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Understanding Your Insurance Coverage What to Look For.

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Presentation on theme: "Understanding Your Insurance Coverage What to Look For."— Presentation transcript:

1 Understanding Your Insurance Coverage What to Look For

2 Presenters Dawn Martin, AVP Underwriting Irwin Siegel Agency, Inc. Brad Storey, MSW – Director, RM Division Irwin Siegel Agency, Inc. John McKeon, Esq Hardin Kundla McKeon & Poletto

3 House Keeping Emergency Exits Bathrooms Break Cell Phones Presentation Structure Lunch/Individual Questions Presentation/Resources on website Questions

4 Learning Objectives Business Income Extra Expense Understanding Flood Coverage Cyber Liability – What to look for Directors & Officers Coverage –How it interacts with general liability Risk Management Latest Trends Right to risk- current litigation topics

5 Business Income & Extra Expense Business Income – Net income you would have earned if a loss had not occurred –Waiting Period – 24 to 72 hours Extra Expense – Operating expenses incurred to continue normal operations –Be sure to save all receipts & proof of expenses –Coverage Triggered 3 ways Direct Physical Loss Off Premise Utility Failure Civil Authority

6 Emergency Vacating Different policies will vary in whats covered –Broadest Coverage imminent danger –Not required to wait for mandatory evacuation

7 Flood Most Property policies exclude flood –Can be purchased separately (or endorsed on) Flood Zones –Standard Market or National Flood Policy –NFIP Zones A, AE, V, B, D, X500 Find Zones at –

8 Flood vs. Water Damage Flood –Overflow of Inland or Tidal waters –Runoff of surface water from any source Water Damage –Back up of sewers and drains –Underground water that causes damage to a structure

9 Cyber Liability & ID Theft What does ID theft take? –Name, Date of Birth, Phone #, & Address –1 bank statement can give someone all they need Statistics (Healthcare ID Theft) –2007 – 200,00 cases of ID theft –2011 – 1.5 million –800% increase over 5 years

10 Exposures System Breach (Hacking) Paper records Electronic Health Records Accepting donations or selling products on-line Operations –Shredding Operations, Computer Recycling Programs Removable Storage –Flash drives, laptops, smart phones

11 The ID Theft/Cyber Products There is something for everyone –Not a one-size fits all type of coverage –Cost can range from $1,000 to over $30,000 GL and D&O Policies offer little –These policies may offer a little coverage but it is often narrow and limits are small. –As a stand alone, this is inadequate for most agencies

12 Key Differences ID Theft –Must be fraudulent use of personal info (info must be breached AND used) –Attorney fees and notification costs are often limited with a smaller sublimit Cyber Liability –Coverage is more broad –Be sure to get coverage for removable media storage, lost or stolen. –Paper products may also be included

13 Additional Coverage to Look For On & Off Premises –Some only cover breaches on your premises Security & Privacy Liability –Pays damages to 3 rd parties for breach Event Management –Covers cost of notification, public relations, and other services to mitigate damage of cyber incident Regulatory Action –Defense for Civil Proceeding by or on behalf of a Gov agency

14 D&O and EPLI Directors and Officers –3 Different types of claims Claim against an individual NOT indemnified by the organization Claim against an individual indemnified by the organization Claim against the organization Employment Practices Liability –Examples of Claims Wrongful termination Discrimination Sexual Harassment

15 What to Look for Limits –Separate limits for D&O and EPL are ideal Frequency of EPL – Severity with D&O Defense Costs –Inside vs. Outside the limits Outside limits is the best option Hammer Clauses –Company ceases defense of claim and turns it over to insured Split provisions are available on hammer clauses

16 D&O Claims D&O policies are written claims made –The carrier at the time of a filed suit/report to carrier will respond to the claim Full Prior Acts Coverage –Requires full disclosure of incidents that may result in a claim Extended Reporting Period (Tail) –Provides extended time to report a claim –12, 24, or 36 months are typical extensions

17 D&O vs. General Liability D&O –Non bodily injury claims –Sexual Harassment covered General Liability –Bodily injury claims –Sexual Abuse is typically covered here

18 Risk Management Not just safety Art or Science? Protecting your assets while enhancing operational efficiencies Assets –People you serve, property, employees

19 Risk Management Classes –Economic Marketplace –Legal Compliance –Political Law/Policy –Social PR – Reputation –Physical –Juridical Jury Attitudes/Venue Process –Identification –Analysis –Control –Finance –Administration –Continuous process: Mitigating one exposure may bring about exposures in other areas

20 Cyber Liability Technology changes faster than we can adapt –Original Iphone 2007 Human Service Providers targets of hacking? –Value in Medicaid/Medicare numbers –Medical Identity Theft (fastest growing form of ID theft) Electronic Health Records –Not all vendors are created equal

21 Cyber Liability Controls –Encryption is key, password changes, capacity to remotely wipe data –Limit access to flash drives, BAA agreements w/ vendors Recent Case –Hospice of Northern Idaho Stolen unencrypted laptop w/ 441 records breached HHS found numerous violations (no policies) assessed $50k fine 1 st fine assessed for < 500 record breach

22 Flood & Water Damage Flood –Widespread & will impact employees –Rain & wind trajectory will impact the flood potential and severity Water Damage –Can be detected early with a quality self inspection program

23 Protecting Assets Storage 18 inches from floor & ceiling Computers mounted under desks –Protects from rising water and water from ceiling Shutting off electrical power to prevent damage Computer servers located on higher floors Pictures and inventory –Perhaps the most important

24 Clean Up & Mold Take extreme caution and contract out when necessary (Risk Transfer) Mold can create significant issues for people w/ respiratory problems –Many mold spores are airborne – particularly when area is disturbed –Be cognizant of HVAC systems – can impact entire building Smaller areas (< 10 sq ft.) – contain and handle internally w/ Proper PPE –N-95 Respirator (NIOSH)

25 Trends in RM Practices On-line Training –Cost effective, but training requires a blended approach –Important to conduct an analysis of what you are spending in all areas (direct and indirect costs) –On-line training provides for greater efficiencies Internet based – can be taken anywhere Not paying for travel costs or for trainers Can be more topic focused (driver training)

26 GPS Benefits –Logistical Location –Eye in the Sky –Route Optimization Savings –Fuel –Time/Prodctivity –Insurance Not immediate (investment)

27 Business Continuity & Emergency Planning Lessons Learned from Sandy –253 deaths in 7 Countries –Over $20 billion insured losses Communications Systems –Phones/Emails failed (planning for this) IT Systems –Cloud & back-up systems Redirection of Workforce –Working from home or other facilities All adding to cyber exposure

28 Business Continuity & Emergency Planning Dont Wait – if there is imminent danger start the evacuation process –Reminder of what Dawn discussed earlier Property Damage Civil Authority Off Premise Utility Failure –Be cognizant of shelter in place practices Each situation requires evaluation for this –Lessons learned from the Audience

29 Proactive Risk Assessment Process based solution These are crucial as we move forward in a changing environment Proactive vs. Reactive (Investigation Process) This is a long term investment, but one that is worth it

30 Conducting a PRA Failure Mode & Effects Analysis –Identify an area to be assessed –Describe System and Function –Create a block or process flow diagram indicating relationships within the process –Worksheet containing information about the system (relative to the diagram) Development of Risk Priority Numbers Templates/Samples available

31 Asset Protection Greatest asset is the people you serve –Without them, there is not business Remember RM activity is an investment that does not end. John McKeon

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