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Monthly Archives

December 2015

5 Odd Corporate Insurance Policies

By Other | No Comments

cyber-dec-1There are insurance policies that any sane business owner is going to have to invest in as soon as they have the cash flow to cover them. Then there are those that are… a little out-there. You might never need any of these policies, but it’s good (or at least interesting) to know they’re available in some areas:

Lottery Winner Insurance

Businesses in the United Kingdom have the option to purchase insurance for the event that two or more employees win the National Lottery and quit their dayjobs. The odds of that happening are especially slim when you consider how many lotto winners put their prize in savings and go back to work the next day. But hey, better safe than sorry, right?

Loch Ness Monster Insurance

The Cutty Sark Company has a prize for anyone who can capture the Loch Ness Monster alive to the tune of one and a half million dollars USD. They also have an insurance policy to cover their losses should this happen. We’re not talking proof alone of the monster’s existence, but capturing it alive. Something tells us their insurers aren’t too worried about having to pay out a million and a half bucks anytime soon.

Immaculate Conception Insurance

The Catholic Church insured three of their most valuable nuns against the risk of immaculate conception in 2006 through British Insurance. Sounds weird, but when you think about it, doesn’t every line of work carry with it its own risks?

Abbot and Costello

For Abbot and Costello, their onscreen chemistry was their livelihood. They insured their partnership for about a quarter million dollars in case they ever just couldn’t get along anymore. Insurance to cover bickering employees actually doesn’t sound like a bad idea, come to think of it.

Lloyd’s of London in Hollywood

Lloyd’s of London has a long history with Hollywood, having insured comedic actor Ben Turpin’s famous crossed eyes for twenty grand should they ever uncross, and covering the Oscars with some pretty hefty liability policies, including a thirty eight million policy just to cover the jewelry on display in 2004. All those big stars in one room? That’s a lot of assets on the line for the industry’s money-men.

Some of these policies sound pretty weird, but if you think about it, it’s nice to live in a world where there’s still enough reasonable doubt that you can be insured against the capture of the Loch Ness Monster. Insurance is, after all, all about peace of mind should the worst-case-scenario occur.

D&O Insurance – Protect Your Key People

By Business Protection Bulletin | No Comments

bb-dec-2In today’s increasingly complex and litigious business environment, your corporate officers and board of directors – the brains of the company – need protection against personal financial liability arising from their corporate activities.

These people are highly vulnerable to lawsuits by investors, employees, vendors, competitors, customers, regulators and others, alleging misconduct for a wide variety of activities, such as:

  • Providing inaccurate or unlawful advice.
  • Fraud and malfeasance.
  • Misrepresentation of company assets.
  • Failure to comply with workplace laws.
  • Poor hiring decisions. (A Towers Perrin survey found that 40% of all reported D&O claims involved flawed employment practices.)

Directors & Officers Liability (D&O) Insurance will pick up the tab for legal fees, settlements, and other expenses from such litigation. This gives your officers and directors financial peace of mind in carrying out their corporate activities, and provides a valuable incentive for attracting, and keeping quality people who can help grow your business.

There’s a widespread need for this coverage. One in six company executives (17%) surveyed by Inc. Magazine believe that their business will experience a D&O-related loss within the next year.

These policies usually offer two types of coverage known as “sides.” Side A protects directors and officers from personal financial liability if the company is unable to indemnify them. (For example, during a bankruptcy or dissolution.) Side B coverage reimburses the company if it indemnifies directors and officers. (For example, when shareholders file suit against them.) A third coverage – sometimes known as Side C – comes into play when both the company and individual officers and directors face lawsuits.

To learn more about how D&O Insurance can help minimize the financial risks of litigation for your company and your top people, feel free to get in touch with us at any time.

Retail Businesses – High Risk for Cyber Attack

By Business Protection Bulletin, Cyber Security Awareness | No Comments

bb-dec-4Retail businesses are in the cross hairs of hackers, according to a recent report from Trustwave, a provider of data security and payment card compliance solutions to businesses.

Retail businesses – specifically the cardholder data they possess – were the primary target of cyber criminals in 2012, says Trustwave. About 45% of the company’s investigations were in the retail sector, followed by food and beverage (24%), and hospitality (9%).

