An Interview With Dr. Steven Weisbart

Dr. Steven Weisbart, senior vice president and chief economist of the Insurance Information Institute, spoke with us today in regards to A (H1N1)u and its implications on businesses.

In terms of workers comp and business interruption, do you see any impact in those areas due to this outbreak?
Not in terms of business interruption, the disease is typically not an insured peril for that so I would say, unless we’re talking about very specialized events that have specialized event interruption insurance, there would be no business interruption implications that I could see.

In terms of workers comp you’d have to demonstrate in satisfactory fashion that contracting the disease arose out of, or in the course of, employment. I would think that that would be somewhat hard to prove unless maybe a cluster of employees at a given employer came down with it and then you could argue that they gave it to each other at the workplace. So I think it would be kind of a case by case thing. Obviously employers would be well advised to take the kind of mitigation measures and prevention measures like keeping sick people at home. But there may be some workers comp claims out of this.

If the CDC imposes travel restrictions, would your outlook change on that?
No. I mean, there are cases where order of government authority is a covered peril, but that typically has to do with situations like if there’s a fire, or other kinds of physical situations that the police or fire department require you to not travel to a physical location. This is different I think. So as a broad statement, I would say no, that doesn’t change my outlook.

Do you think this is likely to hit phase 6 as issued by the WHO and if so, would that change anything in terms of workers comp or business interruption?
There’s certainly a chance to get there and I think it depends on how the course of the disease goes. We’ve apparently had a very different experience in the U.S. than from what’s going on in Mexico. If Mexico had had our experience, I don’t think we’d be where we are today. But I don’t think anything would change from now in regards to workers comp or business interruption. I think the reason claims would or wouldn’t be paid would be true under current or worse conditions.

Every year the average flu kills tens of thousands of people in the U.S. and hundreds of thousands of people worldwide. With that in mind, do you think this is a complete overreaction from the public and the media?
Oh no. We’ve been worried about infectious influenza certainly in recent years since SARS and the bird flu strain was identified and I think that given the seemingly rapid spread of infection that this is an appropriate level of concern. It appears, at least in the U.S., that this is not as deadly as it appears to have been in Mexico but there’s nothing to say the strain couldn’t mutate and become deadly, so I think we should be as alert and as extensive in communication about this as possible. I don’t think this is an overreaction at all.

Do surgical masks really help?
The only masks that might be of some help are the N95 masks and the reason they might be of some help is because they are much finer in their ability to block out droplets that might contain the virus. Anything that is not as fine a filter as an N95 would probably be of no help at all.

Pandemic Alert Raised to Phase 5

The World Health Organization has raised its pandemic alert for A (H1N1) to phase 5, indicating the outbreak is one step short of a full pandemic. The organization urged all countries to implement their pandemic plans on fear A (H1N1) could reach phase 6, indicating a full-blow pandemic.

We will be releasing a detailed briefing tomorrow for all in the risk management and insurance sector. Please stay tuned.

A (H1N1) Update

This will most likely be the first of many updates in regards to the recent A (H1N1) outbreak. As of this morning, the World Health Organization reported that U.S. A (H1N1) patients may have transmitted the virus to others in the U.S., which means it is not only being transmitted from people travelling back from Mexico, but has essentially found a new host country. Not good news.

With this in mind, businesses should begin thinking about their rarely used contingency plans. Below, Contingency Solutions, a business continuity and emergency planning firm, has provided a few updates for businesses:

  • CDC continues to assist Mexican health officials in the investigation. 
  • Major public events in Mexico have been cancelled and schools have been closed. Mexican death toll is currently 149.
  • U.S. confirmed cases include: 28 in New York City, 7 in California, 2 in Texas (and one additional suspected case in TX), 2 in Kansas and 1 in Ohio.
  • This is a new strain and flu shots from this past season will not offer protection.
  • The World Health Organization has raised its pandemic alert for A (H1N1) by one level to phase 4, two steps short of declaring a full-blown pandemic. Says: Flu containment is not feasible. Phase 4 alert means sustained human-to-human transmission is causing outbreaks in at least one country.
  • No U.S. travel restrictions are currently posted.
  • No border restrictions are currently in effect.

DHS Secretary Napolitano said the U.S. is proceeding as if it were preparing for a full pandemic.

“Everybody is getting prepared, everybody is leaning forward, everybody’s dusting off their pandemic flu preparation plans in case this is in fact a major pandemic,” she said.  

But is there really something to fear here? According to today’s BBC’s report, many of the UK’s leading experts on flu think this outbreak will not be as devastating as expected, though they caution it’s still too early to tell.

It’s time to dust off your business continuity plan and be ready in case it needs to be activated. Elements which may be of high priority include the means for employees to work from home, moving to a reduced travel mode (substituting web based meetings etc.), dealing with increased absenteeism due to employee reluctance to commute by train, bus or subway and, of course, keeping the lines of communication (internal and external) open.

For more information about the A (H1N1) outbreak, you can check out MSNBC’s thorough coverage (which includes the map below) and the instant updates provided by the following agencies:

Do you feel this is something that will develop into a pandemic and require companies to resort to their contingency plans?


Security at Sea

The NASDAQ news service has reported that Spain has officially allowed its vessels to employ private security guards to protect the ships crew and cargo while sailing the pirate-ladden waters off the coast of Somalia.


Spain’s ministry of the interior granted permission for this measure after numerous news reports about the escalating problem of cargo ships being hijacked in the Gulf of Aden.

Though countries such as the U.S., China, India, Russia and Turkey have stepped up their anti-piracy regime, the sea-faring scoundrels refuse to back down.

The private radio station Cadena Ser said one Spanish vessel, a cable-laying ship, Teneo, has already benefited from the decision and is traveling with 10 private, armed security guards on board.

In other, related news, just this weekend, security forces aboard a cruise ship with 1,500 on board used guns and water hoses to fight off encroaching pirates.

The dramatic confrontation was sparked when six men in a small skiff sped up to the MSC Melody late on Saturday, firing their AK-47s and trying to fix a ladder to the side of the ship. A team of Israeli guards hired by the vessel’s owners immediately began firing back with pistols and spraying the attackers with fire hoses. ‘It felt like we were in a war,’ said Commander Ciro Pinto, the Melody’s captain.

For a more humorous, yet factual, blurb about this serious issue, check out The Wall St. Journal‘s 10 Things You Didn’t Know About Somali Pirates.