Critical Issue Report

Webinar addresses pandemic fallout

Panelists counter misinformation and media hype

By Phil Zinkewicz

Bubonic plague, also known as The Black Death, was initially recorded in the first century, and since then it is estimated to have claimed more than 200 million lives. It wasn’t recognized as a true pandemic until 1328. It’s difficult to believe, but bubonic plague still exists in places around the world, usually where there are poor health conditions. Other diseases that mankind still has to contend with include malaria, cholera, West Nile virus and bird flu. Today, the swine flu has captured the headlines and, at the time of this writing, it is estimated that there are already 3,000 dead and 250,000 sickened by the disease.

In September 2009, the Risk and Insurance Management Society (RIMS) hosted a Webinar, “Pandemic Plan of Action,” to offer perspective on the risks posed by pandemic influenza activity in the wake of media hype and misinformation regarding the H1N1 virus. Moderated by Bill Coffin, publisher and editorial director of Risk Management magazine, panelists were: Michael Keating, director of business continuity management for Navigant Consulting; Michael Liebowitz, director of risk management and insurance at New York University; and Joseph McMenamin, partner at McGuire Woods, LLP. The event was sponsored by the RIMS Nevada Chapter.

McMenamin discussed corporate exposures that exist during a pandemic. “You have to consider all foreseeable disruptions to the corporation,” he said. “For example, how would mass absenteeism affect the business? Would there be directors and officers exposures because of ineffective crisis response? What steps should be taken to protect the interests of the shareholders? Directors need to make certain that they make informed business judgments.”

Noting that any plaintiff who would be making a D&O claim during a pandemic would be “sledding uphill,” McMenamin warned that corporations still should have a plan of action in place should a pandemic occur. He asks: “What are the labor and employment issues? Where does OSHA fit into the picture? Are there Family and Medical Leave issues or Americans with Disabilities Act issues?”

McMenamin said there would likely be contract issues and government disruptions. “What will happen if there is isolation, quarantine or government commandeering of private property? There are bound to be enormous liability exposures,” he said.

Speaking from the standpoint of a risk manager, Liebowitz asked similar questions. “What is the right role for risk managers of corporations in terms of H1N1 preparedness? What are the unique challenges to a risk manager? Are there any insurance tools that can mitigate the risk of H1N1?”

Said Liebowitz: “Risk managers of corporations should examine what plans are already in existence at the firm for pandemic preparedness. If it is a manufacturing firm, have risk managers talked to their suppliers to find out how they would be affected by a pandemic? And then the risk manager should talk to employees advising them about personal hygiene, washing hands, staying at home if they’re sick, etc.”

Once a corporation has a pandemic plan in place, it’s time to exercise and test the plan, according to Liebowitz. “Check foreign health regulations where you do business,” he said. “Check your travel insurance and determine how it applies to pandemics. Look at property damage in your insurance policies to see how they apply in cases of civil unrest. Go on the Centers for Disease Control Web site to get answers to your questions about pandemics.”

Keating also discussed the importance of pandemic planning. “You have to get to know and have a dialogue with local health officials,” he said. “Engage key customers and discuss the issues with them. Work to develop the ‘big picture’ in terms of employee time off. Decide what role, if any, your corporation should play in vaccine or antiviral distribution to your employees and their dependents. Getting ready for a pandemic means understanding the international issues—cultural differences, drug distribution, border issues, medical evacuation, treatment of expats and nationals.”

Finally, the panel asserted that corporations should prepare for pandemics by keeping abreast of developments by using the Internet to learn from user groups, from white papers written by insurance brokers and HR consultants and from surveys that benchmark the latest developments.

The author
Phil Zinkewicz is an insurance journalist with more than 40 years’ experience covering the international insurance and reinsurance arenas. He was the insurance editor of the Journal of Commerce for a number of years, handling all their domestic and international supplements. In addition, he regularly writes for a number of London publications.