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Basic Cyber Insurance Information

Tuesday, July 3rd, 2012

Basic Cyber Insurance

It is next to impossible to determine when a data breach might occur, what damage would be caused or even budget adequately in the eventuality that a data breach may occur. Having cyber insurance could help counterbalance unexpected costs arising out of breaches, however, there is no way to insure against such expenses as, diminished reputation or customer disappointment. For this reason, one should never take insurance as secondary to observing decent data security and privacy practices.

Cyber insurance policies differ from conventional insurance, in that they emphasize on alleviating eventual legal liabilities that could arise from data breach. Therefore cyber insurance policies tend to be inflexible in responding to a data breach. An organization therefore ought to involve relevant managers through the policymaking process and each related department made to understand the policy options. Companies looking at cyber insurance as an option should consider the following steps:

1.     Evaluate the risks of a data breach.

Before considering insurance, the first step is to assess your company’s overall risk of suffering a data breach and the sensitivity of your company’s data. Assessing the risk could be done by considering your company’s type of industry, the volume and nature of data you handle, your brand reputation, technology infrastructure and the number of third party contractors with access to delicate data.

2.    Determine available financial resources for effective breach response.

Prior to investing in cyber insurance, the company ought to determine if they have adequate finances to cover services such as identity recovery and monitoring, breach notification, network downtime, legal, forensics investigation, regulatory penalties, fines and outlays arising from a class-action lawsuit. According to the Ponemon Institute, cyber-crimes in 2011 cost organizations between 1.5 and 36.5 million dollars per data breach.

3.     Comprehend your current insurance coverage and carefully evaluate policy options.

Standard insurance covers that organizations take, offer cover for liability coverage for tangible property only, such as replacing stolen workstations. The liability policy however, may not cover the cost resulting from breach of customer data. Cyber insurance can be put in place to cover costs arising from gaps that could cause an organization to be held liable to cover full costs from data breach.

Each cyber insurance carrier’s coverage will vary. Typically cyber insurance coverage should cater for liability for data breaches, regulatory, legal fines and penalties and initial costs to respond to breaches.

These are the common coverage limitations:

  • Breaches caused by a Third-party/contractor
  • “Paper” breaches i.e. Non-technical breaches
  • Data breaches arising from lost data devices such as laptops or flash drives
  • Vendors (legal and data breach service providers) may choose which breaches to respond to.

4.    Assess your Risk.

An organization needs to perform a thorough security and privacy risk assessment, which in turn could help the organization identify, assess and alleviate gaps in its security and privacy program.  Diminishing gaps found could reduce risks in breaches and lower exposure should a breach occure. Documenting the risk assessment could lower insurance premiums and help speed up the underwriting process.

5.     Find a legitimate and knowledgeable broker.

A knowledgeable insurance broker who understands cyber insurance will easily break down and compare policies different insurance providers offer. A good broker will help identify and reduce breach risks and validate the need for a policy as part of their value added services.

6.     Ensure you have approved vendors.

When responding to a data breach, some cyber insurance policies may require clients to engage the services of use pre-approved vendors as a substitute of their own service providers. Such a limitation in policy could impact the quality of response.

7.     Circumvent common pitfalls with insurance carriers.

Disputes on coverage most often arises when the insured has not fully understood the policy. For instance, on the issue of pre-approved vendors, a company could prefer to use its internal resources rather than engage the services of another vendor. It is wise to resolve these minor issues before making the policy binding.

Visit our website if you want to know more about Cyber Insurance or Web Developer Insurance.

Important Items for Employers Regarding Health Care Reform

Friday, April 1st, 2011
Chicago Health Insurance

Public health poster at the national museum of health and medicine.

The new provisions in the health care law can be complex and difficult to understand, especially in how they relate to employer-sponsored group health plans. It is important for employers to understand and plan for the changes in their obligations under the new plan, as failure to do so can mean fines or penalties for any violations.

Grandfathered Plans - Health Care Reform allows plans that were in effect on 3/23/10 to have grandfathered status. This means that these plans can delay implementation of certain required provisions. These existing plans can change only very slightly to maintain their grandfathered status. This means no increases to participant costs or decreases in benefits.

Coverage for Adult Children up to Age 26 – Plans beginning on or after 9/23/10 must provide dependent coverage for members with adult children until they reach age 26. Children no longer have to be full-time students, reside with parents, or be unmarried.

Pre-existing Conditions for Children under Age 19 – Plans beginning after 9/23/10 may not impose pre-existing conditions on children less than 19 years of age.

Lifetime Limits and Restrictions on Annual Limits – All plans after 9/23/10 are prohibited from imposing lifetime limits on essential health benefits, and are restricted in the dollar amount of annual limits imposed. After 1/1/14, these limits will be banned. Currently, these essential benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services.

