While large, multinational employers are familiar with the risks inherent in international business travel, midsize employers just beginning to send employees overseas are recognizing the need to manage this exposure.
Whether it's a marketing executive traveling occasionally to arrange for goods to be exported or an operations manager visiting a foreign manufacturing plant that supplies component parts, these international business travelers are exposed to risks ranging from the benign to the extreme.
Though most mid-market companies don't have on-the-ground operations in foreign countries, they can have travel exposures if their employees travel outside the U.S. for business, said Lyde Esposito, international segments leader at Zurich North America Commercial in Chicago.
“There's plenty that can go wrong when employees are traveling overseas,” said Dominick Zenzola, Chicago-based vice president and employee benefit manager at Chubb Accident and Health, a unit of Chubb Group of Insurance Cos. “One of the most common is a medical emergency, such as an accident or illness.”
Imagine an employee traveling in the Middle East who requires medical attention after becoming involved in a car accident. The employee is “thousands of miles away and doesn't speak the language and may not be familiar with the health care system in that country,” Mr. Zenzola said. “There are some hospitals where you have to pay before you get in.”
Bryan Tedford, senior vice president of foreign casualty at Ace USA in Jersey City, N.J., said the insurer once paid a damage claim on behalf of a furniture company employee who was injured while shopping in a farmhouse for antiques to import to the United States.
“The owner of the farmhouse wasn't very happy,” Mr. Tedford said. Fortunately, the employee's injuries were minor.
Another time, Ace paid a claim for damage to a hotel that occurred when a traveling executive fell asleep while drawing a bath, flooding the room.
At the other end of the spectrum, international business travelers could encounter political unrest, natural disasters, kidnapping and extortion.
“A lot of business is being outsourced to India. There are call centers and branch operations being set up there,” said Thomas Dunlap, assistant vice president and Dallas-based regional manager of global crisis management for the Southeast and Southwest regions at Liberty International Underwriters, a unit of Liberty Mutual Insurance Co. “It's all a matter of perception of wealth. If you work for a Western company (and are traveling) in India, there's a perception that you have money and you become an easy victim,” he said.
James Walloga, New York-based vice president of global travel risk management in Ace USA's accident and health division, said the biggest risk facing foreign business travelers often is “unfamiliarity with the location.”
While companies often prepare employees to live and work outside the United States, they generally provide less training for those who engage in short-term travel abroad.
Depending on the nature of the trip, “a lot of time there is not enough time to prepare them beforehand,” Mr. Walloga said.
But lack of familiarity with a country's laws, customs and health care system could expose an employee to risks for which he or she may be unprepared, he said.
“For example, if I'm traveling to Egypt for two weeks and while I'm there, there's a political upheaval, where do I go? Who do I call? How do I protect myself? Or say I get sick in Germany,” Mr. Walloga said. “Where do I find a doctor who will accept my health insurance?”
Just in case he confronted such a situation while traveling internationally, Mike Thompson, national practice leader for Mercer L.L.C.'s integrated benefits division based in Atlanta, said he “always carried around a card that had emergency numbers accessible all over the world for any kind of emergency if there was a serious illness within my family, someone needed to be repatriated or some kind of legal problem such as an arrest.”
Such concierge services are included in international travel insurance products available on an individual and group basis to small and midsize employers (see related story). Smaller companies often do not purchase group policies since they may have only one or two people traveling abroad.
Employers also can elect to receive electronic alerts from travel management companies about risks such as natural catastrophes, labor strikes, changes in flight schedules or severe weather.
Bonnie Lang, risk and travel management analyst at Terumo BCT Inc., a mid-size biotech firm based in Lakewood, Colo., said she subscribes to one such service and, with insight provided by the travel management company, she is able to pass along to Terumo BCT's international business travelers pertinent information. The travel management company's reports proved useful when the earthquake and tsunami hit Japan last year, because an employee was traveling in Japan at the time. Fortunately, the employee was unharmed, Ms. Lang said.
“Organizations owe a duty of care to their employees. Preparing the individual is critical,” said Chris Holt, consulting director of a new crisis management team recently formed by Towers Watson & Co. to consult businesses in addressing terrorism, kidnapping, ransom and extortion, product recalls and “hostile environment” risks, such as riots or terrorist attacks that require protection or repatriation of a business traveler.
“Preparing the individual is critical. If someone's previous travel experience is North America and Europe and they're going to Nigeria, you need to prepare them,” Mr. Holt said.
Moreover, “organizations should be able to monitor the risk and the exposure to their people so that if it changes fundamentally,” they can respond effectively, he said. “A lot of times, that's fairly basic stuff like having a single number people can call 24/7 to access help.”