AXIS Capital Holdings Limited's AXIS Healthcare division has launched a new medical catastrophe (“contagion”) business interruption product for hospitals in the U.S. and Canada to protect against a loss of revenue caused by the outbreak of a contagious disease.
The AXIS Healthcare medical catastrophe business interruption and extra expense product includes coverage for any disease that is transmitted by direct or indirect contact. These diseases include bubonic plague, MRSA, Legionnaires' Disease, Middle East Respiratory Syndrome (“MERS”), Hantavirus, SARS, West Nile Virus, HIV, Ebola Virus, Marburg Virus, Lassa Fever, Influenza, and Bird Flu, as well as other lesser-known viruses or plagues, the company said. The new product also would 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, according to AXIS.
Commenting on the announcement, Peter Wilson, the president of AXIS Insurance's U.S. operations, 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. 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, the head of AXIS Healthcare, added, “Our new medical catastrophe business interruption and extra expense coverage serves a critical need in the healthcare marketplace that has thus far gone unaddressed by the insurance industry. Pandemics represent an especially serious risk for healthcare providers. 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. Indeed, after the first Ebola patient was admitted to Texas Presbyterian Hospital in October of 2014, the hospital lost $20.3 million in revenue over a two-month period, with a decline in inpatient days of 22 percent and a decline in ER visits of 49 percent during the first month.”
The company said that the policy responds when the contagion directly results in any one of four triggers:
- A governmental quarantine of a hospital;
- If 25 percent or more of the medical personnel do not come to work;
- A 25 percent or more reduction in inpatient stays; or
- A 25 percent or more reduction in emergency room visits.
The maximum length of coverage is limited to 12 months from the date the coverage is triggered.
Learn more: www.axiscapital.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].