COVID-19 new travel insurance guidelines (2): how insurance companies could benefit

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World Tourism Day must propel tourism development of Volta Region
Philip GEBU

The World Travel and Tourism Council(WTTC) has prepared some new guidelines for travel insurance. This is an opportunity for Insurance companies scrutinizing these guidelines and possibly prepare new travel insurance policy cover.

Consumer-facing insurance recommendations:

  • Conduct an audit of any existing insurance policies to identify risks/gaps in coverage, and look to source the right partners and providers to ensure appropriate coverage moving forward. Identify areas where insurance was not procured and could in the future mitigate risks and provide protection for the traveller, host countries, and providers
  • Enhance awareness of the terms and conditions, restrictions, and coverage limits of the insurance products
  • Create blanket insurance and crisis management coverage to give comfort to clients, members, travellers, and passengers, and mitigate COVID-19-related risks for hosting countries (e.g. business travel medical/business travel accident coverage for corporate travellers, as well as blanket plans for the travelling public). Travellers are concerned with repatriation in case they become sick while travelling. They may also need health insurance to cover the cost of hospital/medical care in the destination, and they will be looking for some form of trip cancellation/ trip interruption coverage in case the travel arrangements are cancelled or interrupted. One potential coverage option for the travelling public is for a plan that provides at least a minimum base of coverage on a mandatory basis to ensure each traveller has some level of protection, including for COVID-19 risks. Providing travellers with the ability to access medical consultative services and be rescued, evacuated, and repatriated is critical for building peace of mind in the travelling community
  • Educate the many travellers who are unfamiliar with insurance of the risks they are exposed to, what coverage they should look for, and encourage them to be updated on government requirements of any countries they are travelling to/from Insurance distribution options:
  • Internal: Organisations should source business travel insurance and/or crisis response membership as an embedded benefit for employees
  • External: If you are providing insurance to consumers, it can be either an embedded/mandatory or optional product. A basic embedded programme is recommended, to ensure no consumer is without coverage. Providing access to optional additional coverage will allow consumers to purchase more robust protection as well.

TRAVEL & HEALTH INSURANCE

Individual Travellers: Leisure and Business

Highlights:

  • Offer travel health and trip insurance as coverage options to large scale plans to protect travellers from unforeseen financial hardship resulting from sickness, injury, death, or events that incur medical, cancellation, or trip interruption expenses. Offer crisis response services/membership to provide physical response, protection, and extraction/evacuation when needed
  • Sell these plans primarily to leisure travellers in point of sale transactions through various distribution channels
  • The global variation in insurance coverage is as significant as the risk to which a traveller is exposed. It is important to note that the long-term effects of the pandemic on travel insurance are yet to be determined
  • For host countries, one potential consideration to ensure they are paid by travellers in the event of illness related to pandemic, catastrophic loss, or non-private cover, is to introduce a travel medical tax
  • As a general rule, trip cancellation and interruption coverage protect against non-refundable travel expenses in the event travel is cancelled or curtailed due to any reasons listed in the policy. Trip cancellation plans with “cancel for any reason” benefits provide coverage if travellers opt not to travel for reasons other than the insured risks listed in the policy – however, there may be coverage limits or standards on how long prior to departure a trip must be cancelled. These plans typically do not cover known risks, which may affect coverage if a policy is purchased after an epidemic or pandemic has already occurred. Every carrier and operator has nuances in their plans, so it is important to examine each plan to understand the risks covered and any exclusions. Guidelines can be developed to identify minimum coverages
  • Reimbursements from trip cancellation and interruption plans are for non-refundable expenses from the travel supplier – travel expenses that are transferable or reimbursed via vouchers are not typically covered

Recommendations:

