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!

Insurers take hit on hurricane deductible!

Sandy a Hurricane in name only......

A decision to not impose hurricane deductibles on homeowners who maintain coverage for their homes and dwellings impacted by Hurricane Sandy will likely be a costly one to insurers.

Typical 'Hurricane' deductibles are based on a percentage of the home value - usually between 2 to 5 percent. Without the Hurricane deductible, many homeowners impacted by the Superstorm will instead just face the standard policy deductible of between $500 and $1000.

Hurricane deductibles are allowed in New Jersey ONLY if the state is hit by a named hurricane with sustained wind speeds of more then 74 miles per hour. The National Weather Service downgraded Sandy to a post-tropical cyclone prior to it making landfall in Atlantic City.

Risk-modeling firms tallying the insured losses from the storm expect losses to be between $16 and $22 billion.

Claims preparation coverage….

How a ‘minor’ coverage endorsement can prevent a policyholder from incurring significant costs in developing a claim, presenting the claim to the insurer, gathering information requested by the insurer in response to the claim, and in negotiating the claim.

This frequently requires retention of various consultants, including construction consultants for building damage, accountants for time element coverages, and specialists when the claim involves complex or unique equipment or industry-specific requirements such as clean areas for computer or pharmaceutical manufacturers. Policyholders frequently hire public adjusters to oversee the claim preparation, presentation, and negotiation process, and the public adjusters frequently hire the necessary consultants. In other situations, a sophisticated policyholder will manage the claim process itself and directly retain consultants. The claim process is frequently referred to in the industry as the "adjustment" process, with both policyholder and insurer working toward an "amicable adjustment" of the claim.

Sophisticated policyholders frequently have coverage for claim preparation expenses in their policies, although most insurers specifically exclude public adjuster fees from that coverage. In a complicated claim, this additional coverage can be worth tens of thousands of dollars. One typical provision reads as follows.

This section covers the reasonable expenses incurred by the Assured for professional services such as auditors, accountants, architects, and engineers, except the Assured's own employees or public adjusters, which are required to present the loss which is covered by this Section.

As is typical in most policy provisions which provide for the insurer to pay claim preparation expense, public adjuster fees are specifically excluded.

Superstorm Sandy underlines need for Hospitals to have better Disaster Recovery Plans!

The equipment failures at NYU and nearby Bellevue Hospital, the nation’s oldest and one of its busiest, brought to the fore what emergency experts have warned for years. Despite bitter lessons from the recent past, U.S. hospitals are far from ready to protect patients when disaster strikes their facilities.

For most hospitals, “emergency preparedness” means being ready to treat a surge of patients from an earthquake or terror attack – disasters outside their walls. Even the federal program that coordinates hospitals’ preparedness at the Department of Health and Human Services has this mindset: it focuses on planning for mass fatalities and quickly reporting their number of available beds, not having redundant electrical systems.

For hospital administrators trying to keep their institutions in the black, disaster-resistant infrastructure is expensive and lacks the sex appeal of robotic surgery suites and proton-beam cancer therapy to attract patients.

Cell Phone thefts on rise in major cities.....Increased risk of Data Theft!

Police report that nearly half of ALL robberies in San Francisco this year are cell phone related - and most occur on transit lines.

Thefts of cell phones - particularly the expensive do-it-all smart phones - are costing consumers millions of dollars and sending law enforcement agencies and wireless carriers scrambling for solutions.

New York City Police report that more then 40 percent of all robberies now involve cell phones. Cell phone thefts in Los Angeles, which account for more then a quarter of all the city's robberies, are up 27 percent from this time a year ago

For the employer, increased thefts present also the issue of breech of data privacy - especially as it relates to the usage of company devices. Most employers consider information stored on company phones to be proprietary validating the reason for 'wipes' when employees leave or are terminated from a company.