EbolaInsurance companies now write Ebola exclusions into policies; offer Ebola-related products

Published 27 October 2014

U.S. and British insurance companies have begun to write Ebola exclusions into their policies for hospitals, event organizers, airliners, and other businesses vulnerable to disruption from the disease. As a result, new policies and renewals will become more expensive for firms looking to insure business travel to West Africa or to cover the risk of losses from Ebola-driven business interruptions (BI).The cost of insuring an event against Ebola, for example, would likely be triple the amount of normal cancellation insurance — if the venue was in a region not known to be affected by the virus.

U.S. and British insurance companies have begun to write Ebola exclusions into their policies for hospitals, event organizers, airliners, and other businesses vulnerable to disruption from the disease. As a result, new policies and renewals will become more expensive for firms looking to insure business travel to West Africa or to cover the risk of losses from Ebola-driven business interruptions (BI). “What underwriters are doing at the moment is they’re generally providing quotes either excluding or including Ebola — and it’s much more expensive if Ebola is included,” said Gary Flynn, an event cancellation broker at Jardine Lloyd Thompson Group Plc in London.

According to Flynn, the cost of insuring an event against Ebola would be triple the amount of normal cancellation insurance, if the venue was in a region not known to be affected by the virus. So far, no major events have been canceled in the United States due to the Ebola threat; but news of New York’s first Ebola case has forced event organizers who expect a significant portion of attendees to arrive from Africa to take precaution.

Retail insurance broker William Gallagher Associates of Boston and Miller Insurance Services, a London-based independent specialist insurance broker, recently partnered to launch Pandemic Disease Business Interruption Insurance to deal with loss of revenue due to shutdowns of healthcare facilities or forced quarantine measures.

Though Ebola has had little presence in the United States, threats of the disease could disrupt key business operations. Vulnerable employees like healthcare workers or flight attendants may refuse to come to work for fear of infection. “Probably the biggest issue coming up is business interruption,” said Tony DeFelice, managing director of Aon Risk Solutions’ national casualty practice in the United States. Unfortunately, many property or business interruption policies are triggered only by direct physical damage, according to Insurance Journal. “This means that without special provisions – for example, manuscripted wording to broaden coverage — healthcare providers’ property insurance and BI policies would likely not be triggered based solely on the presence of Ebola,” insurance broker Marsh said.

Lockton, the world’s largest privately owned, independent insurance brokerage firm, notes that BI coverage may also extend to temporary shutdowns due to “dependent properties,” such as a major supplier to the policyholder. A recent outlook on the effects of Ebola on global business suggests that BI is “most likely to occur in mining, agricultural, energy, chocolate and travel sectors that have a strong presence in the affected West African countries.”