United States: Insurance Coverage For Possible Ebola Claims

Originally published in Anderson Kill's Policyholder Alert, October 2014

As Americans absorb news of the first Ebola cases on U.S. soil, job one is to maintain perspective, and confidence in the ability of U.S. public officials and health care providers to contain the disease. Ebola is difficult to contract, and widespread outbreaks in the U.S. remain unlikely. That said, the risk of being affected by Ebola — either directly or indirectly — is a significant concern for businesses across the country.

While the first concern of every business is the safety of its workers and customers, most will not need to take special operational measures. Exceptions include those in the health care, hospitality or travel businesses. At present, the Centers for Disease Control and Prevention workplace guidance (http://www.cdc.gov/vhf/ebola/index.html) is directed solely toward health care providers.

Companies in industries most at risk — and, to a lesser extent, companies generally — do need to take prudent measures to mitigate potential financial losses stemming from Ebola or other infectious disease outbreaks, including review of the coverage provided by existing insurance policies. Since policy language varies, businesses should review current exposure and take steps to secure coverage where it may be lacking.

Some insurance brokers and insurance companies are rushing to market policies specifically designed to cover Ebola-related losses. Companies most at risk, such as hospitals, may want to consider buying such coverage, but they should first closely analyze whether existing policies, e.g., hospital pollution liability, already provide adequate coverage. Other insurance that may protect against the risks posed by Ebola and other infectious diseases include business interruption, workers' compensation, general liability, D&O and E&O. Below, we consider each in turn.

Business Interruption

It's an ordinary morning at the Dew Drop Inn — until news breaks that a guest who checked out the prior afternoon is now in isolation at nearby Mercy Hospital, diagnosed with Ebola. By noon, 40% of reservations have canceled.

Business income losses caused directly or indirectly by Ebola can be covered under business interruption insurance. Business interruption coverage is typically purchased as part of a business's property insurance. This important coverage is designed to protect businesses against lost profits due to disruptions to their operations. Contingent business interruption coverage may apply to losses stemming from similar disruptions to a company's suppliers or customers — but usually only if the underlying cause of damage is covered with respect to the policyholder's own property.

In most property policies, business interruption coverage is triggered when the policyholder suffers physical damage to insured property. Physical damage, however, can include contamination. Moreover, some policies, particularly those written for policyholders in the hospitality industry, expressly provide coverage for losses stemming from infectious diseases without requiring other physical damage to property. Further, many property policies include civil authority coverage, which is triggered when authorities limit access to an area in which a business is located, even if there is no physical damage to the policyholder's premises.

In recent years, hospitals and other health care facilities have become increasingly aware of the business risks posed by hospitalacquired infections, and many — though by no means all — have bought hospital pollution liability coverage, which can include business interruption, as well as disinfection and remediation, evacuation of patients, emergency expenses and crisis management. Some brokerages are rushing to introduce business interruption coverage specifically for Ebola — which may or may not be redundant for health care facilities that have purchased hospital pollution liability insurance. At the same time, certain insurance companies are warning that they plan to introduce exclusions for Ebola-related losses on new and renewed coverage sold to policyholders with increased risk of such losses.

Workers' Compensation

It was an unpleasant morning for the bussing staff at the Sunshine Diner, after a customer vomited in the bathroom. That afternoon, news breaks of an Ebola case in the city hospital. By evening the patient's movements have been documented — and included breakfast at the Sunshine. Staff are instructed to take their temperature twice a day. Ten days later, a staff member develops a high fever and is subsequently diagnosed with Ebola.

Assuming one or more of a company's workers become ill, are those workers entitled to workers' compensation benefits? The answer depends on how the worker became ill, and the nature of the illness. Virtually every state's workers' compensation statute provides that an employee is entitled to benefits for what is known as an "occupational disease." To constitute an "occupational disease," two conditions must be met: (1) the disease must be due to causes and conditions that are characteristic of and peculiar to a particular trade, occupation or employment; and (2) the disease cannot be an ordinary disease of life, to which the general public is equally exposed outside of employment.

While occupational diseases are covered and ordinary diseases generally are not, there are circumstances where the latter may be covered if a direct causal connection to the workplace can be established. Because Ebola is generally contracted only through contact with an infected person's bodily fluids, the question of whether a worker contracted the disease in the course of employment is likely to be clearer than with other diseases.

Many workers' compensation insurance policies, particularly policies providing excess coverage, provide insurance coverage beyond an initial self-insured retention for each accident and/or each employee, after which unlimited coverage is provided up until the applicable statutory caps. Thus, if an illness is deemed to constitute a "disease," most policies would apply a separate retention for each individual employee asserting a "disease claim."

