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As Ebola threats continue, insurance options respond – or will they?

ebola_hospitalWhile the current Ebola pandemic still remains primarily isolated to West Africa, the death of Thomas Duncan earlier this month in Texas has raised many concerns relative to the potential spread of the disease globally. At this time, two nurses responsible for treating Duncan have both tested positive for the disease, raising questions about whether American hospitals and their staff are adequately prepared to contain the virus.

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When pandemic strikes: does your company have an action plan?

October 17, 2014 Leave a comment

hazmatFollowing reports of the first Ebola transmissions on U.S. soil, the threat of the disease continues to escalate across the world. The Ebola outbreak is only the latest version of potential worldwide pandemics with serious economic impacts affecting supply chain and business operations for companies of all types. Industries like mining, agriculture and energy face the greatest risks with Ebola, since these groups have a high number of operation bases and workers in the affected nations. However, companies that do not operate in Africa may also experience business interruptions when employee access to the workplace is compromised.

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Cyber liability – the changing D&O risks

October 10, 2014 Leave a comment

d-and-o_cyberIn a sluggish world economy, hacking has unfortunately been a robust business. Recent reports issued by the Ponemon Institute, Symantec and others have detailed the stunning growth in cybersecurity breaches (such as a greater than 60% increase in breaches in 2013) and given vivid support to the now-common warning about breaches: “It’s not if, it’s when.”

The avalanche of cyber breaches has alarmed companies — and insurers. Cyber liability exposures include the following, among others:

  • First-party costs incurred in dealing with the breach (forensics, legal, notification, credit monitoring, call center, etc.)
  • Third-party exposures to individuals and entities affected by the breach
  • Regulatory enforcement (SEC, FTC)
  • Intellectual property exposures (often via corporate espionage)
  • Reputational exposures
  • Extortion exposures
  • Theft exposures (such as hacks of bank accounts or phishing-induced erroneous transfers of money)
  • Business interruption costs
  • Data restoration costs

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Phishing Claims – watch out for wire fraud transfers

October 7, 2014 Leave a comment

fraudBe aware – issues of cyber crime are becoming more prevalent in today’s business landscape, with instances of hackers running various email scams that target a company’s CFO, controllers or directors and officers. Posing as the President or Founder of the organization, the fraudsters request an immediate transfer of large sums of money, (oftentimes upwards of $500 thousand to $5 million) indicating it is required to facilitate an offshore payment of a foreign tax obligation or for the acquisition of a foreign subsidiary. After sending the email, the hackers often make a follow-up phone call to the recipients to assure them that the request is high-level, legitimate and kept fully confidential. Using social media sites like Facebook and Twitter, as well as reviewing public company filings, the criminals gather as much data as they can to gain intimate knowledge of the company policies. As a result, the CFO or other targeted officers or employees come to trust these instructions and dutifully wire the money. Oftentimes, the wire fraud isn’t detected until the receiving bank questions the large transaction. Read more…

Cyber liability Q&A: Important questions for all policyholders

September 26, 2014 Leave a comment

cyberlockDespite ongoing efforts to thwart off the threat of cyber crime, businesses today continue to face ongoing challenges when it comes to mitigating their risks. The evolving challenges posed by major data breaches have left both insurers and policyholders in a constant state of flux as the marketplace aims to manage, and stay ahead of the issue. Below are several key questions and answers about cyber liability insurance and some best practices for dealing with cyber loss.

It seems like every week there’s news of another company facing cyber losses from a large data breach. How has the marketplace changed since the onset of these crises?

While the onset of these breaches has prompted many changes to occur, one of the most important for policyholders relates to first party expenses, such as Forensics, Notification, Public Relations and Credit Monitoring. Historically, many insurance carriers would sublimit the first party expense limits to cap their exposure. Now that more carriers have entered the Cyber insurance market and created competition, many have started offering full limits on first party coverages in order to stay competitive. I believe this is one of the most positive developments for policyholders because typically the largest payout on a Cyber claim is on the first party coverages, especially forensics. Read more…

Categories: Property & Casualty

ISIS terror is making K&R policies all the more critical

September 23, 2014 Leave a comment

isisThe release of a third video showing the Islamic State in Iraq and Syria (ISIS) executing a foreign hostage has ignited global unrest and brought heightened awareness to the growing threat of kidnapping and terrorist activities in the Middle East. In August, American journalist James Foley became the first U.S. national to have been executed since the start of the Syrian conflict in 2011. Within two weeks, the militant group publicly killed another U.S. hostage, followed by a third video in which a British national was beheaded. ISIS claimed each execution an act of retribution for the ongoing U.S. airstrikes against the group’s position in Northern Iraq. While debate ensues over the relationship between ransom payments and funding terrorism (the U.S. and U.K. governments currently both have non-payment policies for ransom demands), the risks facing foreign national workers living in these areas of extreme danger continue to mount. Aid workers and media personnel (including journalists) sent to work and report on the conflict in Syria have become primary targets of ISIS. According to data from Reporters without Borders, 65 journalists killed last year while covering stories in country, while an estimated 25 to 40 individuals are currently being held hostage.  Read more…

Attention doctors and drug makers: Sunshine Act database goes live Sept. 30th

September 18, 2014 Leave a comment

money_medical_computerOn September 30th, the Centers for Medicare and Medicaid Services (“CMS”) will publicly release all sales and marketing expenses from drug companies to doctors and hospitals. While cost transparency tends to focus on medical providers and insurers, the financial relationships between drug manufacturers, physicians and teaching hospitals have become heavily scrutinized. The initiative, arising from a section of PPACA commonly known as the “Sunshine Act,” is part of nationwide effort to promote transparency throughout the healthcare industry. The law requires applicable manufacturers of covered drugs, devices, biological products and medical supplies to report to CMS information about payments made to physicians and teaching hospitals as well as any ownership and investment interests held. Submitting the information to a federal entity will hopefully reduce gifts and kickbacks that doctors sometimes receive when agreeing to use a drug company’s product.  Read more…

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