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Protecting hospitals from pandemic losses focus of new coverage

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Axis Healthcare, a unit of Axis Capital Holdings Ltd., has launched insurance coverage that protects hospitals in the U.S. and Canada from revenue loss due to an outbreak of a contagious disease.

The Axis Healthcare medical catastrophe business interruption and extra expense product provides coverage for bubonic plague, methicillin-resistant Staphylococcus aureus, Legionnaires’ disease, Middle East respiratory syndrome (MERS), hantavirus, severe acute respiratory syndrome (SARS), West Nile virus, HIV, Ebola virus, Marburg virus, Lassa fever, influenza, and bird flu, Axis said Thursday in a statement. It also includes coverage for other lesser-known diseases, Axis said.

The policy provides coverage if a governmental quarantine of a hospital takes place, if 25% or more of the medical personnel don’t come to work, if there is a 25% or more decrease in inpatient stays, or if there is a 25% or more reduction in emergency room visits. The maximum coverage lasts 12 months from the date the coverage is applied, according to the statement.

“Our new medical catastrophe business interruption and extra expense coverage serves a critical need in the health care marketplace that has thus far gone unaddressed by the insurance industry. Pandemics represent an especially serious risk for health care 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 $20.3M in revenue over a two-month period, with a decline in inpatient days of 22% and a decline in ER visits of 49% during the first month,” Kimber Lantry, head of Minneapolis-based Axis Healthcare, said in the statement.