Corporate travel insurance 26 June 2020 update – COVID-19 exclusions
Published 26 June 2020
As COVID-19 restrictions ease businesses making plans for travel should be aware that the intention of insurance is to cover sudden and unexpected events. Given travel restrictions and the high level warnings have been in place since 18 March this generally means travel insurance for COVID-related impacts is not available. Read on for specific communications relating to domestic and international travel.
Corporate travel insurers take different positions and approaches to cover and assessment of claims. Policy wordings issued by different insurers may contain varying terms and conditions. All insurers are continuing to monitor the situation, and their position on what is and isn't covered continues to change. Before making any plans ensure that you understand your insurer’s response to COVID-19.
Some states in Australia are allowing travel, others are yet to support regional and interstate travel across borders. As COVID-19 is a known event many insurers will not cover losses incurred on cancellations related to it.
Also note that quarantine expenses are most likely not covered by your insurance policy and that there may be no medical coverage under corporate travel insurance policies because we have access to a public health system in Australia.
Currently there is also some interstate travel available. Several states remain closed or have strict quarantine measures in place.
Points to consider • visit your respective state government’s websites for regular updates • in the event of a second wave, consider how far in advance you want to book travel • employers need to be aware of the situation in the destination where they are sending employees and ensure that they are adhering to the required social distancing recommendations • most insurers do not provide cover for COVID-19 related cancellations • there is generally no coverage available for costs incurred for quarantine • there is no medical coverage available on domestic travel policies.
A Department of Foreign Affairs advice level 4 remains in place for international travel. Even if you do have government exemption to travel be aware that cancellations relating to COVID-19 may not be covered by your insurance.
Employees currently overseas are able to travel, but only to and from countries/localities which have open borders and they must meet the travel restrictions in place in their country of domicile and destination. Cancellations relating to COVID-19 for any new travel arrangements may not be covered by insurance.
Points to consider in relation to international travel for business or employees • in accordance with the Australian Government restrictions, travel will only be possible if someone is returning to their home country or if an exemption has been applied for via the Department of Foreign Affairs • If an exemption is granted most insurers have advised that the policy remains in place, but no cover is available for losses incurred due to COVID-19 related cancellations • while there is a travel ban in place most insurers will not provide COVID-19 related medical assistance • employees overseas must adhere to local government requirements for travel as well as the travel restrictions for their country of domicile and destination • most insurers have advised that overseas employees’ travel policies remain active, but no cancellations costs related to COVID-19 apply to new trips booked by these travellers.
As restrictions ease travel insurance limitations are expected to remain
Once travel can recommence you need to check carefully what claims will and won’t be allowable under the terms of your travel insurance.
Points to consider • travellers must observe government warnings • check destinations via the Smart Traveller website at all times as not all countries will be cleared for travel • if you are sending employees to a country where there is still a ban in place full insurance coverage may not apply • most insurers have advised that COVID-19 medical expenses will be covered • to claim expenses when bans are lifted the event needs to be deemed unforeseen and travel must be in accordance with DFAT advice • losses incurred for COVID-19 cancellations may not be claimable • quarantine costs on return to Australia generally are not claimable • make sure travellers have your insurer’s emergency contact details.
Consider carefully whether business travel is necessary or justified in the current environment. The need to bring employees back to Australia in the event of an emergency and the risk of incurring COVID-19 cancellation losses should be factored into your business continuity plans.
Review what COVID-19 exclusions may have been added to your travel insurance policies.
Hear what our travel insurance specialists have to say
We understand that this is a complex and evolving situation. Our brokers will continue to provide the advice and support you need and if you have any questions please get in touch. We are here to help.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
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