Today’s article is by Patti Ryan from SmallBizAdvisor and Robin Ingle from Ingle International.
Canada has the world’s highest rate of travel insurance sales per capita—and 70% of Canadians cross a border when they travel. Do their employers know how to insure them properly?
Some may, but many more are likely unaware of the changes the industry has undergone over the past two decades. Since failing to understand restrictions or gaps in policies can lead to expensive problems for small businesses, it’s sensible to make sure you are up to speed.
Robin Ingle, CEO of Ingle International, a travel insurance firm that represents major insurance companies nationally and worldwide, remembers a time when provincial health care plans covered most travel-related health care costs. But at the end of the 1980s, the landscape began to shift, with provinces off-loading those costs. The first Canadians to be affected were the snowbirds.
The provinces’ idea then was, “if you can afford to travel, then you can buy coverage,” says Ingle, whose firm was the first to sell snowbird insurance. The early nineties marked a departure point in the industry, as travel insurers began providing primary, rather than just supplemental, coverage.
Duty of care
Since then, group travel insurance has steadily grown to resemble its retail cousin, with an increasing number of restrictions. According to Ingle, what employers need to be most concerned about today is an upsurge in liability related to “duty of care,” a phrase that refers to an employer’s responsibility to provide travelling employees with the best coverage possible within its means.
That may not be as straightforward as it sounds, advises Ingle. It means your employer needs to know the details of what’s in the benefits packages they offer, including the limits and conditions that are increasingly popping up in them:
- Stability clauses can mean that to be eligible for coverage, the employee must not have been treated or hospitalized for a stated period before the effective start date of the trip. That period could be anywhere from 90 days to a year, suggests Ingle.
- Some policies limit where employees can go, and may not cover them if the government has issued a travel advisory.
- Specified activities may be excluded from coverage.
- Policies often have limits on the maximum number of days of coverage—anywhere from 90 days to as few as 15.
Ingle says one issue is that not all firms realize changes to travel insurance coverage have been happening. His advice? Businesses should take the time to understand what’s in their group policies, and sit down with their insurance provider to discuss their needs. “The employer should say to the benefits planner, ‘This is what I require. What are you going to give me?’”
It’s also important to understand where the gaps may be, even within Canada. For example, Ingle says air evacuation may be covered in one province, but not in another, and can cost as much as $15,000.
Ingle adds that, increasingly, the most prudent solution in many cases—the one he recommends that most benefit planners offer—is what he calls a “hybrid” model.
“That’s a model that includes good information on what’s covered in the employee benefit plan, but also access to individual travel insurance products, with some understanding of how they can be applied,” he says. The hybrid model lets planners provide a higher level of coverage in the individual product, as well as base coverage on the employee benefits side.
Along with having the right policy and understanding what’s in it, Ingle says every employer should have an emergency plan in place to cover unforeseen events, such as natural disasters. “You don’t need an HR department to do this,” he points out. “It comes down to: What have you thought about in advance to help that individual?”
In the end, although establishing contingency plans and combing through policy details may seem arduous, Ingle notes that it’s not that complicated and it’s time well spent. “Look at it this way,” he says. “Do you want to spend your energies fixing problems? Or do you want to be proactive and get the right product in the first place?”