Insurers offer Ebola policies to cover a hospital's potential losses

New product covers loss of business brought by quarantines

Two private insurance companies are offering first-of-its-kind policies that protect hospitals and businesses from any loss of profits brought by a potential Ebola quarantine, Reuters' Richa Naidu reports.

What happens to the rest of the hospital when an Ebola patient is admitted?

British broker Miller Insurance Services and U.S. broker William Gallagher Associates (WGA) have partnered to offer the policies. Lloyd's of London began underwriting the "Pandemic Disease Business Interruption Insurance" policies on Friday.

According to a release from WGA, the policies address loss of income related to shutdowns of health care facilities and to diminished revenues linked with quarantine. "People may choose to put off their health care, or to get it at an alternative facility, if they feel there's a reason to suspect Ebola in a given clinic or hospital," says WGA's Phil Edmundson.

WGA's Peter Reilly explains that "Insurance for lost revenue arising out of a non-physical damage event like a voluntary or involuntary quarantine of facilities and medical professionals is not available on most Business Interruption coverage forms." He says the two brokers "have designed coverage that can be triggered by events like we have already seen in the Dallas Ebola case."

Mark Sleet, a broker at Miller, says there has been "considerable interest" in the policy in the United States.

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According to WBUR, the policies will not cover the cost of shutting down a ward, providing staff training, or overtime work.

In addition, CNBC reports that Lloyd's is also underwriting a policy that would cover business interruptions at any company that is order to shut down due to Ebola (Naidu, Reuters, 10/17; Bebinger, "CommonHealth," WBUR, 10/16; Thompson/Mangan, CNBC, 10/17; WGA release, 10/15).

What you need to know about Ebola

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