and food poisoning. The road accident statistics are particularly surprising: according to World Health Organisation (WHO) figures, there are more road fatalities in China in any given period than there are in the whole of Africa and more deaths per 100 000 vehicles in the tourist hotspots of Nepal and Jordan than in war-torn Iraq.
That the world is becoming more dangerous generally is supported by another Ipsos survey, Dangerous World, published in mid-2017, in which 86 percent of respondents in 25 countries agreed that the world had become more dangerous over the previous year. When it comes to acts of terror and natural disasters, the UK-based online business magazine Raconteur says the risk of being caught up in an act of terror or a natural disaster while travelling remains small, but “greater vigilance” is needed after all the terrorist attacks in European cities – including London, Manchester, Paris, Nice, Brussels and Barcelona – between 2014 and 2016.
The magazine quotes a 2018 survey by American Express’s Global Business Travel division which found that “roughly one in five travellers from the UK, Germany, France, India and Singapore had to reschedule or postpone business trips in the last year due to concerns over travel safety”. Among UK travellers, 61 percent said they worried about the increasing prevalence of severe weather events and 52 percent were concerned about their security in one or more of the countries they had visited in the preceding year.
Another survey by the Global Business Travel Association, a professional body in the US representing corporate travel planners, found that female business travellers face greater personal safety risks, yet only 18 percent of corporate travel policies take such threats into account, despite the fact that many more women are travelling for business than five years ago.
Not only do most companies fail to provide an emergency hotline for business travellers generally, according to the survey report, but they don’t consider obvious safety features for female employees, such as chauffeur-driven transport, hotels with 24-hour security and rooms located on upper floors with double locks on the doors.
If disaster strikes in a strange country, the last thing you need is unsettling questions about how you will pay for medical treatment, or cover the costs of unplanned accommodation, cancelled flights and/or lost luggage. In countries like the US – where medical costs are so high that insurers’ quotations differentiate between “the world excluding the US” and the “world including the US” – the anxiety associated with seeking treatment can be as traumatic as the injury or illness that makes it necessary. Yet my straw poll of people who travel on business, including to the US, indicated that few receive information from their employers on risk cover, or raise the issue before departure.
For employers, the costs of supporting an employee who gets into trouble in a foreign country can be ruinous financially and reputationally, so comprehensive insurance should be a given. Employers do have a “duty of care” when it comes to the health and safety of employees in terms of both common law and legislation (see “Duty of care”, page xx), but this relates primarily to environments and lines of work that are physical or dangerous, so there is no specific guidance on the duty of employers when employees travel for business. However, that doesn’t absolve the employer from the obligation to ensure a safe working environment by, for example, providing safe accommodation and transport and ensuring the employee has the relevant vaccinations, says Steven Adams, a senior associate in Cliffe Dekker Hofmeyr's employment law department.
“Reasonable measures to ensure an employee's safety would be determined by the particular circumstances of the assignment,” he says. “Relevant factors might include the nature of the assignment, the political climate in the country the employee is visiting, crime levels and whether the travel infrastructure generally is safe.”
While corporations and large global companies tend to have established protocols for business travel – for their own protection, as much as that of their employees – smaller businesses may take chances, or rely on the automatic basic travel insurance credit cards provide. Credit card insurance varies widely, depending on the card provider and the status of the card, so it is important to see the detail and examine it in the context of the travel itinerary.
Limitations of cover
Santam’s travel insurance division, Travel Insurance Consultants (TIC), gives this advice on its website: “Credit cards in South Africa generally provide limited travel insurance cover, specifically for medical-related expenses and accidents. However, this is insufficient when you consider the high cost of medical treatment overseas.
Travellers should investigate how much cover their credit card provides and whether they need additional cover.
Select a comprehensive policy if any travellers:
- require higher medical cover
- want cover for flight cancellations
- want cover for lost luggage
- require cover for pre-existing medical conditions.
(For more on credit card travel insurance, see Personal Finance magazine 1st quarter 2016 or go to https://www.iol.co.za/personal-finance/my-money/banking/how-good-is-credit-card-travel-insurance)
Ross Pallatt, managing director of TravelNow, which specialises in corporate and group travel into and out of South Africa, says automatic credit card insurance has proved to be more than adequate for the low-risk traveller looking for medical cover for unforeseeable injuries and illnesses.
