Travel insurance

What it means

Travel insurance covers the risks of a trip: medical costs abroad, accident, baggage, liability for damage and often cancellation. It is bought for days, or as an annual policy for repeated business travel.

It does not replace public health insurance, and the European card does not replace it either. The card buys only necessary care in public facilities on local terms, co-payment included, and covers neither repatriation nor a private clinic.

Cancellation cover and medical expense cover apply to different stretches of time. Medical costs concern the stay abroad, cancellation the period before departure, and only for the reasons listed in the conditions, such as illness or injury. A cancelled conference or a change in the company’s plans is usually not an insured event.

How it works in practice

On a foreign business trip this is not a perk: the employer must reimburse the employee for medical expense insurance abroad, and that reimbursement belongs to travel allowances, so it is not taxable income for the employee.

On a road trip people confuse cover for the travellers with the green card: the first is health and baggage, the second is proof of compulsory motor liability insurance. Damage caused to another car is never paid from travel insurance.

For companies that travel often, an annual policy for named employees or for a number of trips usually works out better. We book the premium as an operating cost, and if the policy runs across the financial year end, the part belonging to the next year goes through accruals and deferrals.

What to watch out for

The policy is bought for tourism and the employee goes abroad to install a production line. An exclusion for manual and hazardous work sits in the standard conditions, so after an accident on site the insurer pays nothing and the hospital bill lands on the employer.

Annual policies often cap the length of a single trip. An employee posted to a project for several weeks is uninsured once the cap is passed, although the company keeps paying, and a long-term posting also requires sorting out public health insurance with the health insurer in advance.