To me this comes down to risk management. For business travel, a company makes a conscious decision about what fare type to purchase. Some choose to purchase fully-flexible tickets so they can change/cancel/refund the tickets if circumstances require. Some choose to purchase discounted/restricted fares and hope they don't need to incur the costs of changes/cancellations. Those buying the discounted tickets are willing to accept the risk that the ticket cost may be lost in circumstances as described by the op. However, over time they may have reaped significant savings over the cost of buying flexible/refundable fares.
So in this case its cost the op's company $500. How much has the company saved over time by purchasing discounted/non-refundable fares vs paying the higher prices for flexible/refundable fares?
In my experience, if there is a chance of needing to make changes or possibly cancel, its often cheaper in the end to purchase flexible/refundable tickets. If the travel is pretty much locked-in and little change of changes, then restricted/non-refundable fares can be good value. There is no "one-type-fits-all" solution, and in the op's case the need to cancel/refund may very well have been completely unforeseen. This is the risk associated with restricted/non-refundable fares and those purchasing such fares are accepting the risks associated with the savings compared with flexible/refundable fares.