An epidemic can start as an outbreak and has the potential to turn into a pandemic. Despite the worldwide fear that Ebola has triggered, it is not yet referred to as a pandemic because the vast majority of cases have occurred in Western Africa. That's not to say that concern and fear over this epidemic isn't warranted. After all, there is no known cure and it has a high fatality rate, particularly in third-world countries.

Ebola has triggered an flood of global concern in part because of business operation missteps that have exposed liabilities and placed employees, customers and the public at risk. The virus is also an impetus for understanding communicable diseases and their impact on risk management and related insurance coverages.

Thus far, only a handful of people in the U.S. have been treated for the disease with another infection recently reported in New York City. But Ebola is already exposing certain industries to elevated risk, most notably healthcare.

Below are business-related actions involving communicable diseases that could impact claims for certain property and casualty insurance coverages:

Action: Hospital emergency room workers treat a patient with a serious communicable disease

Vulnerability: Workers are improperly trained to follow infectious disease protocols, or protocols do not exist

Potential P&C coverage impacted: Workers' compensation and employers' liability

Potential implication to business: Employees who contract a disease because of cross-contamination may file a negligence suit under the healthcare provider's employers' liability insurance. Employees are also eligible for workers' compensation if they miss work due to actual illness, or a voluntary or forced quarantine.

Action: Adverse media reports regarding a hospital's mishandling of a patient suffering from a communicable disease

Potential vulnerability: Hospital is not prepared to address negative publicity. Unflattering media reports may lead to significant drop in patient admissions with a resulting impact on business income.

Potential coverage impacted: Business interruption and crisis management

Potential implication to business: Loss of business revenue as well as additional high costs incurred to employ a PR firm to handle crisis management. Business interruption (BI) claims are typically triggered in the event of “direct damage” to the insured property as a result of a covered risk. Some BI policies that provide coverage for events related to communicable diseases. But these events typically require an action of civil authority triggered by the presence of the disease, not merely the suspected presence of a disease.

Action: Hospital releases the name of an employee who contracts a communicable disease while caring for an infected patient.

Potential vulnerability: Failure to protect the employee's confidential health information (HIPAA violation)

Potential coverage impacted: The Personal injury protection as part of the general liability policy. Personal injury includes coverage for injuries or damage to others caused by specified actions of the insured such as false arrest, malicious prosecution, willful detention or imprisonment, libel, slander, defamation of character, wrongful eviction, invasion of privacy, or wrongful entry.

Potential implication to business: Consumers and individual customers of businesses can sue a business under state tort laws for violations of their privacy rights. However, there is an exception covering the release of confidential medical information. HIPAA rules permit disclosure of health information to public health authorities in order to prevent or control disease. According to Health and Human Services, HIPAA's Privacy Rule permits covered entities to disclose protected health information without authorization to public health authorities who are legally authorized to receive such reports for the purpose of preventing or controlling disease, injury, or disability. This includes the reporting of a disease or injury; vital events, such as births or deaths; and conducting public health surveillance, investigations, or interventions.

Action: U.S. healthcare employee travels to West Africa

Vulnerability: Employee becomes infected with Ebola and wants to return to the U.S. for treatment

Potential coverage impacted: International repatriation expense

Potential implication to business: Allianz Worldwide, a leading international insurance company, is taking a harder line on medical evacuations from West African nations. Allianz Worldwide's air ambulance partners are not currently evacuating patients with a suspected or confirmed Ebola infection from affected regions due to the highly complex nature of evacuations. Governments may also resist allowing infected individuals to leave quarantine and return to their home countries.

Treating or transporting patients stricken by certain infectious diseases can potentially impact all casualty lines of insurance. It's essential for businesses to review their insurance coverages in order to mitigate risks. They should also have in place alternative risk management strategies to maintain their normal operations.

We've also learned in recent weeks that hospitals aren't the only organizations vulnerable to communicable diseases. The potential for coverage gaps can extend to hotels, airports, cruise lines, shopping centers, restaurants, theaters, gyms, apartment building property owners, etc. It's incumbent upon businesses to assess the potential implications of communicable diseases on their operations, including supply chain interruptions and product availability. Contingent business interruption policies can help mitigate these losses, but be sure to read the fine print. It's also important to note that insurance coverages for lost revenue arising from an event like the quarantining of facilities and employees are not available on most business interruption policies.

Communicable diseases, whether epidemic or pandemic, can adversely impact normal operations, revenue streams and pose risks to employees and customers. Business losses can happen in the blink of an eye. Texas Health Presbyterian Hospital saw an $8.1 million drop in revenue over the past several weeks because of public concerns over its handling of Ebola cases.

The time to address insurance coverages and risk management strategies is long before a disease spreads to your front door.