Business travel can be a significant cost area for SMEs, as well as a potential area of risk. We look at how creating a travel policy and getting the right level of insurance can ensure your people make their business trips safely and cost-effectively. 

If your staff need to visit customers or suppliers regularly, you may need to consider creating a travel policy setting out guidelines in areas such as maximum spend and how trips should be booked and paid for. Obviously, the main objective is cost control, but the comfort and convenience of travellers is important too. There’s little point sending someone to meet a key client if an uncomfortable flight or hotel stay mean they can’t represent your firm effectively. So spending limits need to be strict but sensible. 

Is your journey really necessary?

Your policy might set out the circumstances in which a trip is required. For many purposes a phone call, instant-messenger or videoconferencing session might be just as good as a meeting.

Some travel policies require staff to use specific hotels and airlines, but this approach may be counter-productive for smaller firms. “Also, SMEs are unlikely to be in a position to negotiate bulk discounts, which is one reason firms specify suppliers,” notes John Russ, Assistant Director of HSBC Insurance Brokers.
The choice of whether to use an agency or not depends on the scale of your trip. “If you’ve got the time, the internet offers many ways to compare prices and find the best deal yourself,” says John. “However, if you’re visiting more than one country, travel agencies come into their own, finding a range of alternatives for you.”

Capturing information

For air travel, you may want to define the class that staff can fly, which is likely to be standard for most SMEs, although you might stretch to business class if staff are flying with key customers. Your policy might also encourage early booking, which usually means cheaper fares, or avoiding flying during expensive peak hours. 

Your policy could also stipulate the payment method to be used, which helps to ensure that booking information can be captured and monitored. The usual practice is to require staff to use a corporate credit card for everything other than small purchases, so spending data can be obtained.

Travelling time is usually regarded as working time, so any hours spent travelling over the weekend, for example, can be claimed back or reimbursed in some other way. It’s unusual to bill clients for travel time or expenses; most firms aim to build the costs into their prices. However, if a client requests more meetings than you were expecting, you might want to consider making a charge.

Get the right cover

Getting the right insurance cover is a must. “Medical cover should be the key driver in any travel insurance policy, even within the UK,” says John. “It’s also worth including a ‘UK repat’ option so you can get people home easily; a few thousand pounds of extra expense could impact an SME quite seriously. Cancellation cover is essential. Cover for baggage, personal effects and business money are other options, although many firms now include them in their commercial combined policies.”

“Insurance is often available bundled with flights or from travel agents, which can be an easy option, but a specialist broker can often offer savings,” he adds. Business travel insurance policies are taken out on a yearly ‘man/trip’ basis; for example, a firm might expect a total of 20 weeks of travelling, undertaken by five people, and insure on this basis.

Finally, remember to communicate your travel policy and make sure it is actually enforced. If senior managers abide by it, others will feel better about doing so. Explaining the reasons for the points in the policy can also help to ensure compliance.