“Of course there are always exceptions to the rule, when serious injuries occur outside of the scope of cover, but these are few and far between. And you must be aware of the scope of cover. If you are going to be involved in a risky team-building excursion that could result in an injury, or you are scheduled to test drive a racing car, you’ll need extra cover,” he says.
And he echoes TIC’s warning that pre-existing conditions do not qualify as “low-risk” no matter how fit you feel. They are invariably excluded from basic credit card insurance, so if you have a chronic condition – ranging from heart disease to an allergy to bee stings – you need to check that the credit card insurance that covers your travel includes any medical treatment and related expenses that might arise from that condition.
Standard Bank’s card division defines a pre-existing condition as “any medical condition for which an insured person has received treatment or advice, or recommendation for treatment, at any time prior to commencement of a journey.” Cover of between R100 000 and R250 000 is available on its three optional products, providing you are “hospitalised as an in-patient, following medical advice, for more than 48 hours”.
To be covered for a pre-existing condition by FNB’s travel insurance, you must have an FNB Gold, Premier, Private Clients or Business card, or have upgraded to the Comprehensive travel insurance option. Cover is available to a maximum of R500 000 for hospital treatment and related needs, such as medical transportation, evacuation, repatriation and a “compassionate emergency visit” by a relative.
Such policies are worth examining for risks you hadn’t considered too – such expenses related to identity theft and the cost of leaving your pets in kennels and/or a cattery if you arrive home more than 24 hours later than scheduled. More importantly, they will also compensate you for lost luggage, which Pallatt says is a growing concern, “particularly if luggage transits OR Tambo”.
Again, the basic level of automatic insurance through Standard Bank’s card division offers nothing at all for lost luggage, while the Platinum and Titanium cards offer R2 000 and R3 500 respectively for baggage delays, with an excess to pay of R500. For compensation for theft or damage of baggage, you’d need to be covered by one of the optional policies, which provide between R7 500 and R20 000 compensation per bag, depending on the policy, with a limit of between R1 500 and R2 000 for a single lost item.
FNB’s entry-level Classic card offers no compensation for luggage losses, while the Comprehensive policy option provides cover of R5 000 for the contents of luggage (with a R1 250 limit for individual items) and R1 500 for lost cash and documents – both with an excess to pay of R350. If your luggage is delayed for more than six hours, you are entitled to R2 000 compensation.
SAA’s Voyager Premium credit card offers better cover at a maximum of R15 000 for baggage stolen or damaged and a R3 750 limit on the value of a single item stolen or damaged. Lost baggage is valued at R3 750 or R1 000 for a single item. The excess in all cases is R500.
Given the weakness of the rand, none of these payouts can be considered generous – or even remotely adequate – if you have to replace clothing, accessories, toiletries, etc. If your luggage is worth more to you, shop around. Bryte Travel Insurance, provider to Absa’s card division and a leader in the market, has a Business policy that provides R35 000 for lost luggage, R1 000 for lost travel documents and passport and R3 500 for delayed baggage.
“Ultimately, it is the passenger’s responsibility to assess the risk and the level of insurance cover and decide whether cover is adequate or not,” says Pallatt. “If your luggage contains company property, enquire about the value and the consequences of your luggage going astray. If you are asked to go to countries like Pakistan, Nigeria or Egypt, all of which were ranked among the most dangerous countries in the world by the World Economic Forum in 2017, you should be briefed about the risks. Ideally, your employer should make sure you have support in that country, from a travel agent or business contact.
“If you feel uncomfortable with the level of insurance provided for any reason – including a pre-existing medical condition your employer may not be aware of – the buck starts with you: you need to demand better cover from your employer,” he says. “Or fork out some cash and buy your own policy, so you have peace of mind. I know this will not be a popular view, but travel does require initiative and independence and adults should be responsible for their own wellbeing at all times.”
A back-up plan
Insurers divide claims into two categories, medical and inconvenience, although “inconvenience” seems a callous understatement for some of the non-medical catastrophes that travellers suffer. I once saw a young German man put his small shoulder bag down on a New York pavement for a moment before boarding a bus to JFK airport … and when he looked down again, it was gone. He got on the bus anyway in a state somewhere between disorientation and panic; what was he going to do at the airport? He spoke very little English and every dollar, proof of identity and travel document he had was in that bag. He had no idea who to call, or how he would make that call without a mobile phone.
