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.
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