Insurance Companies Exclude Ebola from New Policies

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( — October 23, 2014)  — In consideration of the fact that Ebola has killed more than 4,500 people in West Africa, British and US insurance companies have begun writing Ebola exclusions into standard policies, as fear of the disease spreads to developed countries.

The move boosted prices for companies opting to insure business travel to West Africa, industry officials told Reuters.

“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.

In the United States, such policies as workers’ compensation for medical care and lost income are regulated at state level, so Ebola exclusions are unlikely.

Some insurance companies calculated that other diseases such as influenza are arguably more likely to cause measurable harm in the West. Others are considering Ebola before writing or renewing policies.

Insurance companies are more focused on the risk of business problems for those companies who work with African countries that are hit by the Ebola crisis.

“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.

Though a business interruption could be provoked by Ebola, from loss of key employees due to quarantine or sickness treatment in the hospital, many property and business interruption policies are triggered only by direct physical damage to property, insurance broker Marsh wrote this month in a note on Ebola.

“This means that without special provisions, property insurance and BI policies would likely not be triggered based solely on the presence of Ebola”, Marsh said.

While some companies closely monitor the outbreak so they can help clients protect from potential risk, others, like JLT’s Flynn, claim the cost of insuring an event against Ebola would be about triple the amount of normal cancellation insurance, if the venue was in a region not known to be affected by the virus.

No events have yet been cancelled in Britain or the US as a result of Ebola, with only three cases having been diagnosed in the United States to date, and none in Britain. Concerns have been growing and Ebola has become a major factor in the current US election campaign.

The US government said on Tuesday, that travelers arriving from any of the three centers of the outbreak, Liberia, Sierra Leone or Guinea, must fly into one of five airports that have mandatory Ebola screening in place.