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Does Business Travel Insurance Cover Flight Cancellations & Subsistence?

Jun 17, 2022

Passengers have faced a raft of UK flight cancellations causing disruptions for many families on half-term holidays and business travellers. And the situation looks set to continue well into the summer months unfortunately. Staff shortages and the time it takes to train and obtain security clearances for new staff have all been cited as contributing to the issues being seen.

But what does this mean for you as a traveller, whether you are travelling for personal or business reasons? And what steps can you take to protect yourself from the financial losses that flight delays and cancellations can cause?

Are you entitled to compensation if your flight delay or cancellation is your airlines fault?

We are seeing a lot of flights being cancelled or significantly delayed at the current time so it is likely that this will be a concern if you are due to travel in the coming weeks or months.

UK law extends a number of rights to you if your flight is cancelled or delayed. If the cancellation or delay is your airline’s fault and it is covered under UK law, then you may be entitled to compensation.

You might be able to get compensation if your flight was:

  • leaving from the UK – it doesn’t matter which airline it was with
  • arriving in the UK and was with a UK or EU airline
  • arriving in the EU and was with a UK airline

If your flight is covered by UK law and it is cancelled, then your airline should offer you either a full refund or the option of an alternative flight. But you may also be eligible for compensation if you meet certain criteria. The amount of compensation you could be eligible for will depend on how much notice you received about the flight cancellation and how much disruption you experienced as a result.

If your flight is cancelled, then your airline must also provide you with other assistance such as a reasonable amount of food & drink, a way to communicate, free accommodation if you must stay overnight anywhere to fly the next day and transport to and from that accommodation.

If your flight is delayed and arrives at your destination more than 3 hours late you may also be eligible for compensation. If your flight is delayed by 2 hours or more your airline must also provide you with assistance such as those mentioned above.

Does Business Travel Insurance cover flight delays and cancellations which are not the airlines’ fault?

If you flight is delayed or cancelled, then your first port of call when it comes to refunds, compensation and rearranging flights will typically be your airline or tour operator.

But travel insurance and business travel insurance benefits normally extend to cover delayed travel. This generally becomes active after a specified length of time, which varies by insurance policy. For example, your policy might start providing benefits after a four-hour delay.

However, the cause of the delay must be specified as a covered reason in the policy.

Common causes include mechanical failure and inclement weather, but they could also include traffic accidents enroute to your departure, lost or stolen passports or natural disasters.

Travel delay coverage will have a per day and a total maximum benefit limit per person. Most travel insurance policies require only a few hours of delay and have a reimbursement level per person.

Does Business Travel Insurance cover subsistence costs relating to delayed travel?

Yes, as above many travel insurance policies will extend cover to reasonable expenses if you are delayed due to a reason covered by your policy.

For example, for meals, hotel accommodations and transportation.

But it will be important to keep in mind that travel delay benefits generally have a per day maximum and a total maximum, per person sum insured. If you need to pay for lodging and meals during a trip delay, keep the caps in mind.

How to find out what is covered by your Business Travel Insurance policy

If you are planning to travel in the near future for work, it will firstly be very important to have a business travel insurance policy in place before you travel. And secondly, it will be important to understand exactly what that business travel insurance policy will cover you for.

As an employer, make sure you understand the cover you are buying when taking out a business travel insurance policy by reading the policy wording fully, or discussing your insurance needs with your insurance broker.

When buying business travel insurance remember:

  • The most critical part of travel insurance is the provision for emergency medical expenses and repatriation costs. So, ensure your policy offers sufficient cover in this area
  • All policies will come with several conditions, such as requiring you to phone call centres to discuss any possible claims and to report incidents through to keeping receipts to support any claims. When you or your employees travel it will be important to have a summary with you of what you may need to do and the relevant phone numbers of those you may need to contact

Be prepared for the possibility of a delay

Whilst no one wants to think that their travel will be disrupted, given the current circumstances there is a possibility that this could happen to you. So, it will therefore be important to consider steps you can take to prepare if you do face a delay.

Pack with a delay in mind

Many insurers recommend that you pack for a single night’s stay in your carry-on luggage, just in case. It may also be advisable to have a document to hand which lists key contact details for your travel; tour operators, hotels or transportation companies or anyone else who you may need to contact to let know about any delays.

Embrace technology

Having apps on your smartphone or other electronic devices can come in handy in case of delays.

Apps can offer a convenient way to access your travel insurance allowing you to easily file and manage a claim. Airlines may have an app which enables you to track flights or receive live updates for flight delays. Or your tour operator may have an app which allows you to contact assistance and concierge services or someone who can assist with outreach to those tour operators who are in destination.

Have Access to Emergency Funds

It is likely that you will need to pay out for any expenses you incur before being reimbursed by either your airline or travel insurance policy. So, you may need to keep this in mind when travelling.

Have enough funds available to cover these expenses. And make sure you keep all records and receipts for anything that you do need to pay for to ensure that you can easily and smoothly make a claim for reimbursement.

Know the Caps for Reimbursement

Travel delay benefits generally have a per day maximum and also a total maximum, per person sum insured.  Or if you are claiming from an airline, they will also usually set their own limits and definitions of reasonable expenses.  If you need to pay for lodging and meals during a trip delay, keep the caps in mind.

The travel disruption currently being seen raises the timely issue of having sufficient insurance for the risks that your business faces. And one key area of this if you have employees who travel for work will be having a robust business travel insurance policy in place. If you are reviewing your business insurance needs, then do get in touch with one of our business insurance experts on 020 8290 9080 or email us at business@anthonyjones.com.

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