Tag Archives: Business Travel

Protecting Key Executives in Global Hot Spots

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The recent suicide bombing in Istanbul and the Paris bombing last November killed and injured innocent bystanders and sent shockwaves around the globe. Such attacks also cause organizations to question international travel out of fear of putting their key executives and employees in harm’s way.global travel

As the risk profile changes in some locations that were once considered safe, it is critical to reassess and more deeply examine company programs to protect business travelers abroad.

First of all, for companies and their insurance advisors, there is no substitute for great advance planning. If a company is contemplating overseas travel and can establish well in advance that there exists a need for key person insurance, the coverage is easier to obtain and more cost effective. The reality is that the heightened awareness around a dangerous trip often results in an insurance need being developed or uncovered with little notice. When this need arises, the underwriting process migrates from the traditional life and disability insurance market to the playing field of high limit or specialized risk underwriters.

In one notable example, a large U.S. company recently made a significant investment in a defense contractor. Shortly after the investment closed, the company named a new chief executive officer and sought to acquire $50,000,000 of key person life and disability insurance.

As of the day of the request, their insurance advisor had eight business days to secure the insurance before the CEO departed for the Middle East, with stops in such international hot spots as Iraq and Afghanistan. Because of the abbreviated time frame, traditional life and disability insurance was not an option. The advisor needed to turn to a specialty underwriter that deals with exceptionally large and complex human capital risks.

Armed with the CEO’s itinerary (see below) and details of the executive’s compensation and equity incentive agreement, the advisor had enough information to present the submission to the underwriters.

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Within 72 hours, a policy was issued that covered the private equity firm’s loss of the CEO directly due to an accidental death or disability, as well as a result of acts of war or terrorism.

Few domestic life and disability carriers possess the ability to underwrite large risks when there is high-risk exposure in the world’s hot zones. Instead, companies and their brokers must work with large international insurers that are willing to deploy meaningful capacity.

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The easiest way for advisors to access these markets is through an experienced U.S.-based correspondent who is skilled at designing and underwriting coverage in these volatile locations. Local correspondents or managing general underwriters also serve to guide brokers through the regulatory complexities that go along with underwriting risks through surplus lines carriers—something most life and health producers have little experience with.

The best brokers are masters at uncovering details from their clients, documenting them and communicating them effectively to underwriters. A well-written cover memo will often be the basis for offering coverage and can be the primary source for pricing consideration. A complete itinerary coupled with security details are the underwriter’s key points of interest, so make sure the information is gathered and communicated as early as possible.

Frequently, specific plans will be classified when working with international defense contractors, but one way or the other, the basic information must be made available. When underwriting coverage in highly hostile areas, rates can vary based on multiple factors, such as security arrangements, travel vendors, length of stay and, in highly hostile areas, rates even vary down to specific latitude and longitude coordinates, often within a single city or locale.

No detail is too small for spelling out the need for the insurance and financial justification, including the purpose of the trip and the client’s specific duties and objectives. This is the information that sets apart a submission and makes it more likely for an underwriter to go out on a limb with preferential pricing and terms.

Keep in mind, when underwriting risks in highly volatile areas—with the propensity for rapid deterioration—it may not be possible to negotiate coverage or a rate guarantee for the entire duration of the client’s journey. It is essential to keep in mind that the best underwriting offers go to advisors who deliver the most detailed and accurate information.

Example of a CEO’s itinerary:

Day 1 – Depart Commercial Air for Dubai

Day 3 – Arrive in Baghdad, Iraq – Transport to Camp Butler

Day 4 – Depart Baghdad and arrive in Dubai

Day 5 – Depart Dubai arrive Kabul, Afghanistan – Transport to Camp Gibson

Day 6 – Fly to Kandahar, Afghanistan

Day 7 – Depart Kandahar, Afghanistan – fly to Abu Dhabi

Day 12 – Depart Abu Dhabi for U.S.

It is important that we don’t allow acts of terrorism to knock the wheels off our economy. Business travel and face-to-face meetings are key elements in making us what we are, so it’s imperative that we mitigate the associated risk whenever possible.

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Zika and the Olympics: Business Travel Risks

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Zika
The Zika virus, and its presumed association with serious birth defects and a paralytic neurological disorder, poses an unusual problem for business leaders and risk managers. While the virus is not currently being spread by mosquitoes in the U.S., Brazil is an important destination for many U.S. business travelers, which will only increase in the build-up to this summer’s Olympic Games. For many companies, health and safety concerns are top priorities, but travel to Brazil may be a business necessity. Before making decisions around these two opposing drives, it is vital that risk managers and business leaders weigh the facts around Zika.

