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With the reliance on technology in today’s data driven world the number of cyber-attacks are on the rise. The media focuses on the larger companies suffering breaches; however, small to mid-size companies are not exempt from hackers.
Are you prepared to take on the cost of credit monitoring for your customers, as well as handling the cost of hiring a public relations firm to restore your reputation should your network suffer a breach?
An entity which gathers and stores any type of confidential personal information needs to be aware that this sensitive information may be stolen from an internal employee as well as outside hackers. Examples of such entities include but are not limited to: Financial Institutions, Insurance Agencies, Insurance Companies, Accounting Firms, Mortgage Companies, Tax Consultants, Doctor Offices, and Dental Offices.
The black market price of personal information, including health insurance coverage, is on the rise.
- Network Security
- Data Breach Notification
- Crisis Management
- Credit Monitoring
- Communications and media coverage
- Regulatory Notification
- Legal Professional Services
- Business Interruption
- Privacy Notification Expense
A diligent effort should be made to explore the cost of Cyber Liability Coverage. In today’s changing times Cyber coverage is no longer a luxury but a necessity.
When in doubt check it out! Call – 516-419-5050 – or email us – email@example.com – with your contact information today and we will be happy to consult you regarding your risk of suffering a Cyber loss and how to protect yourself from financial loss.
By: LuAnn C. Schook, ACSR, AAI, AIS
Commercial Lines Manager at Petschauer Insurance
516-419-4263 | firstname.lastname@example.org
In speaking with the underwriting community about private company D&O renewal policies, they are unanimous in their assertion that there has been a significant deterioration in claim experience.
Historically, losses were the result of Employment Practices Liability claims, especially following the economic meltdown of 2008. Now that the worst is behind us, private company D&O claims have manifested the more traditional types of loss scenarios. As a result, employment practice claims are no longer a large factor in driving the market’s swings in pricing. However, make no mistake – pricing continues to be an issue.
One reason for this is that private company D&O policies are written to be much broader in terms of the coverage they afford than their public company counterparts. Under public company forms, the “entity” coverage is restricted to securities claims only. Under the private company forms, the “entity” coverage is actually written on an all risks basis. Therefore, claims scenarios are wide open and can even allege such wrongdoing as “false advertising, misleading promises” and the like. Such allegations aren’t covered under the public company form, so a public company policy would never entertain this type of claim to begin with.
Under a policy for private companies, employees are covered and by ’employees’ we mean not just the directors and officers who might also be employees, but employees in any capacity who work for the company. Many such lawsuits don’t even bother to mention or name the directors or officers of the firm. However, such claims are covered under private company D&O Liability policy forms.
In addition, under private company policies, coverage is usually written on a “duty to defend” basis where an insurer is obligated to defend its insured against third-party claims. All an insured needs to do is establish that there is a ‘potential’ for coverage under the policy in order to give rise to this insurer’s obligation. The reason for this is because the insurance policy is a contractual obligation which is undertaken by the insurer. Thus the insurer has taken on responsibility to pay for all legal defense costs and assume a defense for its insured. In addition, the insurer may owe a duty to defend even in cases where ultimately no damages are awarded. Not only must the insurer assume control of the claim defense process, but they must also select counsel as well as pay all the legal bills. This is diametrically opposed to public company D&O Liability policies which are written on a non-duty to defend basis. Non-duty to defend (or duty to pay) policies require only that the insurer reimburse the insured for funds expended by the insured in defending a claim. These are termed “duty to pay” policies.
The take away here is that private companies should be prepared to pay more on its next renewal and so considering a higher deductible or lower limits might be an answer to keeping the cost within budget.
While it is true that insurance companies are in business to make money, and most insurers are looking for increases of between 5% and 15% on an annual basis, the D&O (directors and officers) market remains an anomaly. Now that the worst of the financial crisis appears to be over and bankruptcy filings are declining, most carriers are willing to settle for very low rate increases on their D&O book of business provided the risk is a good one. Why, when other lines of business are looking for more aggressive increases, is this market behaving differently?
The answer is that previously many carriers actively fought to obtain and retain this business. Now, having suffered significant losses, they are actively underwriting their books and they are being much more selective as to which policies they will offer to renew and what terms and conditions they are willing to offer. Thus, they are underwriting more by experience of a risk than by market segment, size of risk, or size of premium. This is especially the case with smaller privately held companies.
As for publicly traded companies, the underwriting philosophy is not much different. The huge swings in pricing are a thing of yesterday. The renewal premiums on publicly held policies will be rather flat even though it is widely believed that pricing and retention on such policies are not really where they should be. As a result, carriers will be reviewing and scrutinizing all underwriting data and carefully choosing the accounts they want to provide with the most aggressive pricing. In view of the losses which carriers were forced to absorb during the financial crisis, they are trying desperately to get back to making their books profitable once again. One way of accomplishing this is by increasing retentions and making sure that the premium charged are reflective of both the exposures presented as well as the loss history of the account. Basically, they will pick and choose what they care to write rather than automatically offering a renewal.
So, it is suggested that you determine the largest retention you can live within an effort to keep your premiums reasonable and then use this to negotiate any proposed rate increase offered by your carrier. Talk this over with your agent or broker, prior to your renewal, to ensure that you obtain the most cost effective renewal proposal available in the market.
Karen Skoler, CPCU
Did you know that on Thanksgiving Day the amount of kitchen fires are two times more likely to occur than on any other day of the year? That seems reasonable, as most of us are celebrating a holiday that resonates because of the amount of food preparation that takes place. That is why we want you to be prepared for the worst, while enjoying the holiday.
Here are 10 tips to keep in mind as the day of feasts approaches:
- Install a fire detector in or near the kitchen.
- Never leave the kitchen when frying or grilling food.
- Use a timer when cooking.
- If using a deep-fryer, keep the fryer outside, away from any walls.
- Avoid loose clothes or long sleeves while cooking.
- Make sure all candles around the house are securely placed.
- Keep kids away from cooking areas.
- Keep all flammable things – oven mitts, wooden utensils, paper or plastic bags, towels – away from the stove top and oven.
- Keep the floors clear of any objects you may trip over.
- Make your fire extinguisher functions properly, and place in or near the kitchen.
We hope that you take these tips and put them to use while you prepare for Thanksgiving. Then, the only thing you will have to worry about is overeating. Have a wonderful holiday!