“Cyber could very well be the largest part of the exposure picture for these retail businesses,” says John O’Connor, Vice President of Strategic Product & Platform Development for Travelers Insurance. What makes the retail industry so appealing to cyber thieves? The sheer volume of payment cards used in these businesses make them obvious targets. Also, stores are relatively easy targets because they tend to focus primarily on customer service, rather than data security.

Widespread reporting of costly and embarrassing data breaches have made retailers increasingly aware of the exposures they face when storing customers’ data and swiping their credit cards.

Although hackers are targeting retailers of all sizes, smaller firms are particularly vulnerable because they often find it more difficult than their larger counterparts to keep their systems secure and to afford the heavy costs of notifying their customers about data breaches.

One insurance agent said, “A lot of these businesses aren’t the types that can absorb these costs. A data breach is one of those things they might not think about – but it can shutter their doors if it happens.” The good news: our agency can help you protect you against these risks by offer a variety of comprehensive, competitively priced Cyber Liability policies. Just give us a call.

Are You A Target?

By Cyber Security Awareness | No Comments

cyber-dec-3It’s a reasonable question: Am I a target? Is anyone out there actively trying to steal my information? Are you in an industry that is frequently targeted by hackers, and are you visible enough within that industry to be a target?

If you’re running a successful business, then you probably do have enough cash flow that a hacker who’s in it to make a quick buck wouldn’t hesitate at the opportunity to steal something from you. However, the vast majority of cyber criminals are looking for crimes of opportunity. Forgetting your credit card at a restaurant, browsing private emails in a public place, or just having poor security on your office network are what make you a target more than any business decisions you might be making or fame you might achieve.

The people who hackers go out of their way to target are typically involved in some sort of politically volatile situation. People running for office may be targeted by opponents and critics who would love to embarrass them with a leaked email, and the same goes for any highly visible industry figure who’s having a bad PR day after perhaps making an off-color joke at a public event.

As for the rest of us, we’re all targets, not because anyone is actively pursuing us, but because when it comes to stealing sensitive data, beggars can’t be choosers. The tenth biggest desk-fan manufacturer in the country is exactly as big a target as the eleventh, twentieth and fiftieth biggest manufacturer.

What really gets a hacker’s attention is a security lapse. If you’re using your laptop at a coffee shop and you leave it open on the table while you go to the restroom, a thief isn’t going to browse your files and find out if you’re anyone important, they’re just going to steal the laptop and do whatever they can with the information they find.

To put it another way: The biggest targets are professionals, companies, and office networks with poor security. We invest in security and insurance not because there’s an army of hackers targeting us, but because the only real targets are those without security and insurance.

Difference Between Commercial Automobiles and Business Automobiles

By Business Protection Bulletin | No Comments

bb-dec-1The difference between personal automobiles and business automobiles is the name under which it is titled. If you use your personal automobile in business, the business should have hired and non-owned automobile coverage to cover the business’ liability of your driving.

If the business owns the car, you should either have a personal automobile policy or a “drive other cars” endorsement on the business policy to cover your liability for driving a company car. The car owner and driver are often both sued.

So, what’s the difference between Commercial Automobile and Business Automobile? Commercial automobile coverage includes several policy forms. Garage, business auto, and motor carrier are each forms of commercial auto.

Business automobiles are cars, pick-ups, small trucks, large trucks, dump trucks, even ambulances can be on the fleet list. Business automobile is for standard usage owned vehicles for businesses. Garage forms are used for public repair shops, dealerships, attended parking lots, any other situation where the general public might drive the business vehicle or you have care, custody or control over other people’s vehicles. The risk is different from business auto because either the cars or drivers do not belong to the same organization. Garage liability also covers towing other vehicles. The garage form, simply stated, anticipates the owner of the vehicle and the operator will be different people on a regular basis, as part of the business.

Motor carrier forms anticipate different ownership of either the power unit or the trailer it hauls. The nature of long haul trucking is independent contractors “owner operators” hook to other business’ trailers and move them from one spot to another.

Motor carrier coverage is designed to cover the nuances of the independent operator system. Long-haul trucking has different exposures than the average salesman’s vehicle, and needs different coverage.

Of course, these commercial forms can confuse. Please call us today to assure you are covered properly. We appreciate your business.

Professional Liability Coverage

By Business Protection Bulletin | No Comments

bb-dec-3What distinguishes products, completed operations and professional liability?

