Supply chain disasters and disruptions can cause lasting reputation damage!

Supply chain disruptions frequently result in a direct financial hit for businesses, but the damage a disruption can inflict on an organization's reputation can have much longer term consequences.

Global sourcing strategies such as just-in-time inventory, competitive wages and cheap raw materials also can pose hard-to-quantify risks from second- and third-tier suppliers that could subject businesses to Foreign Corrupt Practices Act penalties, environmental violations and regulatory actions as well as reputational damage, experts say.

A recent example is the November fire at a Bangladesh factory that killed more than 100 garment workers, many of whom reportedly were locked in the building. The factory was making clothing for Wal-Mart Stores Inc., Sears Holdings Corp. and The Walt Disney Co., among others.

In 2011, Wal-Mart audited more than 9,000 factories and the factory in Bangladesh was not authorized to produce merchandise for the Bentonville, Ark.-based retailer due to safety standards. However, a supplier reportedly continued to subcontract work with the Bangladesh factory.

For companies, cyber threats get MORE costly!

Cyber security will become an increasingly complex and costly part of doing business, but caution and preparedness is a better alternative than getting hacked or duped by cyber thieves, security experts have stated.

IT managers are grappling with vulnerabilities and security risks as companies move more of their networking operations off-site and into the so-called data cloud, and as more personal computing is done on smart phones and mobile devices.

Companies are also facing increasingly high stakes for preventing security breaches, as both clients and the government demand that companies do more to protect themselves from security lapses.

Outbreaks of attacks in recent months and years show a growing push by organized crime, sovereign nations and internet activists to exploit weaknesses in the data security of US networks and their users.

The websites of large banks, for example, have been hit with what are called 'denial-of-service' attacks. While banks have not reported sensitive customer data being stolen during these attacks, their websites have repeatedly crahsed forcing customers to bank offline.

A big concern for IT managers is the growing demand that companies let their workers use their own personal devices - be it laptops, tablets or smart phones - to connect with a companies servers.

Known as BYOD (Bring you own device), the trend is proving to be a nightmare for IT managers. In essence thay now have to secure something they don't have control over.

Small businesses, which typically lack the IT expertise, are particularly vulnerable and appear to be more of the focus of hackers' attention.

A continued sign of the growing threat is the emergence of Cyber Liability insurance policies to help businesses deal with the costly aftermath of a cyber attack.

Becuase standard General Liability insurance policies will not protect from a cyber attack, insurers have introduced specialty coverage that can help defray costs of a breach. This can include the costs of notifying customers, conducting forensic investigations and even liability for class-action lawsuits.

Solving the Unsolvable – Sandy Offers Wake Up Call for Updating Wage and Hour policies!

Tropical storm Sandy created havoc for businesses trying to rebuild as quickly as possible but it is important to remember that there are NO emergency exceptions to wage and hour laws.

Many states have deadlines for providing paychecks to employers and they typically do not make exceptions for natural disasters. Some states have a financial penalty for each day a paycheck is late.

The Department of Labor projects that approximately 80% of all US employers are in violation of Wage and Hour laws to some degree.

Wage and Hour claims include issues such as:

-         Misclassification of workers between exempt and non-exempt.

-         Failure to pay for meal and break periods.

-         So-called “donning and doffing” claims.

-         Allegations of failing to pay for “Off-the-clock” work.

-         Failure to include bonuses and commissions in the computation of base pay.

One recent study by a major employment law firm showed that 88% of employment class actions that they handled in 2011 involved Wage and Hour issues which can cost employers MILLIONS of dollars.

The insurance marketplace has historically failed to provide a solution for this exposure and typical EPLI policies outright exclude coverage………Until Now.

2012 into 2013 - New Year Blessings to All!

A Happy and Prosperous New Year to all my followers, friends and clients!

2012 was a challenging year to say the least - Sandy, SandHook, Aurora, the Fiscal Cliff, Mark Sanchez....

2013 can ONLY be better.

Best to all!