Organizations in a number of industries ‚ including hospitality, real estate, sports, entertainment, and airlines ‚ may face direct exposures if people begin canceling travel plans or if employees become infected. Some major airlines and cruise lines have begun offering refunds to passengers with tickets to affected areas. And many organizations are looking ahead to potential impacts of the virus on the Summer Olympics set to take place in Brazil.
The Zika Virus is transmitted to humans by infected mosquitoes and appears to hold the most potential danger for pregnant women, although it’s effects are still being studied. WHO officials estimate that three to four million people could become infected over the next 12 months.
Risk and insurance implications
Property insurance: If the WHO or civil authorities impose travel restrictions, insurance recovery under property policies may be limited. Most civil authority coverage within business interruption property policies requires a covered or non-excluded peril and physical damage most likely to trigger coverage. However, some hospitality and gaming companies or others in related industries have a version of this coverage for “loss of attraction” with notifiable disease as one of the triggers.
Workers’ compensation: Domestic workers’ compensation and foreign voluntary workers’ compensation (FVWC) coverage may also be triggered if a worker were to contract the Zika virus while on assignment outside of the United States. Some insurers, however, have recently attempted to add exclusions to FVWC policies to limit infectious disease exposures.
As to the above and other potential insurance issues, organizations should confer with their insurance advisors to understand policy specifics.
Companies should also review their business continuity and pandemic plans. They should:
- Review applicable insurance coverage’s.
- Inform traveling employees of the risks and preventative measures.
- Consider changes to sick leave policies for employees in operations in affected countries.
- Ensure essential functions are covered if employees are out sick.
- Account for employee medical evacuation.
- Closely track claims and expenses related to worker absences and business interruption.
Additionally, organizations in the hospitality, gaming, tourism, or travel businesses in particular should review their public relations policies and customer/guest cancellation policies to avoid potential reputational issues.