Pandemic Illness, Contamination and Workplace Violence

About Pandemic Coverage

The experts seem to all agree -- it is not a question of if, but a question of when. When will there be a severe pandemic influenza outbreak?

In response, Hays Companies has developed a product to cover loss of revenues and extra expense emanating from pandemics., other illness, contamination and workplace violence.

The recent SARS epidemic demonstrates the vulnerability of the global market. The SARS epidemic was recognized as a global threat in March 2003, after first appearing in Southern China in November 2002. According to the World Health Organization during November 2002 through July 2003, a total of 8,098 people worldwide became sick with SARS, of these 774 died. By late July 2003, no new cases were reported, and WHO declared the global outbreak to be over.

The U.S. did not suffer the economic impact of SARS. However, in Canada, the economic impact was in excess of $1 billion. The tourism and hospital industry were severely impacted and Air Canada went bankrupt. Hospitals and schools were closed and 15,000 people were quarantined. SARS was mild by pandemic standards.

The last major pandemic of 1918 (Spanish Flu) took over 40 million lives compared to the typical flu season of 1 to 1.5 million. The Russian Flu (1889/90), the Asian Flu (1957/58) and Hong Kong Flu (1968/69) were mild pandemics accounting for no more deaths than a typical flu season.

What will the next pandemic bring? Estimates are that a severe pandemic would bring a 2% mortality rate (between 200,000 to 1.9 million people in the U.S. alone and between 180 and 360 million people worldwide). It would sicken 20% of the world’s population, and result in absenteeism rates in excess of 40%. It would cripple the economy and send it into a recession. The economic financial impact is estimated at between $220 and $670 billion in the U.S., and to the World GDP at between $1.25 and $2 trillion.

What does the policy cover?

The policy can cover business Interruption and Extra Expense losses resulting from the declaration of a pandemic including:

• Inability to continue business operations due to excessive employee absenteeism
• Inability to continue business operations due to fear by public (particularly crucial to the tourism, entertainment & hospitality industries) of public gatherings
• Inability to continue business operations due to government action including travel restrictions

While the Federal Government has in place procedures and an emergency response plan, it is limited to reducing the severity of a pandemic and slowing down the spread of influenza through isolation, quarantine, closing of schools and canceling large public gatherings. The Federal Plan does not provide any financial relief from a pandemic.

The Hays Pandemic program can provide limits of $25,000,000 up to $250,000,000. Coverage is recommended for the following industries:

• Tourism
• Hospitality
• Food and Restaurants
• Entertainment
• Manufacturing
• Education
• Hospitals

This is the first program of its type that has complete support of the underwriting community. All of the carriers involved are rated A+ by A.M. Best.