However, if an illness outbreak is triggered by a causal event at the workplace and directly flows from the work being performed — which is likely in Ebola cases — it may be argued that the resulting disease has been produced by an "accident" causing bodily injury, as opposed to a disease. In this case, a business would only be required to pay one self-insured retention, no matter how many employees were actually exposed to contagion or contaminant.

CGL, D&O and E&O Coverage

A large city hospital that is part of a larger for-profit entity is caught flat-footed when a patient admitted to the emergency room develops Ebola. It emerges that the patient sat for hours in the crowded emergency room before being treated. Staff who first treated the patient did not have adequate protective gear or handson training. A nurse, a nurse's aide and two orderlies develop the disease. The public shuns not only the hospital in question, but all hospitals throughout the chain. Shareholders sue, alleging managerial negligence caused them financial harm.

Commercial general liability insurance is designed to cover against claims alleging that the policyholder's conduct caused bodily injury to the claimant, such as sickness or disease resulting from exposure to harmful conditions. Since most claims by sickened non-employees fit this description, commercial general liability coverage is a key source of protection.

Due to how disease is contracted and spread, any policyholder that receives even one such claim faces the risk of being the target of additional claims. Thus, it is important that notice be given as soon as possible to prevent the insurance company from denying coverage on grounds that it was prejudiced by late notice that prevented it from helping to stem the policyholder's exposure.

It is possible that individuals other than those personally sickened, e.g., shareholders in companies adversely affected by an outbreak, may make claims against companies or their executives based on allegations that management's acts or omissions caused such claimants to suffer financial losses. Directors' and Officers' policies may respond to such a claim. Although most D&O policies contain exclusions for claims alleging bodily injury, claims for financial damages are covered under D&O insurance. In most cases, the bodily injury exclusions should not come into play in financial claims — though some broadly written exclusions may prove problematic. As with commercial coverage, it is important that when policyholders become aware of such claims, they give notice to their insurance company as soon as possible, and certainly before the policy and/or reporting period for their current D&O coverage expires.

Hospitals and health care facilities often purchase specialized errors and omissions, or hospital professional liability coverage for damages that the facility must pay because of injury or death arising out of the provision or failure to provide professional services such as "medical, surgical, dental, nursing, counseling or psychological diagnosis or treatment to such person." Hospital liability policies frequently contain exclusions holding that the insurance does not apply "to bodily injury to any employee of the insured arising out of and in the course of employment by the insured." Thus, if a nurse sues her place of employment claiming she contracted Ebola because the hospital did not implement the appropriate safety protocols, there may not be coverage for the hospital under a standard medical E&O policy — but there should be coverage under workers' compensation policies, as noted above. However, if another patient alleges that he contracted the disease because he was placed in a room with a patient who was later diagnosed with Ebola, that case could potentially be covered. At issue will be the policy's definition of "professional services," and whether the allegations fall within that definition (i.e., HPL coverage would be triggered) or not (i.e., CGL coverage would probably be triggered).

Read the Policy

For each type of insurance, coverage may depend in large part on language specific to the policy. Risk managers should conduct a coverage analysis now to determine what coverage exists and whether to consider changes or additions.

Marshall Gilinsky is a shareholder in the Washington, D.C. office of Anderson Kill. Mr. Gilinsky's practice is focused on property insurance, commercial general liability insurance, directors' and officers' insurance, captive insurance and reinsurance issues. mgilinsky@andersonkill.com

Diana Shafter Gliedman is a shareholder in the New York office of Anderson Kill. Ms. Gliedman represents policyholders in actions ranging from small insurance coverage disputes to multi-party, multi-issue insurance coverage litigations. dgliedman@andersonkill.com

About Anderson Kill

Anderson Kill practices law in the areas of Insurance Recovery, Commercial Litigation, Environmental Law, Estate, Trusts and Tax Services, Corporate and Securities, Antitrust, Banking and Lending, Bankruptcy and Restructuring, Real Estate and Construction, Foreign Investment Recovery, Public Law, Government Affairs, Employment and Labor Law, Captive Insurance, Intellectual Property, Corporate Tax, Hospitality, and Health Reform. Recognized nationwide by Chambers USA for Client Service and Commercial Awareness, and best-known for its work in insurance recovery, the firm represents policyholders only in insurance coverage disputes - with no ties to insurance companies and has no conflicts of interest. Clients include Fortune 1000 companies, small and medium-sized businesses, governmental entities, and nonprofits as well as personal estates. Based in New York City, the firm also has offices in Ventura, CA, Philadelphia, PA, Stamford, CT, Washington, DC, Newark, NJ and Dallas, TX.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.