Outbreak Extra Expense Old Risk-New Coverage: • Economic Impact Greater • Increased Human Interaction/Population • Tolerance for exposure • No existing solution • Compliance with SOX or similar reg to mitigate loss
Outbreak Extra Expense:The Hot Zone • Contagious Events on the Rise • Bubonic Plague in Los Angeles (April 2006) • Mumps Outbreak (Several Mid-West State April 2006) • SARS (Toronto, Summer 2003) • Legionnaires (Toronto, Fall 2005) • TB • Meningitis(Schools) • e-coli • Salmonella
Outbreak Extra Expense -a vaccine for risk
Outbreak Extra Expense • If you like to avoid E&O claims, Outbreak Extra Expense should NEVER be referred to as any of the following: • Pandemic Coverage • Avian Flu Coverage • Quarantine Coverage
Outbreak Extra Expense: What is it? • Outbreak Extra Expense provides a per day limit of insurance triggered by a covered suspension of a business premises caused by a wide variety of contagions, including viruses, bacteria, and mold and/or a workplace violence event. This policy is not a coverage for general quarantines or shutdowns. • OEE is not business interruption—there is no coverage grant in this form that claims to indemnify lost revenues or profits.
Closed by Public Health Official? Outbreak Contingent Extra Expense-Coverage Flow Chart Yes No Operational Premises? Yes No Building Closed? Covered Contagion? Yes Yes No COVERAGE TRIGGERED Caused by Contagion/Illness on Your Op Prem? Yes
Outbreak Extra Expense: How it Works Three Critical Elements: • Covered Suspension • “public health official” • Covered Location • “operational premises” • Covered Cause • Contagion(s)
Order of Operations • Closure of an “operational premises” by a “public health official” is absolutely critical in triggering the policy. • No other “type” of closure is covered except as provided for in the Workplace Violence coverage component.
Public Health Official • “Public Health Official” -means a person working under the direction and with the authority of a governmental health organization and who delivers a notice of “Suspension” to your “Operational Premises.” • “Public Health Official”does not include any other governmental authority, political office or official, or public safety or law enforcement personnel, except when a covered homicide, suicide, or workplace violence incident occurs.
Operational Premises • “Operational Premises” means only that part of the premises you exclusively own, rent or occupy where you regularly conduct your business and does not include: • Any common areas; • Any common facilities, including but not limited to heating, ventilation and air conditioning systems, insofar as those facilities do not originate from your “Operational Premises”; and • restrooms, hallways, elevators, service areas, lobbies, sidewalks, parking areas, or any routes of ingress or egress.
Operational Premises • Why the narrow definition of Operational Premises? -Aggregation Risk -Rate Development
Contagion~Fire • The premises specific nature of the coverage is similar to a “fire” coverage. When you think of a virus or contagion---think of a fire… • To wit: If a fire is not on the insureds premises—it is most often unlikely that coverage under a fire policy reponds. • Simply put—Outbreak Extra Expense responds (per triggers) when the contagion (fire) is ON the INSURED’s premises—as defined in the policy. (Not as defined in ANY OTHER policy)
Covered Outbreaks • For a “Period of Suspension”, to a maximum of thirty (30) days, in the event of a “Suspension” of your “Operational Premises” by a “Public Health Official” due to the following: • Contagion, which means disease transmission by direct or indirect contact; • Communicable disease, which means an illness, sickness, condition, or an interruption or disorder of body functions, systems, or organs that is transmissible by infection or contagion directly through human contact or contact with human fluids, waste or similar agent; • A water-borne pathogen resulting in contamination of the water supply; however such coverage will not become effective until the fifth day of the “Period of Suspension” • Biological materials at the “Operational Premises”; or • Infestation by vermin or pests;
Covered Outbreaks-continued • B. For a “Period of Suspension”, to a maximum of five (5) days, in the event of a “Suspension” of your “Operational Premises” due to a homicide, suicide, or workplace violence incident that takes place within the “Operational Premises”; Premises can be closed by personnel other than public health official—for this peril only. (law enforcement etc.)
Covered Outbreaks-continued • With limitations-fungus, mold etc is potentially covered; 1 Event in the policy period; 5 day limitation; Review Exclusionary Language
Exclusions: Fungus Section II. CWording- • For a “Period of Suspension”, to a maximum of five (5) days, in the event of a “Suspension” of your “Operational Premises”due to an illness, sickness, condition or interruption or disorder of body functions, systems, or organs due to “Fungus”; however, we will only pay for one “Period of Suspension” caused by or arising from or in connection with “Fungus” per policy period, regardless of the number of locations listed on the Declarations page or the number of such “Suspensions” that actually occur.
Exclusions • We will not cover any loss caused or contributed to by or resulting in whole or in part from any one or more of the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss • 1. Viral Hemorrhagic Fever; • 2. Anthrax; • 3. Sarin; • 4. Smallpox; • 5. Fungus except as provided for in Section II, C.
Outbreak Extra Expense: Coverage Animation If the public health official closes the building, coverage is triggered solely for building owner. If the public health official closes any individual insured operational premises-due to covered cause, coverage responds. If building is closed due to covered cause emanating from insured premises—bothpolicies trigger. In a building—each office area is an “operational premises”. However, the building is an “operational premises” only for the building owner. In an owner-occupied building the coverage includes the entire building and the premises.
Outbreak Extra Expense: Limits • Increments of $2500. (Min. Loc. Limit $2500) • Available Limits $2500-$50,000 per day • Annual Location Aggregate of 30 days applies • Policy Aggregate can not exceed $5,000,000
Wide Variety of Eligible Classes • Food Industries—time deductible will apply for certain events ( i.e. salmonella, ecoli etc.) • Colleges and Schools • Habitational and Office Buildings • Clinics, Hospitals, Blood Banks, Nursing Homes, Assisted Living Facilities • Law Firms • Anyone
Outbreak Extra Expense: Application • Detailed Premises Information • Operational Overview Questions • Up to 5 locations on one app. (of same operational exposure) • Use spreadsheet with similar data to submit larger multi-location risks.
Pricing • Corporate Actuarial Analysis • Pricing Example • 30 days X desired limit = exposure • Exposure X 1% X Mod Factor = Location Premium • Location Premium X # of locations = Total Premium
Additional Information • Minimum premiums: $750 per location and $1,500 per policy • Coverage may be written as part of a package or monoline • Commission for OEE is 20%
Contacts • General Questions: Andrea Nash, firstname.lastname@example.org • Account Submissions: • Connie Masella, email@example.com • Evans Nash, firstname.lastname@example.org
Outbreak Extra Expense QUESTIONS?