Source: http://www.advisenrisknetwork.com, October 15, 2014
By: Chad Hemenway
We’ve wondered about the insurance implications of the Ebola virus as its entrance into the US and other countries has stoked concern and prompted leaders at the highest levels to think of, and plan to mitigate, worst-case scenarios.
The UN Security Council called the Ebola virus “a threat to international peace and security.” But how might the insurance industry be affected by this epidemic?
According to Steven Weisbart, vice president and chief economist at the Insurance Information Institute, said workers compensation insurers would likely be most affected “because healthcare workers could be most directly exposed.”
READ WEISBART’S ENTIRE PAPER: Facts and Perspectives on the Ebola Pandemic

Insurance penetration in affected Africa counties is diminutive but in the US, workers compensation is universal.
“But the likelihood of claims is low, assuming that employers and their workers take [Center for Disease Control]-recommended precautions,” Weisbart said.
Other lines of insurance such as medical malpractice, general liability and directors & officers could also be touched by the Ebola epidemic. It is not hard to imagine a hospital facing a med mal claim, alleging improper medical protocols—or that the virus wasn’t diagnosed or diagnosed too late.
Directors and officers could see shareholder suits if investors perceive companies to be inadequately prepared to handle the outbreak, resulting in a hit to business.
On the life and health side of the equation, the financial impact if the virus spreads to infect tens of thousands in the US will “likely be quite manageable” since about one-third of residents have life insurance with an average benefit of $200,000.
“In a typical year life insurers pay about 2 million death claims, so another 100,000 would only be 5 percent more than typical,” Weisbart said.
But also think about business ramifications and the trickle-down to insurance claims.
Logan Payne, senior account manager at Lockton, said: “The insurance options available for an Ebola-caused business interruption and subsequent loss of revenue are much more restricted [than evacuating an employee or providing emergency medical care], but there are still options available in the market.”
Policies for business interruption are usually triggered by a physical loss from a covered peril.
“Business interruption coverage may also extend to temporary closures due to ‘dependent properties, such as a major supplier to the policyholder. In addition, coverage may also be extended when civil authorities prohibit access to the policyholder’s premises due to a direct physical cause of loss of another property,” said Payne. “This may include the restriction of access to a contaminated entertainment or shopping venue in which the policyholder housed their business.”