A product is a good sold to consumers. Think about “things” when you think about products. Products liability covers the business which manufactures the product against injuries, illnesses or property damage caused by the product.

Completed operations are usually contracted building services which have a beginning point and an end point, like installing a heating, ventilation and air conditioning (HVAC) system. Since it is part of a greater system of insulation, walls, floors, ceilings and lights, HVAC is not a stand alone product. The outdoor compressor is. The installation is an operation.

Professional liability insurance covers service oriented business: designers, architects, dentists, doctors, or hair stylists. The key distinction is service versus a product or an installation operation.

So, how does this distinction affect claims negotiations?

Professional liability claims imply poor professionalism which directly affects your reputation. The paid claim implies dereliction of duty or incompetence.

The insurance company’s response to any claim is a business decision – determine the long-term cost of settling and benefit of not paying the claim, pay accordingly. Your reputation does not fit into this decision matrix.

The buying public saw this decision as a conflict of interest. The insurance company did not have to live with a loss of reputation, the professional did. Now the companies offer this solution:

The professional can veto the claims payment.

If the professional chooses to do so, the insurance company is limited to the agreed upon claim amount as their new maximum limit, including legal and claims costs to that point in time.

An architect, with a $1,000,000 professional liability policy, inspects a property and determines the structure is unsafe for renovation. The contractor talks the owner into going forward anyway. The building collapses. The owner sues the architect for “allowing” the contractor to start work before the structural issues are addressed. The insurance company offers a settlement of $100,000 after spending $25,000 on legal fees.

The architect can either endorse the settlement and pay the client or he can refuse, but now his coverage limit drops to $125,000 inclusive of legal fees. It is a much more difficult reputation decision than a business decision.

“Loose Lips Sink Ships”

By Cyber Security Awareness | No Comments

cyber-dec-2Check out some old World War II propaganda posters and you’ll see the phrase “Loose lips sink ships” popping up now and then. Various armed forces have used some equivalent, like the British “Keep mum” posters, Germany’s “Schäm Dich, Schwätzer!” which translates to “Shame on you, blabbermouth!” The essential message is the same: Be careful who you talk to and what you say when dealing with details best kept private.

When there’s a leak, it’s easy to start wondering who’s mad at you. Maybe you passed someone over for a promotion and they’re getting revenge by leaking sensitive information to a competitor. Maybe somebody you lost in a downsizing is having trouble getting work so they’re not afraid to burn their bridges. Or maybe… someone had a little too much to drink and started bragging about your company’s government contract or cutting-edge tech design in order to impress people at the bar.

In the movies, we see corporate espionage experts cracking code and even sneaking into government and corporate buildings in elaborate plans to get some juicy data on a thumb drive. In real life, it may well be that leaks are, more often than not, just embarrassing accidents.

Insurance may be able to help you recover when certain data is leaked, but it’s best if it doesn’t come to that. Cyber security won’t do you much good when your employees fail to appreciate the importance of keeping mum. Here are a few tips to ensuring that your people know how to keep a secret:

  • Repetition of the message. Repetition is the difference between confidently sharing a piece of trivia as a “commonly known fact” or qualifying it with “I think I read somewhere that…” A briefing on company security and discretion will help, making sure that confidentiality is a consistent part of your business culture will help more.
  • Hire people you can trust. If they have experience with sensitive data, then they already know the drill.
  • Establish a Need To Know protocol. If someone isn’t on a sensitive project, they don’t need to know about it.
  • Non-disclosure agreements. People who risk breaching their contract if they spill the beans have a little extra incentive to keep a secret.

Most employees don’t want to jeopardize their employer, and most secrets are leaked by accident. Just make sure to impart to your people the importance of keeping sensitive information under wraps.

When Copyrights Can’t Protect You

By Cyber Security Awareness | No Comments

cyber-dec-4Copyrights can’t protect everything. Namely, they don’t protect ideas. Copyrights can protect a finished work, a concrete, patented piece of software or an invention. The idea, on the other hand, is pretty much up for grabs. In other words, there’s really nothing to stop, say, a competitor in the mobile games industry from taking a prototype of your next release and paying their staff to clone it. As long as they’re not actively copying and pasting code and graphics from your game into theirs, there’s not much you can do about it.

