Ebola to impact P&C industry
The Insurance Information Institute (III) has published ramifications for the insurance industry of the spread of the Ebola virus which, at the time of writing, has infected at least 8,399 people and killed 4,035, according to the World Health Organization.
As of October 10, 2014, all but four of the cases were in four countries in Africa (Guinea, Liberia, Sierra Leone, and Nigeria). One was in Senegal, one in Spain, and two in the US.
According to the III, the main effect on the property/casualty industry would likely be on companies writing workers’ compensation, as healthcare workers are the people most directly exposed.
As with life insurance, it is unlikely that many workers in the affected African countries have workers’ compensation coverages.
In contrast, “US workers’ compensation coverage is nearly universal, but the likelihood of claims is low, assuming that employers and their workers take Centers for Disease Control and Prevention (CDC) recommended precautions,” the III said.
“As with life insurance coverage, reinsurance will help mitigate the financial effect of a surge in claims, which are likely to be very costly in the event of actual work-related infections.”
Various liability insurance lines, including general liability, D&O liability and medical malpractice (med mal) could also potentially be affected by the spread of the virus.
General liability and D&O claims might be filed asserting that the policy-owner was negligent in failing to prevent transmission of the virus. For example, a claim might be filed alleging negligent disposal of contaminated waste, pursuing either general liability or med mal recovery.
As the III explained, “Med mal claims might assert that proper medical protocols were not followed, resulting in infection by the Ebola virus, or that the disease was not properly diagnosed or diagnosed in a timely manner or that the treatment protocol itself and/or care rendered was somehow negligent.”
“At this stage it is impossible to forecast the precise number of such claims or the amounts of damages that might be sought,” it concluded.
“That said, assuming the CDC’s protocols are successfully followed, the number of Ebola cases should be small, thereby limiting the number and likelihood of tort actions that can impact various liability coverages.”
