NU Online News Service, June 11, 3:31 p.m.EDT

The World Health Organization declared today that swine flu H1N1virus is now a full-fledged pandemic leading an insurance brokerageto warn businesses they must be ready to cope with its effects.

WHO, after a meeting by its Director General Dr. Margaret Chanwith influenza experts in Geneva, said the virus outbreak has nowbeen categorized as a level 6, the top number on its pandemic alertscale, which signals the need for response and mitigationefforts.

U.S. officials said the WHO action was not unexpected and thegovernment has been taking action, but the pandemic could worsen inthe fall.

Marsh brokerage urged a variety of preparedness steps forcompanies including checking language on insurance policies andmonitoring "the possibility of government intervention, rangingfrom mandated shutdowns of factories and offices to increasedscrutiny of goods and people at border crossings, randomquarantines, and social isolation."

U.S. Department of Health and Human Services Secretary KathleenSebelius and U.S. Department of Homeland Security Secretary JanetNapolitano, in a joint statement, said the WHO decision "wasexpected and doesn't change what we have been doing here in theUnited States to prepare for and respond to this public healthchallenge."

"Once we saw how fast this virus was spreading, we activated ourpandemic plans and started doing all the things we needed to do tokeep the public as safe and secure as possible," said SecretarySebelius.

"What this declaration does do is remind the world that fluviruses like H1N1 need to be taken seriously. Although we have notseen large numbers of severe cases in this country so far, thingscould possibly be very different in the fall, especially if thingschange in the Southern Hemisphere, and we need to start preparingnow in order to be ready for a possible H1N1 immunization campaignstarting in late September," she added.

Gary S. Lynch of the Marsh Pandemic Response Center and globalleader of the Supply Chain Risk Management Practice said, "With thedeclaration of the pandemic, public and private organizationsshould seek to finalize, validate, and test their businesscontinuity, supply chain resiliency, and crisis communicationsplans, so they will be able to cope more effectively with anypotential jurisdictional and economic consequences.

He said, "Industry's ability to respond to the challenges posedby a pandemic may be complicated by the global economic recession,which has led to significant reductions in workforce, streamliningof supply chains, and cutbacks in operations."

According to Marsh, businesses besides being alert to possiblegovernment intervention should be concerned about their ability tosource goods and maintain operations and service levels around theworld.

Mr. Lynch said in a statement that businesses should updatetheir continuity plans in light of the pandemic, ensuring thattheir trading partners do the same.

He advised that planning should include:

o Pre-defined business priorities and decision modeling thataccounts for interdependencies.

o A process for orderly shutdown or reduction in service basedon a decline in demand, unavailability of labor force, absence ofraw materials, or failure of critical infrastructure services, suchas public health and safety, energy, sanitation, communications,and transportation.

o Recovery, restoration, and resumption plans that address allkey processes and resources and define desired recovery times.

At a minimum, these plans should include alternative methods forsourcing materials and products, alternative workforce, andwork-at-home policy.

Mr. Lynch also said that the pandemic should cause organizationsto review and update a crisis and continuity management pandemicplan, including policies for business travel, locating staff,social-distancing, isolation procedures, and an alternativeworkforce.

Additionally he said businesses should have a physical andbehavioral health policy for managing infected personnel andpremises as well as hygiene and medical screening policies,anti-viral medications, health care support (e.g. anti-bacterialsanitizer, masks), and procedures for dealing with emotionalimpacts.

Companies, he said should have available the specific insurancepolicies (e.g. supply chain pandemic coverage, general liability,U.S. workers' compensation and benefits, U.K. and Europeanemployers' liability, and property) under which a claim might bemade as many variables might affect potential recovery.

He listed variables as period of restoration, waiting periods,distance limitations, sublimits, modification of language from thebasic form, definitions, deductibles, and other policy conditions,including contamination and other exclusions.

Marsh noted that during the past several weeks, manyorganizations have updated their pandemic plans with regard tosocial, health, economic, and security impacts as evidenced by suchmeasures as: requesting that employees returning from infectedcountries remain at home for three to seven days; restrictingemployee business travel; activating accountability systems foremployees and members of household; and reviewing work-at-homeprocedures.

John Merkovsky, global leader of Marsh Risk Consulting, warnedthat "based on the world's past experience with pandemics,businesses need to prepare for the possibility of a recurrence ofH1N1 later in the year and for future pandemic outbreaks."

The brokerage said it is offering a variety of services to copewith the pandemic including a free Webcast, "H1N1 Flu and PandemicPreparedness." accessible by registering at http://global.marsh.com/news/articles/mediafiles/register.php.