  • Provide clear and comprehensive guidelines, with feedback from all stakeholders, to protect consumers and service providers
  • Improve/expand medical and crisis support capabilities for travellers, in conjunction with insurance, and clearly articulate these resources to drive peace of mind in the marketplace
  • Modify, if needed, travel and health coverage limits related to COVID-19, or pandemics in general
  • Encourage travellers to purchase trip cancellation and interruption policies with coverage for trips impacted by government travel warnings related to epidemics or pandemics
  • Advise travellers who have already purchased trip cancellation and interruption policies to check their coverage and limits related to pandemics and/or travel advisories before renewing travel plans. This is important as hospitalisation of sick or injured travellers may present a continued problem depending on the country and its stage of the pandemic which may require workaround patient treatments
  • Encourage travellers, when shopping for insurance, to inquire about coverage related to infectious diseases such as COVID-19 as well as future pandemics
  • Advise organisations to ensure adequate business travel coverage for their employees
  • Conduct education/awareness campaigns to inform consumers and key stakeholders of the risk of not having coverage, what coverage to look for, and how to travel safely and insured Groups and the Role of Companies, Organisations, and Schools

Highlights:

  • Certain group policies may require that insured members return to their country of citizenship if a government warning is issued against travel to their country of residence

Recommendations:

  • Groups with international travel or major medical coverage are advised to ensure that coverage will remain in effect for members who are abroad during the pandemic
  • Groups are advised to ask if any coverage or rate changes will be applicable at the time of renewal as a result of the pandemic
  • Groups are also asked to determine if new coverage limitations related to COVID-19, or pandemics in general, will be applied on Governments

Highlights:

  • The majority of governments made efforts to bring their citizens home during the COVID-19 pandemic. Moving forward, however, this may not always be the case. With travel restrictions in place for the foreseeable future, insurance carriers and assistance companies will likely not be able to repatriate members with the same ease
  • Travel medical insurance commonly excludes expenses incurred in locations for which an insured person’s government has issued an advisory against travel prior to the trip. Conversely, trip cancellation and interruption policies may contain benefits that are payable when a trip must be cancelled or curtailed due to a government advisory

Recommendations:

  • Remind governments that travel advisories issued by them against travel to specific countries, regions, or cities play an important role in international insurance
  • Governments should aim to maintain a publicly accessible website with concise, accurate, and up-to-date information on travel advisories to ensure travellers have access to the necessary information. It is suggested that these advisories include specific dates to indicate when they went into effect and were removed, to help travellers determine whether their trips are covered
  • Advise governments to make available clear information on what coverage, if any, is provided via domestic health insurance programs to their citizens when abroad, so that travellers are given clear guidance on expected insurance coverage Other Observations and Considerations:
  • Travel medical insurance excludes known risks and, as such, could be used to deter those who are “unwell” or immunocompromised from travelling. In the future, insurers may weigh the option of vetoing the sale of travel medical insurance to these travellers
  • Insurers should consider building provider networks that would not be used as facilities in future pandemics
  • The modification of underwriting processes specific to mitigating pandemic risks may be warranted. This may consider information such as applicant vaccinations, the country of destination, the purpose of travel, etc.
  • As there is currently conflict regarding “who pays for what”, there is a need to establish governance and/or policies to ensure clarity around responsibility
  • It is recommended to require some form of health insurance for all travellers to safeguard the medical systems of destination countries

EMPLOYEE COVERAGE

Safety, Benefits, Travel

Highlights:

  • Liability coverage will likely have requirements, such as proof of safe work environment, testing, personal protective equipment availability, appropriate distancing of workstations, policies regarding unwell employees, health checks, vaccine verification, flu shot requirements, self-isolation upon returning from travel, etc.
  • Ethics reporting as well as Duty of Care policies, resources, and guidelines will likely be required; robust travel risk management policies and resources will be the new normal
  • Current benefit programs require modification to address pandemic situations and new work-life balance demands
  • Emergency fund allocation and/or remuneration package to include fund for employees due to emergency (similar to pension contributions, etc.) These funds can be accessed in the event of pandemics, natural disasters, etc.
  • Have a clear strategy and process for lay-off/severance and sick pay/leave
  • Travel Medical Coverage, if available, is at times limited depending on the country and not always adequately covering business travel or providing long-term coverage

Recommendations:

