Insurer Warns About Ebola and Coverage

Source: Dow Jones News Service, October 21, 2014
By: Leslie Scism

A major insurer is warning customers it may impose restrictions on Ebola-related liability claims for businesses and organizations with employees traveling to West Africa, in what is believed to be the first such move by the insurance industry as economic ripple effects of the deadly disease spread.
Zurich-based ACE Ltd., a leading global property-and-casualty insurer, has begun selectively excluding Ebola from its coverage “on a case-by-case basis” for U.S. customers “that have foreign travel exposure to certain African countries,” the company said in a statement to The Wall Street Journal Tuesday.
The possible exclusion applies only to new and renewal policies, “based on information about each company’s travel to and operations in select territories,” the company said.
Insurance-industry participants said ACE appears to be the first major insurer to go on record flagging its concerns about the financial exposure it could face if Ebola infections spread widely outside the African countries where the problem is now concentrated.
Insurance executives and brokers said the types of customers potentially affected by ACE’S move could include energy and commodities firms, media businesses, nongovernmental organizations and religious groups.
Robert Hartwig, president of trade group Insurance Information Institute in New York, said he wasn’t aware of any insurers putting such restrictions into place, but said “it is standard operating procedure for insurers to adjust the questions they ask when it comes to underwriting an insurance policy in the face of new risks.”
Insurance companies can deny coverage to customers with higher risks, charge them a higher premium or put caps on payouts for claims.
Business insurers have fairly wide latitude to adjust the terms and conditions of policies they renew or sell to new customers, unlike insurers selling consumer car and home policies, which can be subject to strict regulatory oversight by state insurance departments.

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