The Risk to Employees

Brazil ranks in the top 10 in the business travel global rankings, making it one of the world’s largest corporate travel markets. With the Olympics, business travel to Brazil is expected to increase considerably this year, yet many Americans are worried about the threats of the virus. Consider the results of a recent survey conducted by my company, On Call International: 64% of Americans and 69% of all women surveyed, said they would cancel their travel plans because of Zika. There is, however, a disparity between these widespread concerns and the ways businesses have actually responded to the virus. A survey by the Overseas Security Advisory Council found that of the 321 businesses that responded, less than 40% are allowing female employees to defer travel to affected countries, and only a fifth are allowing men to opt out. The majority of respondents are only taking steps to inform their employees about the virus.

Should more employers allow their employees to defer travel? In considering this question, business leaders need to turn to authoritative travel health sources such as the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC) to help make informed choices around employee health and safety concerns.

Furthermore, women currently account for nearly half of all business travelers. The virus’s risks around pregnancy-related issues like miscarriages and birth defects will be top of mind for many businesswomen with travel plans to Brazil. Are employee concerns enough reason for businesses to stop travel to Brazil? Turning to authorities such as the CDC—and its recent travel advisory urging women who are pregnant or thinking of becoming pregnant to avoid travel to places like Brazil—provides a compelling reason for business leaders to consider more flexibility.

While women’s apprehensions around Zika seem obvious, the rising concern of the virus being transmitted sexually means that men with pregnant partners, or partners who may become pregnant, also have reason for concern. Notably, the CDC has issued warnings specifically for men traveling to locations like Brazil, which is another reason for businesses to give deferral of travel by men further consideration.

Duty of Care

As part of a company’s Duty of Care—the legal obligation to protect your employees from any reasonably foreseeable harm—your employees’ concerns around the Zika virus should be taken seriously. The virus is a new obstacle for businesses, and its risks require new approaches before any business travel to Zika-affected areas. Through proactive education, there are appropriate and responsible ways organizations can consider responding to the virus that are aligned with their legal and ethical responsibilities to their employees and their business. Organizations should consider meetings with all employees to discuss the virus and the health risks the virus imposes for travel.

If Travel is Necessary

While the symptoms of the virus – which are generally mild – are not immediately life-endangering, it is a good precaution to ensure employees are aware of resources such as doctors or hospitals in the areas where they are traveling. With special events like the Olympics, business leaders can also look into potential resources that are developed to help provide backup services for Rio during the Games. In preparation, Brazil is expected to invest $3.7 million in projects that include improving the medical infrastructure. These are investments that can benefit business travelers, if they have are made aware of them.

As there is no vaccine for the virus, organizations should share protection methods, including:

  • Avoid mosquitos and limit outdoor activities, especially from dawn until dusk when the Aedes aegypti mosquito is most active
  • Stay in accommodations with properly air-conditioned rooms. Netting for beds can also go a long way in protecting against the virus
  • Avoid unnecessary skin exposure by wearing long sleeves and pants
  • Purchase the correct insect spray—specifically those that contain DEET, picaridin, oil of lemon eucalyptus or IR3535

Embracing Flexibility

A sound approach includes weighing the risks and rewards of travel to Brazil and other Zika-affected areas. Where possible, be flexibile. For example, if your organization has employees based permanently in Brazil, or local partners, leverage them for any work that needs to be done in person to reduce the risks of sending additional employees to Zika-affected areas. There are also easy, technology-driven solutions, such as video chats or teleconferences. Be creative in your travel risk management solutions and identify which methods work best for your organization. Building your risk management program from a solid base of proactive education helps empower employees to make informed decisions regarding their travel plans to locations affected by Zika.

For more on this topic, check out our May feature in Risk Management Magazine.

Is Fear of Terrorism Grounding Your Business Travel?

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Paris

The recent acts of terrorism in Paris stunned the world, when 150 were killed and more than 300 were wounded. But the collateral damage went far beyond buildings being ripped apart and one of the most popular cities in the world being virtually shut down.

Business Travel Coalition, a U.S.-based lobby group, recently released a survey of 84 corporate, university and government travel and risk managers from 17 countries on their attitudes of trips to France following the bombings.

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Twenty-one percent of the respondents said they were very or somewhat likely to cancel travel to France for “some period of time,” and 20% were somewhat likely to cancel travel to and within Europe. A large majority said they’d probably allow employees to decide whether they were prepared to head to France.

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One in five corporate travel managers is likely to cancel trips to Paris “for some period of time.” These are not surprising statistics.

Terrorism has been defined as “The use of violence to instill a state of fear,” and that effect is far-reaching; a bomb explodes in Paris and it’s likely that 5,600 miles away in California some corporate risk manager for a Fortune 500 company is seriously considering cancelling a business trip to Europe—a visceral reaction that could cost his company untold sums of money. Mission accomplished.

But it doesn’t have to be that way.