Copyrights protect literary works, computer programs, dramatic and musical works, recordings, film and video, magazine articles, basically anything that exists in concrete, finished form. Copyrights do not protect names, slogans, phrases, titles, or industrial processes. Patents and trademarks can cover some of the items mentioned, but the gist of it is that copyrights are only there to keep people from taking credit for your finished work. Copyrights won’t stop anyone from stealing your ideas and developing them on their own.

Candy Crush is a famous example of a piece of software that many believe was taken piece-for-piece from an existing app. Candy Swipe predates Candy Crush, plays almost identically, but was produced for less money and released with less marketing. By 2014, Candy Crush had over 60 million likes on Facebook, while Candy Swipe had just over 50,000.

So what can we do when our ideas aren’t protected? Sometimes, the answer is “not much.” In the case of Candy Swipe, it wasn’t really their fault. Their product designs weren’t leaked, the game had already been publicly released, and a larger company seems to have borrowed their design without a second thought. Luckily, there are measures that sometimes work to keep others from taking our ideas:

  • Cater to a niche market. A massive corporation has no interest in stealing a piece of software with a market of only a few hundred users.
  • Offer what our competitors won’t. Better support, for instance.
  • Stay secure. With strong security measures and insurance in place, you at least don’t need to worry about any idea-swipers beating you to launch. This includes letting your staff know not to leak anything before you’re ready to go public. On that note…
  • Always budget for marketing. It’s not just about making sales, it’s about staking your claim to an idea in the public consciousness.

Dealing with the occasional plagiarist is part of doing business. You can’t stop anyone from cloning your app, but there are ways to stay a step ahead of companies with no ideas of their own.

Natural Disaster Crisis Preparation

By Construction Insurance Bulletin | No Comments

con-dec-2Hurricane Sandy, tornadoes, flood — all of these disasters affected construction firms during the past year. Some companies took direct hits, while others suffered from massive service demands, and shortages of help and supplies.

Although your business might never face such massive “destruction and distress,” other events –everything from IT failure to vandalism — could trigger a crisis.

Whether it’s a catastrophe or a stressful disruption, the best way to prepare for any potential disaster is to develop a catastrophe plan in advance. This plan should allow your staff to mobilize the right resources quickly in the right order so you can get up and running with as many contingencies as possible accounted for in advance.

How do you go about developing a plan? What’s the process? Who should you include? How often should you review and update it? An effective plan should involve a “business resumption team” with managers from these areas:

  • Information Technology
  • Communications – Internal/External
  • Moves and Relocation
  • Services and Logistics
  • Salvage and Security
  • Customer Service

Before a crisis erupts, the team will determine what activities to follow, assign responsibilities for these tasks, and provide the resources and information needed. When compiled and organized, these activities, responsibilities, resources, and information make up the disaster plan.

Don’t wait for a crisis to uncover the gaps in your preparations. Get started now on creating and/or updating your plan.

Feel free to give us a call so we can offer our advice and recommendations. Insurance might not solve all your crisis planning problems, but it can provide a solid foundation.

Hold Harmless Agreements – What is Best for You?

By Construction Insurance Bulletin | No Comments

con-dec-4Because construction projects are complex operations involving a number of subcontractors under your supervision, onsite accidents or injuries resulting from their work can easily lead to litigation against you. To protect yourself against claims, losses, and expenses if disputes arise during the project, make sure that all subcontractors sign a “Hold Harmless Agreement” clause.

The terms of these clauses will vary from state to state. In some cases, this clause will protect the contractor from claims by corporations or companies that did not sign the agreement.

There are three types of hold harmless agreements:

  1. Under the Broad Form, the subcontractor assumes all liability for accidents due to negligence of the general contractor, and combined negligence between the two parties. Because of its sweeping terms, this form is relatively rare – and some states prohibit it.
  2. With the Intermediate Form the subcontractor takes on all liability for accidents and negligence, but will not be held accountable for the general contractor’s actions. It doesn’t matter whether the incident was the subcontractor’s fault. If both parties were negligent, the subcontractor assumes liability all for its acts or omissions. Intermediate form agreements are relatively common.
  3. A Limited Form agreement makes the subcontractor liable only for the proportional part of its responsibility for a mishap. Other parties – such as subcontractors – will be held liable under their hold harmless agreement(s) for their corresponding part of the accident or negligence.

The type of agreement that’s best suited for your needs will vary depending on the nature of the project and state laws. As always, we stand ready to offer you our professional advice.