Insurers start to exclude Ebola from new policies as virus spreads to Western countries

NEW YORK (Reuters) - As fear of Ebola infections spreads to developed economies, U.S. and British insurance companies have begun writing Ebola exclusions into standard policies to cover hospitals, event organisers and other businesses vulnerable to local disruptions.

As a result, new policies and renewals will become costlier for companies opting to insure business travel to West Africa or to cover the risk of losses from quarantine shutdowns at home, industry officials told Reuters.

"What underwriters are doing at the moment is they're generally providing quotes either excluding or including Ebola - and it's much more expensive if Ebola is included," said Gary Flynn, an event cancellation broker at Jardine Lloyd Thompson Group Plc in London.

While Ebola has killed more than 4,500 people in West Africa, and other diseases such as influenza are arguably more likely to cause measurable harm in the West, the arrival of a few isolated Ebola cases in Western countries has focused their insurers' minds on the virus's potential to cause damage.

No events have yet been cancelled in Britain or the United States as a result of Ebola; only three cases have been diagnosed in the United States to date, and none in Britain. But concern has been growing, and Ebola has moved to the forefront of the U.S. election campaign.

The U.S. government said on Tuesday that travellers arriving from any of the three centres of the outbreak, Liberia, Sierra Leone or Guinea, must fly into one of five airports that have enhanced screening in place. Britain is also screening arriving air and rail travellers.

ACE Ltd said on Wednesday that its global casualty unit, which offers coverage for U.S.-based companies whose employees travel or that have operations abroad, was using a policy endorsement to exclude Ebola on a "case-by-case basis" during the underwriting process on new policies and renewals.

It said it was taking into account the risk posed by Ebola to clients who travel to and have operations in African countries with "potentially higher risk exposure".

Others are introducing new products tailored for Ebola. "Probably the biggest issue coming up is business interruption," said Tony DeFelice, managing director of Aon Risk Solutions' national casualty practice in the US.

A business interruption could be anything from the loss of key employees to sickness to the quarantine of an airliner or cruise ship used by a suspected patient suffering from Ebola or any other serious infectious disease.

Miller Insurance Services LLP and William Gallagher Associates last week launched the first product to insure hospitals against losses from any shutdown made necessary by Ebola quarantine, teaming up with Lloyd's of London underwriter Ark Syndicate.