Equal Treatment of In-network Versus Out-of-network Emergency Services – After 9/23/2010, plans must treat out-of –network emergency services like visits to the E.R. the same as they do for in-network emergencies. Plans will no longer be able to pre-authorize emergency services.

Provide Preventive Care Benefits without Costs to Participants – After 9/23/10, plans may not impose cost-sharing requirements on preventative care services and benefits. This means plans cannot impose co-pays, deductibles, or co-insurance on services like annual physicals, immunizations, and mammograms.

Rescissions Allowed Only in Limited Circumstances – After 9/23/10, plans may not rescind existing coverage or terminate existing plans except with notice to enrollees and then, only in the case of fraud or misrepresentation.

New Appeals Processes – After 9/23/10, plans must have written internal and external appeals procedures. The law stipulates specific methods and structure for these appeals.

Reimbursement of Over-the-Counter Medications Without a Prescription – Beginning 1/1/11, a health care flexible spending plan, health savings account, or health reimbursement arrangement may no longer reimburse over-the-counter medication without a prescription.

Health FSA Contributions Are Capped effective January 1, 2013 – Regardless of plan year, employees may only defer up to $2,500 into a health flexible spending account plan.

Tax Credits for Small Employers – For tax years 2010 through 2013, small employers (those employing fewer than 25 full-time equivalents with average annual wages of less than $50,000) who purchase health insurance for their employees may receive a sliding scale tax credit. Small employers with 10 or fewer workers with an average wage of $25,000 or less may receive the full value of the credit. To qualify for a tax credit, an employer must contribute at least 50 percent of the total premium cost of a benchmark premium.

Subsidy for Retiree Coverage – Effective immediately and available until 1/1//14, group health plans may be reimbursed for certain expenses they incur for early retiree medical coverage. Early retirees are between age 55 and the age at which they become eligible for Medicare.

Provide Breast-Feeding Breaks to Nursing Mothers – Effective in March of 2010, employers must give employees who are nursing mothers reasonable break times to express milk for their children during the one-year period after birth. A private space, other than a bathroom, must be made available.

If you want to know more about health insurance policies or get a free quote, click here for a free Chicago Health Insurance quote.

Auto Insurance and Theft

Friday, July 9th, 2010

The theft of your automobile or its contents can be devastating and may leave you feeling violated, angry, confused, and worst of all – without transportation. There are many ways to prevent theft such as buying an anti-theft device like a “club” that attaches to your steering wheel, car alarms, ignition cutoff switches, or by always parking your car in a locked garage. Some people even resort to more drastic devices such as the Lo-jack, which will track your car via GPS should it be stolen, allowing law enforcement to track the thieves down and in some cases even cut power to the engine of the stolen vehicle remotely with services such as On Star. No matter which measures people take, however, thieves figure out ways to steal cars and their contents. For every technology man has invented, crooks have invented a way to defeat that technology.

Auto TheftAuto theft is covered under the comprehensive section of your auto insurance policy and applies to the loss of the vehicle as well as parts of the car such as tires, rims, airbags and catalytic converters. This may sound strange until you consider that nationally, more than 75,000 airbags alone are stolen every year from vehicles.  Comprehensive coverage for your vehicle (which is not mandatory) also pays for events such as fire, vandalism and weather-related damage like hail or a windstorm, including damage from floods and earthquakes.

The premium that you will pay for comprehensive insurance is affected by the risk of loss, or the likelihood that an insured car will be stolen or damaged, as well as the car’s value at the time of the loss. Certain types of cars are more likely to be stolen than others, and are more expensive to insure, for example. According to the National Insurance Crime Bureau (NICB), the 1995 Honda Civic is the most stolen vehicle in America, followed by the 1991 Honda Accord, 1989 Toyota Camry and 1997 Ford F-150. Other favorites of thieves are the 2004 Dodge Ram pickup, Acura Integra, Toyota Corolla and Nissan Sentra.

Older vehicles top the list and are targeted because there is still a large market for their parts. Carjacking, while covered more prominently in the media, are not as common as people might think, attributing to only about 3% of auto thefts each year. The FBI reports that the value of stolen cars in a typical year is approximately $6.4 billion, with the average value of a motor vehicle stolen at $6,751.

This means that crooks aren’t stealing Mercedes Benz and BMW’s from the well-to-do, they are stealing average, everyday vehicles owned by regular people. A recent statistic shared by the FBI says a motor vehicle is stolen in the United States every 33 seconds, with the odds of a vehicle being stolen at 1 in 210. The odds of theft are highest in urban areas. About 38% of thefts occur in the South, 34% in the West, 18% in the Midwest, and 10% in the Northeastern U.S. Of all of these, only 12% of cases were solved. These statistics should be enough to convince any driver to fully insure their car to protect against theft.

For more information on auto insurance and how it can protect you, please fill out a free Auto Insurance Quote at Premier Insurance Services of Chicago.