Ebola raising bigger concerns for risk management firms

Underwriting companies and risk advisory institutions are becoming conscious of growing risks in certain products and policies, as spread of Ebola takes deeper plunge across national borders including Europe and America.

For instance, Aon, the leading global provider of risk management and human resources solutions, recently launched an Ebola response product available to all health care institutions and features worldwide coverage on cases brought in the U.S.

Negotiated in partnership with Hiscox, the product covers scenarios where existing liability programs may not apply. The product provides up to $25m of liability coverage. It is available exclusively through Aon for a period of 60 days.

“The Ebola outbreak’s impact on the healthcare industry is raising questions and uncertainties for our clients around the world,” said Michael J. O’Connor, CEO of Aon Risk Solutions.

Marsh on the other hand, has released guidance to help UK organisations understand and manage the risk management and insurance implications.

Business travel insurance

Marsh advises that organisations should check the extent of cover provided by their insurer, but noted that one major insurer with whom Marsh places a significant amount of business travel insurance has confirmed it continues to cover medical expenses and repatriation costs related to Ebola.

However, Marsh explained that other insurers may take a different stance. Continued cover for medical expenses and repatriation costs are subject to normal policy terms and conditions and any logistical issues outlined below.

Any persons travelling or working within Ebola-affected countries need to be fully aware that in some parts of Guinea, Liberia, and Sierra Leone the medical infrastructure is severely compromised due to efforts to control the Ebola outbreak, said Marsh.

As a result, there are severe logistical problems in moving any patients due to travel restrictions, closed borders, the reluctance of other countries to accept patients from Ebola territories and a lack of suitable transportation.

Due to the narrowing commercial options for flights and the impact on medical facilities, the Foreign and Commonwealth Office (FCO) is advising against all but essential travel to these countries, except for those people involved in the direct response to the Ebola outbreak.

“Travellers need to be aware that even if their insurer is willing to provide repatriation to the UK in principle, in practice, evacuation may not be possible and they may have to be treated abroad. This limitation doesn’t just apply to Ebola sufferers, but also for any injury or illness that may be suffered,” explained Marsh in its advice.

Costs associated with the cancellation of any booked trip to an Ebola-affected territory are unlikely to be refunded by an insurer, as cancellation under these circumstances will be regarded as ‘disinclination to travel’, added the broker. This will remain the case unless the FCO changes its current stances and advises against all travel to these countries.

Liability insurance

Employers liability

There are no specific exclusions or conditions relating to any particular type of disease in compulsory UK employers liability (EL) policies, which provide cover up to £5,000,000 per occurrence, noted Marsh. Therefore, where the insured is legally liable for disease caused to their employees during the policy period this should be covered, subject otherwise to the terms of the policy.

Public and products liability

There are currently no specific exclusions or conditions in UK public and products liability (PPL) policies relating to Ebola. So where the insured is legally liable for the disease caused to third parties from their business activities and it occurs during the policy period, this should be covered-subject to the terms and conditions of the policy-noted the broker.

“This is likely to include, for example, a condition requiring the insured to take ‘reasonable precautions’ to prevent claims under the policy. What are deemed ‘reasonable precautions’ will depend on the circumstances.

“For UK multinational policies, which extend to include an element of ‘excess and/or residual’ cover for injury to the insured’s employees based permanently outside the UK, some such extensions will specifically exclude any disease claims. Additionally, all other PPL policy terms will also apply,” said Marsh.

Legal liability

Marsh explained that the question of whether a legal liability may exist, which is required in order to trigger coverage under an EL or PPL policy, will also be dependent on the facts of each case. But broadly this will be dependent upon whether the insured is considered to have breached its duty of care owed to the injured party.

Consequently, documented evidence of the insured’s health and safety policies, which address the relevant issues and are implemented in practice, will be important in the defence of any claim, said Marsh.

Business interruption insurance

Standard business interruption (BI) insurance cover is triggered only after the policyholder has suffered damage to the premises for which property cover is in force. Similarly, any policy extensions relating to denial of access, customers and suppliers and loss of attraction are only triggered by damage to the premises of surrounding properties, customers and suppliers.

An outbreak of Ebola would not constitute damage to property and therefore the policy would not respond to interruption caused by events such as closures due to the Ebola virus, warned Marsh.

It added that some may argue that biological contamination does constitute ‘damage’, but based on past experience with animal diseases, such as foot and mouth, this is unlikely to be accepted by UK insurers.

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