With the first Ebola cases appearing in the U.S and its spread continuing in West Africa, workers compensation insurance could take at least a small hit due to health-care employee exposure, the Insurance Information Institute said.
“The main effect on the property/casualty insurance industry would likely be on companies writing workers compensation insurance because healthcare workers could be most directly exposed (as happened in Texas and several African countries),” I.I.I. Senior Vice President and Chief Economist Steven Weisbart wrote in an Oct. 13 paper for the organization exploring Ebola’s possible effects on the overall insurance industry.
Why workers compensation?
“Workers compensation pays for the cost of medical care and lost income for people who become ill over the course of their work, and pays death benefits if they die from a work-related cause,” Weisbart explained.
The I.I.I. report suggested that workers compensation, like life insurance, will take relatively limited hits, because “it is unlikely that many workers in the main affected African countries have workers compensation-type coverages.”
I.I.I., in the report, noted that Swiss Re issued its own document stating that the level of premiums per capita for all non-life insurance coverages combined (including workers compensation) in the three West African countries most affected by Ebola “is so low as to not be listed.” In the U.S., however, the I.I.I. report pointed out that workers compensation coverage in the U.S. is close to universal. Still, “the likelihood of claims is low, assuming that employers and their workers take CDC-recommended precautions.”
Weisbart’s I.I.I. report said that reinsurance could help mitigate any financial effect of a surge in claims. Those claims could be “very costly in the event of actual work-related infections,” the report noted.
The I.I.I. report noted other liability insurance lines that could be adversely affected by a continued and growing Ebola outbreak. They include: general liability, directors & officers liability and medical malpractice liability.
As of Oct. 10, Ebola infected at least 8,399 people in the global outbreak and killed more than 4,000, the I.I.I. noted, including two U.S. cases. Ebola also has a 50 percent mortality rate. But the Centers for Disease Control and Prevention doesn’t expect Ebola to infect patients in the U.S. other than “a small number of healthcare workers and others who have had direct contact with the bodily fluids of an infected person.”