Michael’s… 3rd Retailer Suffers Breach?

Target and Neiman Marcus are trying to recover from recent data breaches. A group of hackers in Eastern Europe are believed to be responsible for both. After the dust settled, it’s been reported that 70 million to 110 million people were affected by Target’s breach, and another 1 million were affected by the Neiman Marcus breach. Michael’s, the largest arts and crafts retailer in the US, seems to be the 3rd major American retailer to suffer a similar breach in a very short time. Michael’s is still investigating whether or not an actual breach occurred, but if this story ends like most of them begin, we will have a lot of people wondering and worrying if their personal information has fallen into the wrong hands.

What does this tell us? It tells us that businesses should be worried more about a their system being compromised and breached than an actual break and enter. It also tells us that no business or corporation is safe regardless of how big they might be, and that’s scary. Target, Neiman Marcus, and Michael’s can and will recover from these devastating data breaches, but small to medium size businesses might not be able to recover from a similar breach. While business owners might not be able to ever prevent a breach, they can prepare for one. And if you’re business is interesting and growing, a potential breach is inevitable. Cyber liability insurance, which is not included in general liability, is an optimal solution and can help you recover from a devastating breach. Businesses that unfortunately suffer a breach with no cyber liability coverage might be forced to ultimately close their doors.

For questions or concerns about data breaches and cyber liability insurance, please don’t hesitate to email me or leave a comment.

What Is Extended Business Income? And What Every Business Owner Should Know…

A business interruption is usually the outcome of a serious claim. That interruption, better known as business income insurance, is one of the most important coverages in your policy. It covers the loss of income that your business will incur due to a necessary suspension of day-to-day operations as a result of a serious claim. This coverage is usually standard in most business or commercial policies. It’s important to remember that coverages can vary between carriers. Therefore, the actual limit and/or period of time provided by this coverage will usually be different between carriers, and more or less important to you than other business owners.

Extended Business Income is considered an optional coverage in most business and commercial policies. It is even more important than the initial interruption of business. Your customers and business income will not return to normal the day you reopen your doors weeks or months after a serious claim has been handled. This is where your extended business income kicks in, which provides coverage for customers and sales to return to normal once the business suspension is over. The limit and length of time for extended business income varies between carriers. Some carriers provide this coverage for an additional 30 days, while others may cover it for 90 days. It really depends on the carrier.

Please comment or email me with any questions, or for a detailed analysis of Extended Business Income and how it can make a world of difference for your business.

Insurance Rates and Zip Codes

Many people wonder why their insurance premiums increase when they move across town. However, many people don’t realize that their premiums could have very well decreased just as easily as they increased. Your new zip code, amongst other factors, is usually the main reason why you’ve experienced an increase or decrease in your premiums. If you move to an area where claims/losses are frequent or more prevalent than your current location, your insurance premiums will inevitably increase regardless of how good your driving record is or even if you’ve never had a claim/loss. Insurance companies essentially share risk amongst their clients to ensure that their claim payouts will never exceed their available cash. They determine who’s sharing risk by their respective location, which is usually zip code, or sometimes even as specific as your exact longitude and latitude. So could your rates possibly change by moving a few blocks away from your current location… the answer is yes.

Other factors that can effect your auto and home rates include: the actual risk being insured (auto, home, etc.), your individual claim/loss history, your insurance score, and other individuals in the household (spouse, children, etc.).

Questions, concerns or feedback, please don’t hesitate to email me or leave a comment.

A Personal Umbrella Policy… Why Everyone Needs One.

In today’s economic climate an unforeseeable lawsuit could be right around the corner. It’s impossible to predict the amount that could be awarded to the winning party, which you could be responsible for paying. An umbrella policy is an excess liability policy that provides coverage when your underlying property coverages have been exhausted. If your property liability limit is $100,000 and the judgement rendered is $250,000, you will be responsible for $150,000. If you don’t have the additional $150,000 to pay in damages, you will unfortunately be in jeopardy of losing current and future personal assets. However, if you have a $1 million umbrella policy, the additional $150,000 will be covered under the umbrella. Most umbrella policies are rather inexpensive, and are definitely worth the premium in comparison to the possible cost of not having one and needing it. Umbrella policies are constructed to cover and offer excess coverage for all of your property, such as autos, home, boats, investment properties, etc. Most carriers offer umbrellas with limits up to $5 million, and even higher limits if you have several personal assets of high worth.

Questions about your personal property, concerns or feedback, please don’t hesitate to email me or leave a comment.

Related articles

• Personal Umbrella Insurance 101 (durhamandbates.wordpress.com)

The Syrian Electric Army Warns Small Businesses

The Syrian Electric Army is a group of hackers that have repeatedly embarrassed one large business or organization after another. They’re government and regime supporters of Syrian President Bashar al-Assad. Despite the recent Congress battle of whether or not to side with the White House in striking Syria for using chemical weapons, one would be remiss to think that the flurry of cyber attacks by the Syrian Electric Army is not linked to Assad and his recent actions. Nevertheless, since 2011 the Syrian Electric Army has successfully hacked more than 20 businesses throughout the world.

Those businesses include:

• September, 2011 – Harvard University
• April, 2012 – LinkedIn
• September, 2012 – Aljazeera
• February, 2013 – Haaretz
• February, 2013 – Sky News Arabia
• March, 2013 – Qatar Foundation
• March, 2013 – BBC
• April, 2013 – CBS
• April, 2013 – Associated Press
• April, 2013 – The Guardian
• July, 2013 – Thomas Reuters
• August, 2013 – The New York Times
• September, 2013 – U.S. Marine Corps

Most of their attacks included Websites, Facebook, or Twitter disruptions. Some have been ill attempts at humor, for instance, when they hacked Thomas Reuters and tweeted several political cartoons. Other attacks have caused quick and negative reactions, such as when they hacked the Associated Press. They then tweeted that there had been explosions at the White House and Barack Obama was injured, subsequently the DOW Jones dropped drastically before recovering.

