NU Online News Service, Sept. 23, 2:35 p.m.EDT

NEW YORK--As global concern grows over an outbreak ofthe H1N1 flu, most U.S. companies remain unprepared torealistically deal with an outbreak, a Marsh insurance brokerageexecutive said.

Gary S. Lynch, managing director, global leader of Marsh RiskConsulting, Supply Chain Risk Management, gave that warning duringa luncheon of the Association of Professional Insurance Women.

Mr. Lynch said there are a number of reasons for companies notimplementing aggressive plans for dealing with the H1N1 virusoutbreak that was first discovered in Mexico in April of thisyear.

He explained that despite the influenza outbreak rising to aLevel 6 by the World Health Organization (WHO), the highest levelof contamination and concern, corporate planners are not as alarmedas they should be principally because there have not been a largenumber of deaths from the outbreak. The fact that the outbreak isnow global in dimension has also contributed to a lessening inconcern.

"What was unique is no longer unique," he noted.

However, he noted, while there have been only 3,500 deaths as ofSept. 14, influenza does have a pattern of morphing into somethingworse. The best demonstration of this is the 1918 pandemic whichkilled possibly millions globally. It took three to four yearsafter it was initially discovered before it developed into a morelethal form.

While the Center for Disease Control (CDC) has put out standardsfor dealing with the outbreak, many private companies are stillstruggling with their planning, Mr. Lynch related.

"The threat remains vague, and they do not understand the painof disruption," he told National Underwriter.

Businesses are not coordinating all their different departmentsin the discussions over potential liabilities and impact on theiroperations, he said, leading to failure to understand the riskfully.

In his address, he noted that in one survey two-thirds ofcompanies said they could not continue their operations if 50percent of their employees did not show up, something he indicatedwas not outside the realm of possibility.

Mr. Lynch also noted that many businesses have not consideredthe full impact of supply chain interruption, concentrating ontheir front-line vendors but not considering how the shutdown ofother suppliers could impact them, or what they would do if thathappened.

Some companies will be more impacted than others, he noted, suchas sports venues and the hospitality industry.

"The question to ask yourself, as you look at the relevancy ofthis issue, is how does this really affect my industry, what I doand my ability to create value in the marketplace," heobserved.

He added that companies need to prioritize what is most valuableto their organizations and how to deal with those losses. At theminimum, companies need to focus on what they need to do tomaintain their level of operation and create a safe workenvironment for their employees.

As far as a risk transfer mechanism, Mr. Lynch said there isnone available. After the outbreak began to reach pandemic levels,insurers excluded influenza-related claims from their policies. Tohis knowledge, no one is marketing any coverage, such as businessinterruption, for this risk.

Ironically, yesterday's address was to be given by Karen Avery,U.S. Business Continuity Management Practice Leader for Marsh, butshe cancelled at the last minute because she had the flu.