What is the ruling on the money that the insurance company paid to the employee in exchange for his lost belongings, and is it permissible to spend it on good causes if it is not lawful?

Commercial insurance is forbidden because it involves usury (riba), gambling (maysir), and excessive uncertainty (gharar). What should be done is to demand compensation from the airline or travel agency responsible for the loss of luggage, unless the loss was due to the traveler's negligence.

If an insurance contract was entered into, the insured is only permitted to take from the insurance company the amount of premiums they paid. The money received up to the amount of the premiums, or less, is permissible. As for any excess, it must be given in charity to good causes.