Archive for April, 2011

Kidnap & Ransom Insurance coverage needed now more than ever

There has been an incredible increase in political and economic unrest which has caused a serious jump in kidnappings worldwide. The targets of these kidnapping has also expanded beyond executives and multinationals, and now includes students and non-profit workers as well. Studies by the State Department report over 20,000 kidnapping for ransom annually worldwide, and 48% of these reported kidnappings take place in Latin America and the Caribbean. The latest hot spots for kidnapping include Brazil, Mexico, Colombia, Philippines and Venezuela. Other counties where kidnapping and extortion are on the rise include Haiti, Argentina, South Africa, Nepal and India. The Indian Government acknowledges that in 2009 there were over 700 active kidnap for ransom groups in the country.

If there is a silver lining in all this it is that insurance coverage for these perilous actions are now widely available, via a Kidnap, Ransom and Extortion policy (KRE or K+R). These policies Read more…

Is Amazon’s “Cloudgate” a network security matter?

The recent extended outage of Amazon’s “cloud computing” business has generated many questions about what insurance policies would be likely to provide indemnification for losses caused by the crash.

Amazon has a significant cloud computing business, which it calls Amazon Web Services (AWS). AWS rents data storage and web services to its customers. These customers use the outsourced services to avoid the expense and distraction of providing those services for themselves. As a risk management matter, cloud computing customers should make sure that their data is stored in different locations and that they have adequate backup and disaster recovery options in the event of outages or crashes. As such “redundancy” services can be expensive, some of Amazon’s smaller corporate customers did not purchase them. When Amazon’s data center in Northern Virginia experienced an extended outage, these customers did not have effective contingency plans, and their websites performed slowly or crashed. Read more…

Attempt at savings through consolidation, but FTC blocks Georgia hospital deal

April 27, 2011 Comments off

An interesting case to block consolidation on anti-competitive grounds battles on in Georgia, in light of Healthcare Reform and the move towards more consolidation in an effort to wring out savings.

The Phoebe Putney Health System’s plan to acquire HCA-owned Palmyra Medical Center for $195 million hit a roadblock last week after the Federal Trade Commission challenged the deal as anti-competitive. The FTC voted 5-0 to request an injunction of the merger.

“The complaint alleges that the transaction as proposed would violate federal law by eliminating the vigorous competition that currently exists” between Phoebe Putney Memorial Hospital and Palmyra in Albany and the surrounding six-county area, said a statement released from the office of Attorney General Sam Olens.

The trend of consolidation will most likely continue as a means of cost savings, a side effect of Healthcare Reform.

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William Gallagher Associates is a leading provider of insurance brokerage, risk management and employee benefits services to firms with complex risks and dynamic needs, within industries that include technology, life sciences, financial risks, health care, renewable energy & clean technology, and environmental services. WGA has offices in Boston, MA; New York, NY; Hartford, CT; Princeton, NJ; Columbia, MD; and Atlanta, GA.

Health reform in Massachusetts…5 years in

It’s been five years since the landmark legislation that catapulted Massachusetts to the head of the national healthcare discussion. In 2006, a republican Governor and a democratic legislature joined together to pass Massachusetts health reform. The initial intent of Chapter 58 was the expansion of healthcare to all residents of the Commonwealth. At the time there was little conversation about the overall cost or quality of the care being delivered. Sound familiar? This is not dissimilar to what we saw only a few short year’s later on the federal level.

On this fifth anniversary, the Blue Cross Blue Shield Foundation released Health Reform in Massachusetts: Assessing the Results. This is a brief, very readable summary of some of the surveys conducted by various state agencies. Below are some of the highlights that have particular relevance to Read more…

Lessons learned from Briar Group data breach settlement with Mass AG

Much has been written about the recent settlement by the Massachusetts Attorney General with the Briar Group in connection with a significant data breach that occurred in 2009. Some of the early postings are very helpful (see links below), some have important mistakes, but I haven’t yet seen any that address a key insurance issue raised by the matter.

The Facts

Some of the basic information, as gleaned primarily from the complaint filed by the Massachusetts Attorney General, is as follows:

  • The Briar Group, LLC owns and operates several bars and restaurants in the Boston area.
  • In April 2009, hackers breached Briar Group’s network security and installed malicious code on its computer systems. Read more…

Workers Compensation: State of Illinois considers abandonment of the system

The Associated Press reported that the State of Illinois is considering abandonment of the Workers Compensation system. In its place would be a system where injured workers have to litigate in order to receive medical and indemnity benefits. If businesses and employees share the goal of providing prompt medical treatment and payment for lost wages to injured workers, this legislation should be opposed on a priority basis.

Illinois implemented Workers Compensation in 1912 based upon a simple no-fault principle: People injured on the job would receive prompt medical care, payment of lost wages and compensation for certain permanent disabilities without having to prove fault. In exchange, they would give up the right to sue their employer. This system operates in all fifty states and is funded by either private insurance carriers or state funds. It is far from perfect, but injured workers don’t have to wait years Read more…

Breach at email marketing service highlights privacy issues

All over the U.S., people have been receiving emails from familiar corporate giants (including Best Buy, Walgreens, Citi, Home Shopping Network, JPMorgan Chase, Kroger, The College Board, Brookstone, U.S. Bank, and Tivo, among others)  informing them that their names and  email addresses had been hacked and could possibly be used in phishing attacks attempting to perpetrate financial fraud by convincing individuals to reveal account information, passwords or other confidential information.  The hackers’ capture of both names and emails has increased concerns about “spear phishing” – the use of personalized emails containing the customer’s name and maybe even address, as well as the logo of the relevant financial institution. Such personalized emails often appear authentic so that consumers reveal sensitive account or other information. Many of the affected companies have responded by advising their Read more…