Outbreak!: Why Insurance Claims Professionals Should Pay Attention To Monkeypox – Insurance Laws and Products

Monkeypox was declared a national public health emergency by the
U.S. Department of Health and Human Services on August 4, 2022,
only the fifth time this has happened since 2009. As of September
20, 2022, the Centers for Disease Control and Prevention reported
24,203 confirmed cases nationwide, with California (4,753) and New
York (3,799) in the lead. The immediate implications and potential
long-term consequences of Monkeypox on the commercial insurance
industry remain unknown for several reasons.

Some studies indicate that Monkeypox requires prolonged, close,
face-to-face contact or direct skin-to-skin contact with rash
lesions to spread. This reduced threat of transmission minimizes
the likelihood of large-scale government shutdowns or stay-at-home
orders, and the attendant claimed property and business income
losses, of the kinds seen in response to the COVID-19 pandemic.

While property coverages should not be implicated by the
Monkeypox outbreak, liability insurance policies may not be immune.
For instance, schools, day care centers, nursing homes and other
residential care facilities may face claims related to exposure and
contraction of Monkeypox tied to alleged inadequate safety
protocols. As always, insurance industry professionals should be
guided by the particular policy language.

Nonetheless, such claims should be subject to communicable
disease exclusions found in many general liability, errors &
omissions, or homeowners policies (or even auto policies). Notably,
in Lambi v. Am. Family Mut. Ins. Co., 498 F. App’x 655
(8th Cir. 2013) (applying Missouri law), the Court considered the
conduct of two consenting adults where one allegedly transmitted an
STD to his partner. The insurer denied coverage under the
homeowner’s policy because the policy definition of
“bodily injury” excluded “any of the following which
are communicable: disease, bacteria, parasite, virus, or other
organism which are transmitted by any insured to any other person
….” Id. at 656. The Eighth Circuit held that the
policy excluded the actual or alleged transmission of a
communicable disease because infecting another with the HIV virus
clearly fell within the plain and ordinary meaning of the
transmission of a communicable disease. Id.; see
also Plaza v. Gen. Assur. Co., 244 A.D.2d 238, 239
(N.Y. App. Div. 1997) (applying communicable disease exclusion to
injuries sustained from HIV transmission); Koegler v. Liberty
Mut. Ins. Co., 623 F. Supp. 2d 481, 484-85 (S.D.N.Y. 2009)
(communicable disease exclusion would have precluded coverage for
policyholder who transmitted HPV and herpes had there been a timely
disclaimer of coverage, as the exclusion was unambiguous).

Places where workers may be in contact with affected individuals
because of their job duties, such as hospitals, physical
rehabilitation clinics, health spas, chiropractors, massage
therapists, and physical training facilities, may see an increase
in third-party claims. In addition, day cares and schools, where
children may be in close physical contact for prolonged periods of
time, may see some claims to the extent that a student allegedly
contracted Monkeypox at the premises.

In the meantime, we are watching the numbers for Monkeypox cases
and analyzing policy language that may be implicated.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.