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Risk in Context

How Would Your Company’s Insurance Respond to Zika Virus Cases?

Posted by Thomas F. Ryan March 18, 2016

As the Zika virus continues to spread, many organizations are questioning employee travel. In a survey conducted in early February, a US State Department agency found that 38% of US multinationals, universities, and nonprofits were allowing female employees to defer travel or leave countries where Zika has been reported. (Among its effects, the mosquito-borne virus has been linked to birth defects in the children of women who become infected while pregnant or who become pregnant while infected.)

With global mobility so important to doing business today, you need to understand the range of implications if one of your employees were to contract Zika while traveling or on assignment. Your workers’ compensation insurance is probably one of the first places you’ll turn to in such instances.

If an employee contracts Zika during the course of employment, workers’ compensation would likely provide coverage for costs related to the treatment of the illness, lost wages, and, in a worst-case scenario, death benefits.

Would Wokers’ Comp. Cover Employees Who Contract Zika Outside the US?

Zika has thus far been prevalent in South and Central America; cases in which an employee contracts Zika while on assignment outside of the US would likely be covered. Many US states extend workers’ compensation benefits to those injured outside of the state, provided that the contract of hire was made in the state or the principal location of employment is in the state.

Might Any Other Insurance Apply?

Employers’ liability coverage may also apply, although some employers may prefer to arrange for a foreign voluntary workers’ compensation (FVWC) benefits endorsement or a separate standalone policy. Although terms and conditions can vary, a FVWC policy typically provides voluntary coverage for the workers’ compensation benefits of a given jurisdiction to employees not covered by state workers’ compensation law.

FVWC policies also generally provide coverage for the cost of bringing a sick employee back to the United States. Use of a medical helicopter can cost more than $60,000; and if an employee is brought back to the US via chartered plane with the proper isolation systems and medical supplies, the costs will also be high.

Additional Zika-Related Issues

If you have pregnant employees who are traveling or if you’re sending employees to countries that have already seen numerous cases of Zika:

  • Be particularly mindful of the potential for workers’ compensation claims involving pregnant employees traveling overseas or pregnant spouses of employees traveling overseas.
  • Help ensure that all employees traveling to countries with active Zika transmissions are aware of the potential risks to themselves and their spouses, along with the steps they should take to prevent infection.

Understanding your workers’ compensation policy and other insurance coverages is but one piece of managing Zika risk. Take the time to review your risk management, business continuity, and other response and crisis management plans to help ensure they address the risks presented by these current virus outbreaks and similar occurrences.

Thomas F. Ryan

Tom Ryan is a managing director and Market Research Leader in Marsh’s Workers’ Compensation Center of Excellence. He is responsible for developing market research, insight, and other content on emerging issues, trends, regulatory, and other changes that affect the workers’ compensation market.