The outbreak of the H1N1 flu that closed down many businesses and public institutions in Mexico has revealed gaps in company plans to deal with a pandemic flu, according to an insurance brokerage executive.
No one was prepared for a viral outbreak this late in the year, and those who reviewed their plans to deal with a global spread have discovered their programs lacking in adequate planning, said Gary Lynch, Marsh global manager for supply chain risk management and pandemic response center director.
He said those who have plans discovered gaps in their preparations. Their plans made limited assumptions about the affect of the virus on their organizations or in some cases dealt with a single event and not successive waves of a virus, he noted.
The plans also did not consider how the age distribution of the workforce could be impacted by a virus or understand what parts of their operations needed to be prioritized. They have also learned that insurance they thought would take care of business interruption issues would not be available for them.
He said companies have not thought through what aspects of their operations are essential to staying in business while the workforce is reduced due to illness. The businesses have also not weighed how they could be affected if their supply chain was interrupted by the illness.
"This situation presents a tremendous learning opportunity for all of us," said Mr. Lynch. "The best organizations exercise continuous learning."
"This was a test. H1N1 has tested organizations more than they expected and now they should be seeking to capture the concerns in dialogue--the lessons learned, and the lessons not learned, especially in speaking with all their stake holders in the supply chain," said Mr. Lynch.
He said many organizations have contacted Marsh to review these gaps and help them prepare for the next pandemic.
Robert Wilkerson, of Marsh's crisis management practice observed that this outbreak is a test and that many organizations have run into challenges implementing their plans or discovered they have no plans in place.
Not having a plan, he explained, has led to a lot of valuable time being wasted by companies to get organized and making basic decisions about what to do.
He said companies that wait for the government to make decisions for them are making a big mistake. It is up to company officials to ask themselves what they need to do to protect their business, employees and the bottom line.
Paul McVey, leader of Marsh's national property claim practice said that conventional property coverage will not cover companies if there is a pandemic, and that while there might be some exceptions, he indicated that insurers and policyholders would probably find themselves litigating the issue.
He said some policy extensions may be available covering supply chain disruptions in cases of infection or contagious diseases or the shut down of the operation by government officials.
Mr. McVey advised that if a policyholder believes they have coverage they should document everything, contact the insurer, and get the names of the infected people.
Last week's discussion of the flu outbreak was part on Marsh's continuing New Reality of Risk Webcast series. A replay is available at www.marsh.com.
While the flu has faded from the headlines it is still of major concern at the Centers for Disease Control and the World Health Organization.
Dr. Toby Merlin, deputy director influenza information unit at the CDC emphasized during the Webcast that if employees are sick they should stay home.
"There is no gain to have sick, contagious people come into work," he said, adding that companies need to be more flexible with their leave policy in response.
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