Bermuda-based AXIS Capital Holdings Limited has announced that AXIS Healthcare has launched a new medical catastrophe business interruption product for hospitals in Canada and the United States to protect against a loss of revenue caused by the outbreak of a contagious disease.
Minneapolis-based AXIS Healthcare – the division of AXIS Insurance that provides professional liability insurance and associated standard casualty coverages for physician groups, hospitals, allied healthcare facilities and individual physicians – announced the AXIS Healthcare Medical Catastrophe Business Interruption and Extra Expense product on Thursday.
The product includes coverage for any disease that is transmitted by direct or indirect contact, AXIS Healthcare said in a press release. These diseases include bubonic plague, MRSA, Legionnaires’ disease, Middle East Respiratory Syndrome, Hantavirus, SARS, West Nile Virus, HIV, Ebola, Marburg virus, Lassa fever, influenza, and bird flu, as well as other lesser-known viruses or plagues. “The new product would also provide coverage for diseases that have not yet been discovered by science, or a disease that could mutate into a pandemic at some point in the future,” AXIS Healthcare added in the release.
The policy responds when the contagion directly results in any one of four triggers:
• A governmental quarantine of a hospital;
• If 25% or more of the medical personnel do not come to work;
• A 25% or more reduction in inpatient stays; or
• A 25% or more reduction in emergency room visits.
The maximum length of coverage is limited to 12 months from the date the coverage is triggered.
Prior to offering a quotation, a hospital must work with AXIS Healthcare on a pandemic preparedness assessment. The company will send, at its own expense, a healthcare risk manager with specialized skills in pandemic preparedness to assess the quality of the hospital’s pandemic program, the release said.
“AXIS Healthcare’s medical catastrophe coverage represents an industry first, and we are pleased to be able to offer North American hospitals a new tool to safeguard their critical operations against pandemics and other disease outbreaks,” said Peter Wilson, president of AXIS Insurance’s U.S. operations, in the release. “The healthcare industry is an important market for AXIS Insurance, and we are committed to applying our specialty underwriting expertise, service capabilities, and capital strength to provide innovative and competitive solutions like this one.”
Kimber Lantry, head of AXIS Healthcare, added that the new coverage “serves a critical need in the healthcare marketplace that has thus far gone unaddressed by the insurance industry.” Lantry pointed out that during the 2003 SARS outbreak, hospitals were identified as the source of the spread of infection, resulting in the partial or complete shutdown of three hospitals in Canada. In Texas, after an Ebola patient was admitted to hospital in October of 2014, the hospital lost “US$20.3 million in revenue over a two-month period, with a decline in inpatient days of 22% and a decline in ER visits of 49% during the first month.”