With more than $1.3 billion in sales in 2006, travel insurance is a popular item for business and leisure travel alike. For company excursions, however, business travel insurance may not be optional. Most large corporations have blanket policies called annual business travel insurance plans, which cover all instances of employee or owner trips related to company operations. Some smaller businesses and self-employed individuals have annual plans, while others choose to buy one-time policies. Self-employed workers traveling alone, however, may be able to use free alternatives to business travel insurance.
What is Business Travel Insurance?
Business travel insurance helps to mitigate risk for companies by insuring against a wide array of problems that may cause interruption or cancellation of company trips. The most common reasons for business travel interruption include:
- Breakage, loss, or theft of company equipment
- Medical emergencies for clients or employees
- Weather events delaying or canceling travel
Most business travel policies are designed to provide specific coverage with caps on the amount of payouts for problems. According to the U.S. Travel Insurance Association, 17 percent, or one in six policy holders, files a claim with travel insurance at some point. With odds like that, self-employed workers who want to secure risk may strongly consider buying business travel insurance to hedge against problems, accidents, or any issue beyond the worker's control.
Self-Employed Workers and Medical Travel Insurance
One of the major reasons for business travel insurance is medical. What if a self-employed worker experiences a major medical or health emergency while traveling? Medical evacuations can cost five figures, and if a self-employed worker doesn't have emergency medical travel insurance or coverage on a health insurance policy, the financial impact can destroy personal and professional finances.
Before buying medical travel insurance, though, a few tips to see if there is a free alternative using existing health insurance coverage:
- Call the self-employed worker's health insurance benefits hot line.
- Ask about specific coverage for medical crises while traveling.
- Get this in writing; ask for websites or email attachments for documents to print and take on company trips.
It's always better to have too much coverage than not enough, though, so if the information from the health insurance support line isn't clear, or if coverage isn't strong enough, self-employed workers should buy a business travel insurance policy to cover medical emergencies.
Credit Card Insurance
What about trip cancellation or interruption insurance, or equipment insurance for accidents, losses, or theft? While any good business travel insurance plan covers these contingencies, credit card insurance may cover these issues as well.
Many credit card companies have a purchase protection plan that offers a certain degree of credit card insurance for items and services charged to the account. If, for example, a clothes washer charged on a Visa account breaks after warranty, the issuing credit card company may offer a replacement or repair because of extended warranty backed by the credit card.
Self-employed workers should examine credit card insurance and buyer purchase protection from major account companies such as
- Visa
- Mastercard
- Discover
- American Express
- Diner's Club
Before buying business travel insurance, call the credit card company and ask about coverage for company equipment in transit, or for cancellation or interruption if the trip is charged to the credit card account. Self-employed workers may be pleasantly surprised to learn that the coverage offered, free, by the credit card company may be identical to that offered for a premium by a business travel insurance agency.
Homeowner's Insurance and Travel Emergencies
Finally, as a self-employed worker there is only one person in the company, and if the owner/only employee owns a home or rents and has insurance, that insurance - rather than a new business travel insurance plan - may already cover equipment loss, breakage, or theft. Check with homeowner insurance policies and renter's insurance to see whether equipment lost on the road is covered, and to what extent before buying a business travel insurance plan.
In the end, it's all about risk. How much risk can a self-employed worker handle? The answer is as individual as the companies operated by self-employed workers, and peace of mind comes from knowing that the balance between enough coverage for a business to thrive and no coverage leading to closure is a hard equilibrium. Owners need to arm themselves with the facts, the costs, and to research every alternative online and in print to find the best possible outcome.
To learn more about business travel insurance and blanket umbrella policies for companies, please read Annual Business Travel Insurance.
Melanie Zoltan - Melanie Zoltan is a former college professor and administrator who has written for About.com, PCWorld, Brain Child, Thomson Gale, and ...
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