All travellers should have someone they can contact at any hour of the day or night wherever they are and travel insurers provide 24/7 emergency assistance, as long as you, or someone with you, can make the call – reversing the charges if necessary. All automatic card insurance provides access to the insurance provider’s emergency services free of charge – for example, using Standard Bank’s credit card insurance provided by AIG, the following:
- Cash assistance
- Consular referral
- Emergency travel and accommodation arrangements
- Premature return in case of death or imminent death of a relative or business associate
- Transmission of urgent messages
- Replacement of lost travel documents
- Legal assistance abroad
Bryte has partnered with World Travel Protection to form Bryte Travel Assist, offering support in medical and other emergencies. “A team of physicians, registered nurses and emergency assistance specialists provide a multilingual 24-hour service seven days a week,” says Anrieth Symon, Head of Travel at Bryte Insurance. “The team arranges referrals to doctors or hospitals, monitors medical care and co-ordinates repatriation to lessen the stress and inconvenience in a tragic situation.”
Of course, it’s a good idea not to put all your eggs in one basket to start with: have a credit card in your suitcase if the rest of your money is in your backpack, have dual identity documents in different places, and make sure you have electronic and paper versions of your travel documents to reduce the likelihood of losing everything.
Duty of care
Steven Adams, a Senior Associate in Cliffe Dekker Hofmeyr's employment law department, says an employer has a duty to provide a safe working environment for its employees in terms of both common law (custom and judicial precedent, rather than legislation) and the Occupational Health and Safety Act 85 of 1993 ("OHASA") and the Compensation for Occupational Injuries and Diseases Act ("COIDA").
“OHASA and its various regulations establish the minimum safety standards with which an employer must comply. COIDA provides no-fault compensation for disablement or death caused by occupational injuries or disease sustained or contracted by employees in the course of their employment,” says Adams.
COIDA applies only where an employer chooses to protect itself against liability for damages by making regular contributions to the compensation fund. Employees then makes damages claims against the fund, instead of the employer, and can receive compensation without having to prove that someone’s negligence caused the accident or illness.
Clearly, staff travelling on business are subject to risks over which the employer has no control even with the best available travel plans: schedule disruptions, accidents, illness, unpredictable political events, weather events, terrorist attacks, and so on.
“If an employee suffers an accident while working abroad, the employee would still be able to institute a claim against the compensation fund in terms of section 23 of COIDA,” says Adams. “This section provides that if an employee ordinarily employed in the Republic of South Africa has an accident while temporarily employed outside of the republic, such an employee will still be entitled to compensation as if the accident had occurred in South Africa.”
It makes sense to combine business and leisure travel, but then employers and employees have a duty to each other, according to American Express’s Global Business Travel division.
Businesses have a duty of care towards their globetrotting employees, but if staff have the privilege of adding a component of leisure travel to the business trip, there’s an argument that they have a corresponding duty of loyalty to their employers.
According to an article on the Amex Global Business Travel website, employees on “bleisure” travel should “refrain from activities and behaviors that would be contrary to their employers’ best interests”.
The article argues that companies should adopt “duty of loyalty” rules that set clear boundaries around activities that could be potentially high-risk, life-threatening or reflect poorly on the company while travellers are on a business trip, whether it has a leisure component or not. In their turn, employers should be transparent about the cover they provide for both the business and leisure segments of the travel, says Amex, so that employees can take out their own insurance where there are shortfalls – for example, if the are planning adventure pursuits. They should also have the employee’s total itinerary on record, so they know where employees are at all times.
“Even when travellers do get to enjoy their own personal time during a business trip, it should not be forgotten that they landed in that destination because of work, and their professional hat really should never be set down when travelling on (mostly) the company’s dime,” says Amex.
What happens if an employee is injured or robbed during leisure time – for example, while sightseeing at the end of the business trip? There is no blanket rule, but generally speaking, activities qualify as “business” if they are part of the business-travel itinerary, says Steven Adams, employment law specialist at law firm Cliffe Dekker Hofmeyr. If the employee extends the trip into his or her own time and introduces new risks in the process – by going skiing, for example – he or she might need to take out extra cover.