I fully realize that the fire that fuels business owners is the desire to overcome any obstacles perceived to hinder the bottom-line. But there’s no way a sane person can watch the news today and not wonder, “What is the risk of undertaking a business trip overseas? Will I fall victim to a terrorist act?” I contend that the answer to this question is to put your risk in perspective.

Although it’s a sad state of affairs that there will most likely be another terrorist attack in Europe sometime in 2016, it doesn’t mean that a high degree of risk involved for you, personally. According to the U.S. State Department, the number of U.S. citizens killed overseas by incidents of terrorism from 2001 to 2013 was 350. In other words, your odds are greater to be killed in a car crash (one in 19,000), drown in your bathtub (one in 800,000), or be struck by lightning (one in 5.5 million) than to perish in a terrorist attack (one in 20 million).

It is important that we don’t allow acts of terrorism to knock the wheels off our economy. Business travel is a key element in making us what we are, so it’s imperative that we mitigate that risk whenever possible.

The first thing is to make sure you are not so focused on terrorism that you fall victim to the common risks swirling around us every day. For instance, when traveling overseas don’t be so obsessed with where you think an incident might happen (no matter how statistically unlikely) that you select an alternate route that takes you through the last place on earth where you’d want to get a flat tire in the middle of the night.

Second, minimize the risks you have control over.

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Stay up-to-date on the State Department’s list of global hot spots, and have your business travel professional plan each step, down to the slightest detail (air, hotels, ground and communication).

Detailed planning is paramount because with any type of business travel in these uncertain and even downright scary times, it is all about controlling the risk. And that can start with the simple act of driving carefully on the way to the airport. That way the most likely risk you’ll ever face on your trip is already behind you before you even board the plane.

Travelling Safe During Conference Season

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Spring break is upon us and underage drinkers across the nation may be engaging in risky business. But just as the following tips are appropriate for spring breakers, they’re also useful for business travelers, especially since conference season is upon us. With that in mind, On Call International released the following tips for safe travel, whether it’s for a break from the books or the never-ending string of conferences that begin .

1)      Go on a learning spree. Whether you’re a seasoned traveler or not, it’s important to gather as much information as you can about your destination before you depart, from both a health and safety standpoint. This includes finding out if there are any particular areas or hot spots you should avoid in your destination.

 2)      Don’t broadcast on social media that you’re away. Period. According to research, over 1/3 of social media users post status information regarding travel plans. Though it’s tempting to post Facebook and Twitter updates letting your social networks know how much fun you’re having on your trip, try to resist the urge. Letting the world know that you’re not home makes you a prime target to potential crooks and other criminals.

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In addition to casing neighborhoods and dark parking lots, criminals now browse social media channels for vacation updates and Facebook “check-ins” to places near and far. And with social media networks’ privacy policies constantly changing, it’s not always smart to assume you’re safe even if your social profile settings are set to private.

 3)      Play by the rules. If you’re traveling to another country, learn what documentation is required to enter and leave the country as well as the country’s laws and criminal penalties.  Laws in other countries are often quite different from those in the U.S. For example, some countries cannot honor foreign prescriptions (all the more reason to make sure you have all your prescriptions filled before you leave, regardless of where you’re going).

4)      Invest in a TSA-approved lock. While you can use a normal lock for your suitcase, the Transportation Security Administration (TSA) has the right to cut it off if they need to inspect your belongings. However, if you have TSA-approved locks, you will still have a lock after the inspection because TSA officials use a universal master key, (and they are required to leave you a note if they have opened it). TSA-approved locks are available at airports and retail stores nationwide.

5)      Make sure you can stay in touch. Contact your cell phone carrier and make sure you’ll have phone service while you’re away and ask how much it will cost to send and receive texts, phone calls and emails.

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If you’re traveling out of the country, you can usually negotiate a special rate or temporarily sign up for a plan so you can reach out (or be reached) if needed.

6)      Know what to do in an emergency. We all know who to call for help when we’re traveling domestically, but do you know the phone number for emergency response is not 9-1-1 outside of the United States? The State Department has compiled this handy list of emergency contact numbers in foreign countries—save the number used at your destination in your cell phone just in case you need it. And remember—after you call 9-1-1 (or the country’s equivalent), make sure to call your travel assistance provider in the event you need to be evacuated during a political upheaval or natural disaster or if you need emergency medical care and transportation.

7)      Watch what you eat (and drink). Many travelers will experience a bit of intestinal upset during their lifetime, but a lack of caution about eating in some parts of the world can be downright dangerous to your health. If local water supplies are not safe to drink, don’t take chances.

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Use bottled, boiled or sterilized water for drinking and brushing your teeth. Fruits and vegetables washed in local water can also be unsafe to eat—if you can’t peel it or it hasn’t been thoroughly cooked, do your best to politely decline. Street food can be perfectly safe, but watch to see that it’s being cooked well and choose vendors who regularly attract a large crowd.