  • Implement safe work environment policies and procedures by Human Resources
  • Highlight and campaign for accessibility of flu shots and vaccination (Covid-19) when and if available
  • Provide personal protective equipment (PPE) to all employees
  • Update sick pay policy
  • Implement self-isolation policy and support return from travel
  • Provide digital Duty of Care solution, including up-to-date information/resource library, check-in function, and communication capability
  • Establish ethics reporting mechanism
  • Create employee survey to uncover needs/concerns resulting from COVID-19-related issues
  • Have family-related leave policies to address possible quarantine, care for elderly and children
  • Establish flexible work hours to accommodate physical distancing as well as work from home policies. Consider implementing work from home subsidy
  • Provide telemedicine and access for all employees. Offer mental health services – digital/virtual and in-person
  • Create wellness tools, ongoing onsite/offsite digital resources
  • Establish or enhance education or retraining fund for terminations/lay-offs due to pandemic, natural disaster, longer extension of employee benefits where possible
  • Establish hazard pay if possible
  • Consider expanding or including Health Spending Accounts to provide flexible benefits to accommodate variety of needs
  • Improve access to voluntary benefits
  • Provide specific business travel policy for employees which includes evacuation and assistance beyond medical services
  • Consider notifying and offering opportunity to employees to “top-up” coverage for gaps in insurance with respect to leisure travel

PROPERTY AND CASUALTY INSURANCE

The following section provides a general and non-exhaustive list of different types of Property and Casualty insurance products. Similar to other insurance products, consumers and corporations should make sure that they review their insurance policies. Many insurance companies have included COVID-19 and pandemic clauses to eliminate coverage in all their insured products. A number of insurance companies have also stopped providing certain types of products because of high losses during the pandemic, such as event cancellation, trip cancellation, business interruption coverage, and liability related insurance.

Commercial Insurance protects business owners from losses due to unforeseen events that may occur during daily business operations, including third-party property damage, errors, or bodily injuries. There are many types of commercial insurance available, with the most common including general liability insurance, errors and omissions insurance, and commercial property insurance.

Commercial General Liability Insurance protects businesses and business owners against claims for personal or bodily injuries, advertising liability, as well as property damage to third parties resulting from operations, products, or occurrences

on business property. For example, a customer could claim that they contracted COVID-19 on a business premises. Business Interruption Insurance is usually an add-on to an existing business property insurance policy that covers earnings that would have been made during a period of shutdown. It is currently too early to know whether new products to provide coverage for COVID-19 may emerge.

Supplier Default Insurance covers financial losses due to the bankruptcy of an airline, cruise line, tour operator, or other provider of travel services. The bankruptcy must be unforeseen and usually has a waiting period from the time of purchase.

Organisations could look to provide a blanket supplier default coverage to deal with any fears of consumer financial losses in this regard.

Conference and Event Cancellation Contingency Insurance. These policies protect an insured from irrecoverable costs and expenses that may be incurred as a result of an event having to be postponed or cancelled due to circumstances beyond the control of an insured.

Political Risk Insurance covers against the loss of commercial assets, income, or property as a result of a political risk event. The policies can provide coverage for a wide range of risks, including political violence, expropriation, currency inconvertibility, non-payment, and contract frustration.

Companies should look at how insurers and governments distinguish between the terms to determine whether they opt for political risk insurance, political unrest insurance, terrorism insurance, etc. or a combination thereof. Corporate Insurance, also known as Business Insurance, provides cover for various corporate operational risks such as theft, financial losses, employee health benefits, and accidents.

Types of corporate insurance include property insurance, professional liability insurance, workers’ compensation insurance, group health insurance, product liability insurance, and business interruption insurance.

Executive or Management Liability Insurance covers exposures faced by directors, officers, managers, and business entities that arise from governance, finance, benefits, and management activities.

This includes directors and officers (D&O) liability insurance, employment practices liability (EPL) insurance, fiduciary liability insurance, and “special crime” insurance (covering kidnap, ransom, and extortion exposures). Errors and Omissions Liability Insurance or professional liability insurance, covers liability for negligence, and errors and omissions, in the event a client is dissatisfied with a service that was not performed as promised. Personal Liability Insurance provides coverage in the event that travellers infect host countries or vendors/suppliers, such as hotels and airlines.

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