This is content for Liberty International Underwriters
Natural disasters and crimes are what hit the headlines in stories about Australians running into difficulty overseas, but far and away the most common problem is medical issues.
“The claims we see under corporate travel are predominantly medical,” says James Needle, general manager of Fullerton Health Corporate Services, which helps corporate travellers and handles their claims on behalf of their insurers.
“We look after a number of financial services firms whose staff travel. They have a lot of executives who are typically males and 50-plus – there’s a lot of heart attacks.”
Needle says that because there is no Medicare in overseas locations, once a traveller is admitted to hospital “the meter starts running”, and these costs can mount rapidly.
For instance, if someone is hospitalised in the US, then the bill is likely to be a couple of hundred thousand dollars, at least, says Needle.
In 2015-16, the Department of Foreign Affairs and Trade (DFAT) assisted 1,667 cases of Australians hospitalised overseas, an increase of 15 percent from the previous year, according to a spokesman for DFAT.
The top five countries for Australians hospitalised during this period were Thailand (176 cases), Indonesia (153 cases), USA (122 cases), New Caledonia (75 cases) and Vietnam (72 cases). (The data does not separate business and leisure travellers.)
“Australians travelling overseas are encouraged to register their travel and take out appropriate travel insurance to cover any unexpected costs,” the spokesman said.
Needle says it’s not just in developed countries where costs mount. Travellers to more exotic locations where there isn’t adequate medical care might need to be evacuated.
“For example, you could have customers in Naru. If you’ve got anything there of any substance (which means you can’t get on a commercial airline), then you’re going to be working with the likes of CareFlight. You’re engaging their services and their medical teams to evacuate these people typically back to the east coast of Australia if they’re in the Pacific or Oceania.”
Costs vary. Evacuating someone from Naru to Brisbane could cost about $75,000, while from Timor to Darwin it’s about $35,000.
Evacuation from Africa, where many Australian mining executives and aid workers are based, is even more expensive, running to as much as $100,000.
Typically, insurers either have their own in-house 24-hour assistance service or they outsource it to an organisation such as Fullerton Health Corporate Services. These organisations approve the medical costs and coordinate the logistics of medical care or evacuations.
Having approval for expenses can be very important in the US, where many healthcare providers want an assurance that the bills will be met before they begin treatment. It is also important to closely monitor medical expenses in the US, because they can quickly mount.
While medical expenses make up the bulk of the cost of corporate travel expense claims, other common claims include lost luggage and travel disruption.
This typically involves travel being affected due to either a security event or a weather event and there’s often a ripple effect, where the plans of people not even caught up in the event are disrupted.
“When you get a major hub that is affected – whether it be a security-related event or even a weather event – there’s a massive flow-on effect to people’s travel arrangements,” Needle says.
The 2010 eruptions of the Eyjafjallajökull volcano in Iceland, for instance, caused 20 countries to close their airspace to commercial jet traffic and affected about 10 million travellers.
Corporate travel insurance policies allow cover for reasonable unforeseen additional travel expenses.
“If someone’s travelling on business, the first question we want to know is, can you adjust or can you use your existing travel arrangements? If that’s not possible, then the assistance company can either try and find alternate travel arrangements or alternatively, the member can do their own thing,” Needle says.
Ben Bowen, General Manager of Broking at insurance broker Whitbread, says any business sending staff overseas should have corporate travel insurance. “Really, it’s all about protecting your business and protecting your employees,” he says.
He says it is similar to personal or leisure travel insurance, but usually has broader cover. “Most of those retail-type policies are full of exclusions and so forth – the classic one being pre-existing medical conditions. There’s less restriction in corporate travel insurance around pre-existing medical conditions,” he says.
Bowen says another advantage of a corporate travel policy is that it automatically covers senior staff – such as directors and executives – and their families for leisure travel. “If you’re a director of a business and you want to pay $1,000 or $2,000 to cover your whole business, you can do it knowing that, actually, it’s going to cover all your own travel needs as well,” he says.
He said that when seeking corporate travel insurance, businesses should look out for policies which don’t have restrictions on cancellation costs or medical expenses.