Author: Amy Ingram
Worldwide Clean Tech Segment Manager, Vice President
Chubb Group of Insurance Companies
Brazil, India, Mexico and China, as well as other countries with favorable resources, economies, and investment
environments are luring U.S. clean tech executives across international borders to meet and negotiate with foreign business leaders as well as explore new markets. A 2013 American Express Global Business Travel Survey found that those who travel outside of the U.S. for business reported taking an average of six international trips annually.
The global clean energy sector is projected to grow over the next decade from $248.7 billion in 2012 to $426.1 billion in 2022. This increased growth will be accompanied by increased business travel and potentially increased risk for clean tech executives as they accrue frequent flyer miles.
Clean technology companies are often global from the onset; however, they may fail to realize how global they are if they do not have operations in another country. According to the 2012 Chubb Clean Technology Survey, three out of four clean tech companies operate internationally.
As a result, clean tech executives could find themselves in a country with a rapidly shifting political climate or in locations with limited access to medical care. Before sending executives off to a potentially risky situation, clean tech companies should have a strategy in place to help protect their executives and manage the risk of business travel.
Business travel brings added risk exposure.
In the clean technology industry, business travel is abundant with executives who are sourcing component part manufacturers, scouting renewable resources and developing supply chains, as well as building financial and other business relationships. Due to the smaller size of many clean technology companies and the types of activities that take place on these trips, senior executives are frequently the ones that find themselves “up in the air.” These senior executives often are the company’s intellectual capital and their knowledge and effort is critical to the continued growth of the business. A critical or fatal injury or an illness could put the sustainability of the entire company at risk.
With so much intellectual capital at stake, clean tech companies need to consider developing a formal plan to manage the risk of business travel. Start by knowing where your employees are at all times and requiring employees to review pre-travel reports that outline country specific hazards prior to travel. Evaluate how many employees travel on an airplane at the same time. Key executives and employees should not travel on the same plane together, lest a worst-case scenario occur. But, there is more that can be done to help protect executives on the go.
Where to begin?
To get started, the following insurance products and risk mitigation best practices should be on the radar screen when thinking about a business travel risk management strategy:
Foreign Voluntary Workers Compensation
Workers compensation insurance, which employers are required to purchase in the United States, typically insures employees who are sick or injured while on the job in the United States. This policy may also provide some medical and wage benefits for employees who are traveling outside of the United States, but that feature is limited. Clean tech companies should also consider purchasing foreign voluntary workers compensation insurance designed to help protect executives and others who travel outside the U.S.
A foreign voluntary workers compensation policy can — in addition to providing medical benefits and wage continuation — apply to the additional expense of repatriating a sick or injured employee. Repatriation expenses can be very costly—for example, a medical helicopter evacuation costs about $60,000, while flying an executive who has suffered a stroke from a rural area of China back to the United States could cost as much as $150,000. Executives that need to be repatriated from China may also require special medical clearance and visas.
An additional benefit of having a foreign voluntary workers’ compensation policy is that sickness due to an endemic disease is not excluded. With the prevalence of malaria in a country such as Brazil, the medical expenses, lost wages and repatriation of an executive that is stricken with this endemic disease, which could be very costly, are addressed by the policy.
Business Travel Accident Insurance:
Every day threats like falling ill or being injured do not disappear when traveling. In fact, they are more likely to occur in an unknown and foreign environment. Many people board planes for international travel every day without thinking about what they would do if they were to become seriously ill, be involved in a car accident or get injured during a terrorist attack.
Political unrest doesn’t always come with advanced warning—from Syria to the Ukraine, Venezuela and Ecuador—it can quickly escalate. Natural disasters such as earthquakes, tornados and tsunamis, usually occur suddenly and the results are often devastating. That’s why having a strategy in place to help insure the health and safety of executives while traveling on business should be a top priority for clean tech companies.
Business travel accident insurance solutions will help defray the cost of a political or medical evacuation and pay for out-of-country medical bills. In addition to insurance, look for providers that offer travel accident services that are available 24 hours a day and include emergency medical transportation, pre-travel information and other key services.
Clean tech executives who are toting a passport can also create a layer of defense by packing required prescription and other types of medications, researching hospitals and other medical services in the areas they are traveling to, and keeping local emergency numbers on hand. Clean tech companies should also develop policies and procedures for responding to this type of risk and provide business travelers with that information as well as all relevant contact details. Regularly seeking expert advice from security consultants and designing contingency response plans for high-risk situations is also a best practice.
Kidnap/Ransom & Extortion Insurance
In parts of Latin America, Southeast Asia, countries that make up the former Soviet Union, and the Middle East, kidnapping has become a well-organized, profitable enterprise carried out with little fear of intervention by local law enforcement.
Those traveling to risky areas should consider proactively mitigating their exposure to such an event. Prior to the trip, clean tech executives should research the current local political and terror climate in the destination country. Executives who are meeting with new people should ensure their legitimacy, and may also find it beneficial to dress down or entirely change their attire. Sometimes business people are simply in the wrong place at the wrong time. Clean tech executives who are meeting with a local business contact with a high-profile, may want to consider additional security options and only meet in secure locations.
Kidnap and ransom insurance solutions can also help by offsetting some obvious expenses in these situations, including the costs associated with negotiations, paying the ransom, rescuing and transporting the victim and evacuating/protecting others caught in dangerous situations – including political unrest. Kidnap and ransom insurance also applies to the costs related to addressing extortion demands, rewards to informants, legal liability and costs for public relations crisis management, among others.
Clean technology companies–at any life stage–are very susceptible to global travel risk and must consider how these risks could impact their bottom line and longevity. While it may seem daunting to proactively tackle the complex web of global business travel risks, through the guidance of experts and the implementation of insurance solutions and services, companies can help safeguard their businesses and executives and lay a foundation for long-term success.
Amy Ingram is a vice president and worldwide manager of the clean tech industry segment for the Chubb Group of Insurance Companies. She can be reached at firstname.lastname@example.org.