I remember as a child my teacher asking me how much money I'dhave if he gave me a penny and I doubled that penny each day forone month. I was astounded at the outcome of $5,368,709.12 afterjust 30 days of compounding.

Now, let's consider a more human element. Consider the number ofpeople you come in contact with each and every day, or even yourprimary contacts. Then consider the people who had contact withyour primary contacts and would be considered secondary contacts.Next multiply this by any number from 2 to 21, which is theincubation period for the Ebola virus. Now add to the equation thefirst documented case of Ebola in the United States.

According to NBC News, the patient came from Liberia. He leftMonrovia Sept. 19 and arrived in the United States Sept 20. Healthofficials won't give many details about the patient, but Centersfor Disease Control and Prevention director Dr. Thomas Frieden sayshe was visiting relatives who live in the United States, implyinghe may not himself be a U.S. citizen. Health officials also say hedoes not appear to have been a health worker. Prior to this case,the four Ebola patients evacuated to the U.S. for treatment haveall been American doctors or medical missionaries.

About Ebola

The Ebola virus causes an acute, serious illness which is oftenfatal if untreated. Ebola virus disease first appeared in 1976 intwo simultaneous outbreaks, one in Nzara, Sudan, and the other inYambuku, Democratic Republic of Congo. The latter occurred in avillage near the Ebola River, from which the disease takes itsname.

Ebola is often fatal in humans and primates. It generallyspreads from wild animals and in the human population throughcontact transmission. Despite this, it is important to notethat there have been previous studies that did correlate airborne transmission of the virusthrough pigs to monkeys.

This may be a valid concern, as the Ebola virus is thought tomutate frequently. The biggest concern is a potentialmutation could cause easier transmission of the deadlydisease.

The average Ebola fatality rate is around 50%, ranging by strainfrom 25% to 90% in past outbreaks. Ghastly symptoms includefever of greater than 101.5, severe headaches, muscle pain,weakness, diarrhea, vomiting, and unexplained bruising andhemorrhagic bleeding, often leading to organ failure, shock anddeath.

Previously, Ebola has been limited to villages in CentralAfrica. This year has been a much different story, with the latestoutbreak occurring in major population centers of West Africa. Now,the first documented case has been reported in the United States.So what does this mean from a claims perspective?

It was originally reported that the current victim soughtmedical care on September 24^th at which time he wasreleased back into the public. On the 26^th he returnedfor care to a different facility, was admitted and proper isolationmethods were applied. Is there potential liability on the firstmedical facility should others come down with this disease? Whatabout the first responders who are now in quarantine? Did they havecontact with others? What about the ambulance that providedtransport? Has it been properly sanitized? Was there a periodof time when others were needlessly exposed to Ebola?

It is unlikely that the victim knew he had Ebola when cominginto the United States, although in this day and age of increasedthreats against the homeland, bioterrorism should never be ruledout. The bigger concern is the advent of a true pandemic not seensince the 1918 influenza that is estimated to have killed 100million people.

PandemicInevitability

Through the prism of history, pandemics have occurred every 30to 50 years. Given the frequency and typical life expectancies,most people will see one to two pandemics in their lifetime. Inmany situations, the young and old are often the majority of thevictims due to developing or weakened immune systems. However, the1918 Spanish influenza pandemic was relatively indiscriminant.Arguably the worst pandemic of the 20^th century, thispandemic occurred on the heels of WWI, killing more people than thewar itself.

The last global influenza pandemic was in 1968, with the HongKong flu. AIDS is considered a pandemic which rose to prominence inthe 1980s and still has no cure.

In the early 2000s, there was concern about SARS and the avianinfluenza, or bird flu. These viruses had high mortality rates andwere spreading rapidly. Fortunately, they were eventuallycontained. Now we are faced with the possibility of Ebola, alreadya pandemic in Liberia, Guinea and Sierra Leone. This is atremendous concern due to the high mortality rate and the toll itwill take on the healthcare industry.

According to Lloyd's of London, a repeat of the 1918 event isexpected to cause a global recession with estimated impacts rangingfrom 1% to 10% of global GDP. Most industries will be affected,some more than others. In particular, industries with significantface to face contact such as airlines, hospitality, or even someclaims organizations. Insurers investment assets may be affecteddepending on the mix held. Wider economic and social effects maylead to secondary forms of loss for insurers.

Liability Potential

The potential impact for life and health insurers is prettyclear. In the event of a pandemic such as Ebola, emergent care isalways required, and the high mortality rate will cause a spike inlife insurance claims. There will be a tremendous strain onavailable resources trying to provide general support.

But what about other forms of insurance? Consider the impact tomedical malpractice, which may come into play with the earlyrelease of the latest victim from the hospital. What aboutthe implications for D&O (Directors and Officers) liability orgeneral liability policies?

Specific products such as business interruption and eventcancellation could see a rise in claim activity, although there maybe some limitations for pandemic losses that could curbpayouts.

There are also other impacts to consider such as the global orsocial turmoil that a pandemic could instigate. If emergencyservices are strained, this could have a ripple effect on millionsof lives.

Consider the social unrest following the acquittal in the RodneyKing trial, the botched Hurricane Katrina response or more recentlythe Ferguson shootings. In those cases there were limitedresources. What if there is a disaster of national proportions?With law enforcement already running lean, what havoc will ensue ifthese resources are preoccupied containing a pandemic?

Prevention

Given the rapid mutations of viruses, it is difficult to provideantiviral medication and develop vaccines. Even with the flu virus,for which millions receive flu shots, there is only protectionagainst certain strains. Ebola is far more challenging withmultiple strains, a high mortality rate, and limited research anddevelopment. It has not yet been an American epidemic, thereforemuch of the pharmaceutical R & D has focused on more pressingproblems.

The biggest concern is arguably globalization. For centuries,outbreaks were limited to specific geographic regions. The catalystfor the spread of the Spanish flu in 1918 was the demobilization ofmilitary troops who brought the virus home. Today, there aremillions more people traveling across international borders viacar, ship and plane than there were following WWI.

For the first time in history, more people are living in urbanareas than rural settings. There are also twice as many people onthe planet as there were in 1918. Countries with open borders orloose border security have the potential for a significantly higherrisk unless strict protocols to identify and quarantine victims areimplemented.

But with all the bad news, is there hope on the horizon? On theEbola front there may be a slight glimmer of hope. Toronto-basedDefyrus is commercializing the experimental ZMapp treatment forpeople infected with the Ebola virus in West Africa and hopes toscale up manufacturing to produce tens of thousands of doses in2015.

In the meantime, it is imperative for all people to take propersanitization precautions. Ebola, like many viruses, can becontained with simple hand washing and other hygiene. Hopefully,what we are seeing in Dallas is one isolated case that will rapidlybe contained. With that said, we can't delude ourselves intothinking that we are safe, as a deadly pandemic, Ebola orotherwise, is lurking just around the corner.