Insurers respond: New Ebola coverage, exclusions
Insurers are quick to see the needs and the danger in a problem such as Ebola care, and some already are responding with coverage options for potential losses. Some also are looking for ways to avoid paying for those losses.
The response of the insurance industry shows that the potential for financial losses related to Ebola are significant, notes Maureen Archambault, RN, MBA, HRM, CPHRM, FASHRM, managing director and west zone healthcare practice leader for Marsh Risk and Insurance Services in Los Angeles. Her company is one of several offering new coverage options.
"All the insurance companies are scrambling to respond, with some offering additional coverage for losses from business interruption and other effects," she says. "Some others are declaring an Ebola exclusion, and then you have some offering policies specifically for Ebola coverage, which could help with the costs of cleanup or having to close your facility for a while."
Archambault suggests that the Ebola concern is a good reason to review all insurance coverage for losses related to infectious diseases. Check everything from professional liability to workers’ compensation, property losses, and directors and officers, she says. Look for exclusions that could apply in an infectious disease scenario, and consider any new insurance products that could fill gaps.
A good first step is to sit down with your insurance broker and go over all the potential losses that could be related to Ebola or a pandemic, suggests Gigi Norris, managing director with Aon Risk Solutions’ Western Region Healthcare Practice in San Francisco, which also is offering insurance products for Ebola exposures. "Your pandemic plan can be a good place to start, even though it’s different because a pandemic will result in a very high degree of absenteeism," Norris says. "But it might give you a framework to think about planning for an event like this: where the challenges are, what losses you might face, what coverage you have or don’t have."
Miller Insurance Services and William Gallagher Associates (WGA), insurance brokers in Boston, jointly announced the availability of their Pandemic Disease Business Interruption Insurance, which responds to loss of income arising directly out of shutdowns of healthcare facilities as well as diminished revenues in the aftermath of a quarantine. Insurance for lost revenue arising out of a non-physical damage event such as a voluntary or involuntary quarantine of facilities and medical professionals is not available on most Business Interruption coverage forms, the brokers noted.
Marsh provides these points to consider when assessing insurance coverage and new policy options:
Even within an organization that has a thorough understanding of pre-loss measures, it is possible that an accident, a breach in procedures, or other event could cause an employee to contract Ebola. The risk also exists for on-site contamination or for the government to require a facility to close.
If a healthcare worker contracts Ebola during the course of employment, workers’ compensation insurance likely would provide coverage for costs related to treatment of the illness, lost wages, and, in a worst-case scenario, death benefits. Such an event could be expensive: Full isolation protocols, for example, can cost $1,000 per hour. Long-term complications from Ebola could require kidney dialysis and other treatments. In addition, local and state public health officials using Centers for Disease Control and Prevention (CDC) guidelines — rather than the employer and its insurer — likely will dictate dispensation of medication and other treatments.
An insured employee might choose to file suit against an employer for negligence rather than collecting statutory workers’ compensation benefits, in which case employers’ liability insurance could apply. But an employers’ liability policy typically includes a limit per accident, disease per employee, and disease per policy limit. If an underlying primary employers’ liability policy is properly scheduled to an umbrella and excess insurance policy, it should provide additional protection to insureds.
Infection control procedures could cause providers to shut down or restrict access to all or part of their facilities in an actual or suspected case of Ebola, or due to potential contamination after treating a patient. The resulting disruption of normal operations could lead to reduced admissions and a loss of revenue.
Property and business interruption (BI) policies are typically triggered only in the event of direct physical damage to or loss of an insured’s property as a result of a covered peril. Most healthcare organizations’ policies also contain communicable disease contamination sublimits that require an order of an authorized governmental agency prohibiting access as a result of a law or ordinance regulating the actual, not suspected, presence of a communicable disease. This wording means that without special provisions — for example, wording to broaden coverage — healthcare providers’ property insurance and BI policies likely would not be triggered based solely on the presence of Ebola.