The threat of Ebola has now reached hysterical levels in the U.S. media, and it’s likely that financial executives will be called on to react to the outbreak, whether through contingency planning or actually managing the financial fallout as the disease and public frenzy continue to dominate the headlines.
Ebola has been on the focus of news reports since the West African outbreak sickened 8,399 and killed 4,033 people since March, making it the worst outbreak of the disease in history, according to the World Health Organization. Ebola has begun to spread in the Western world, including two cases of the disease that were contracted within the United States after Thomas Eric Duncan, who flew from Liberia to Texas with the virus, died in a Dallas hospital.
Several financial executives are already dealing with the outbreak in very tangible ways and large financial filers have begun to mention Ebola concerns in company disclosures.
For example, airline Virgin America cited the possibility that the “Ebola virus could significantly reduce demand for passenger traffic and result in travel restrictions” as a material, adverse risk to their business in a recent bond filing. Separately, independent oil and gas exploration and production company Kosmos Energy listed Ebola as a risk factor in a recent equity filing since “development and production plans for our West African operations could be delayed.”
Vendors catering to CFOs and other finance executives are reacting as well, including specialty insurer NAS Insurance Services, which announced a new insurance product this week.
The new insurance product, offered in conjunction with Prospect Insurance Brokers Ltd. and Ark Specialty Programs of Lloyd’s of London, will cover businesses facing the possibility of government-mandated closure due to the presence of the Ebola virus.
“We recognize that businesses face a significant threat if a staff member, visitor, client or patient tests positive for Ebola,”said Richard Robin, CEO of NAS Insurance, in a statement. “The premises may be closed by the Center for Disease Control or other relevant State or Federal Authority. The direct and indirect costs of this are not covered by any current insurance and the business could suffer a severe uninsured loss and even face bankruptcy if they are not allowed to reopen.”
Wall Street has entered the fray -- albeit tangentially -- as it conducts its "Pandemic Exercise Series” over the next several months to prepare for a pandemic influenza outbreak. The exercise, conducted with local and state authorities, mitigates vulnerabilities during a pandemic and identify gaps or weaknesses in pandemic planning in an organization.