Home > Property & Casualty > As Ebola threats continue, insurance options respond – or will they?

As Ebola threats continue, insurance options respond – or will they?

ebola_hospitalWhile the current Ebola pandemic still remains primarily isolated to West Africa, the death of Thomas Duncan earlier this month in Texas has raised many concerns relative to the potential spread of the disease globally. At this time, two nurses responsible for treating Duncan have both tested positive for the disease, raising questions about whether American hospitals and their staff are adequately prepared to contain the virus.

Any worldwide health crisis such as this is inevitably going to have an effect on businesses around the globe. The primary concerns companies face when dealing with Ebola are the protection of employees, (not just the obvious healthcare workers), and the potential impact to the company’s revenue as a result of an interruption in the company’s business operations.

The risk to employees should remain the top priority for any employer. Just yesterday, Zurich based ACE Ltd., a leading global property and casualty insurer, announced it may “impose restrictions on Ebola-related claims for businesses and organizations traveling to West Africa.” This is believed to be the first such move in the industry. ACE is the first company to formally go on record regarding its concerns about the financial exposure they could face if Ebola infections spread outside of West African countries, currently where the disease is primarily concentrated.

It remains to be seen how the rest of the insurance industry will respond in the coming weeks. The risk to employees should remain the primary concern for any employer as they attempt to manage this evolving risk. Most organizations have already evacuated their employees and halted all travel to affected regions. The question of Workers’ Compensation is one that insurers will look at closely as they try to determine if a sick employee was actually exposed and infected while in the scope of performing their job functions, healthcare workers being the most obvious population.

As an employer, a company must pay particular attention to compliance with health and safety laws and regulations, as well as the potential accusations of willful misconduct. The state required benefits will respond to the injured employee but the employer’s liability exposure could reach beyond what may be covered by insurance.

The disruption to supply chains is also having an unavoidable impact on business operations. Border closures and the shutdown of many ports is having a ripple effect on businesses who are dependent on products and services coming from affected regions. Traditional Business Interruption (BI) insurance is triggered by direct physical loss to property resulting from a covered peril. Insurers will carefully evaluate any allegations of contamination, etc. where customers are alleging BI losses and seeking reimbursement. There are policies available in the marketplace to cover BI losses resulting from Non-Physical Damage. WGA recently launched a new Pandemic Response product. The coverage responds to loss of income arising directly out of shutdowns of healthcare facilities and diminished revenue in the aftermath of a quarantine. The product, available through London-based insurers licensed in the U.S. and other world markets, responds to the need for coverage when there is non-physical damage but the organization still faces catastrophic loss.

It is important for Key Personnel to remain on top of developments and announcements made by critical organizations involved. Websites of the World Health Organization and the Centers for Disease Control should be consulted regularly to ensure that any decisions made do not violate any international healthcare standards or recommendations.

Additional resources are available and can be found on the State Department’s website to obtain current Travel Warnings and Alerts, country-specific information and a  Traveler’s Checklist, and Worldwide Caution updates.


About the Author

Jamie Balboni is the Property & Casualty Practice Leader at WGA. She is a Principal at the firm with over 25 years of experience in the insurance brokerage industry. She assists and guides clients on how to best mitigate risk in addition to developing and structuring comprehensive insurance plans for them.

617.646.0247 | JBalboni@wgains.com | Connect with Jamie on LinkedIn
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