All of these groups or businesses are worth millions if not billions. It’s probably safe to say that most if not all of them have some kind of Cyber Liability Coverage; however, just think if they didn’t. The financial damages could be devastating, as well as the effects on any third-party that might be involved. Despite the financial damages being devastating, most of them would’ve probably recovered because of their financial strength. Can we say the same about recovery for the average small to medium size business? Probably not. Is it likely that the Syrian Electric Army attacks your thriving internet business, no; but, there are millions of hackers and smaller groups who would love to attack your business and become your worst nightmare. According to a study by Net Diligence, in 2012 the average Cyber Liability Claim cost $3.7 million per breach.

A great risk manager can walk you through and explain the need for cyber liability coverage. Questions, concerns or feedback, please don’t hesitate to email me or leave a comment.

RELATED ARTICLES

• A Data Breach Can Be Devastating! (https://yourriskmanager.wordpress.com/)
• FBI makes Syrian Electronic Army a public enemy (news.techeye.net)
• Syrian Electronic Army placed on FBI wanted list (zdnet.com)

A Data Breach Can Be Devastating!

In 2011, at a Senate Arms Service Committee, former CIA Chief Leon Panetta said, “The next Pearl Harbor we confront could very well be a cyber attack that cripples our power systems, our grid, our security systems, our financial systems, our governmental systems.” Panetta is actually on record for speaking about the dangers and real possibilities of a cyber attack on several occasions. Despite what many claim were failed attempts by Panetta to push cybersecurity legislation, the reality of more and more cyber attacks today has many wondering if there is anything than can be done to stop or thwart such an attack.

As a risk manager, the risk of a cyber attack or data breach for my existing and potential clients is my number one concern. Cyber liability coverage is the only answer for business owners of all sizes, especially small businesses. Many business owners are under the false belief that only big businesses or large corporations have to worry about cyber attacks or a data breach; however, that’s just not true. In fact, small businesses are more likely to suffer a cyber attack or data breach because they lack the funding and infrastructure to hire an in-house risk management team to help set policies and procedures to protect them against such an attack.

Alarming statistics provided by the Small Business Authority reveal that small business owners just don’t understand the real threat of a potential cyber attack. In 2012, a survey on small business owners by the National Cyber Security Alliance and Symantec stated that 77 percent of small businesses say their company is safe from cyber threats such as hackers, viruses, malware or a cybersecurity breach. The interesting part of the findings, however, is that 83 percent admit to having no formal cybersecurity plan.¹

If your business suffers a data breach without existing cyber liability coverage there’s a good chance you might not be in business much longer. Government consequences and the financial impact are usually too much to handle for a small to medium size business. Fees including a forensic examination and notification of third parties can be quite costly and just the beginning of your problems. A great risk manager can walk you through and explain the need for cyber liability coverage.

¹ http://www.thesba.com/2012/10/31/small-businesses-show-lack-of-concern-for-cybersecurity/

Related articles

• Most companies don’t have data breach cyber insurance (net-security.org)
• Brokers see soaring demand for insurance against cyber attacks (vancouversun.com)

Homeowners Insurance and Personal Property

Recent studies have proven that most homeowners don’t know exactly what’s covered in their homeowners insurance policy. This is alarming considering that many of us are paying thousands annually in premium. Homeowners insurance offers coverage for three major things… the structure of your home, your contents, and liability for you and your family.

In my experience the insured’s contents, also referred to as personal property, is the biggest misconception of what’s actually covered in the event of a loss. Most homeowners policies offer 50% or more of Coverage A (the dwelling amount) in personal property coverage. For example, if your home is insured for $1,000,000 (Coverage A), your personal property limit will be $500,000 if not more depending on the carrier. However, if you closely examine your homeowners’ policy you will notice limits on certain items that you would initially assume are covered under your personal property limit.

Personal Property is really meant to cover common items in your house… furniture, clothes, appliances, etc. Items that are not so common such as jewelry, furs, fine art, collectibles, etc., have coverage limits. Other uncommon items might also include: firearms, silver, business property, and computers. The limit for such items is often $2,500 or less.

Common Example: If you’re home is broken into and you claim that $50,000 worth of jewelry was stolen, your insurance company will gladly hand you a check for $2,500 leaving you to learn the hard way of what’s actually covered and not covered in your policy. This situation will also probably lead you to searching for a new agent or broker.

Solution: The items that I mentioned that are not so common should be covered under a separate policy or scheduled in addition to your homeowners’ policy. These options are usually inexpensive and protect those items in the event of a loss.

A good broker or risk manager can help you pick a great carrier to insure your home. They can also help you decide which options are best in addition to your homeowners policy for certain items such as jewelry or collectibles. You’ve worked hard to purchase valuable items, make sure they’re covered!

Five Auto Tips That Can Make A Huge Difference…

1. Never select minimum liability limits, regardless of the year and make of your vehicle.

2. If you have more than one vehicle, always stack your underinsured and uninsured coverages.

3. If you live in a tort state, you should always select full tort.

4. If your vehicle is at least seven years old, you should consider dropping collision coverage.

5. NEVER let your auto insurance lapse. Any lapse over 30 days can result in a huge increase in premium whenever you go to get insurance.

@Imanagerisk

Welcome to yourriskmanger.

Insurance is inevitable. Those that try to avoid it usually end up paying for it in more ways than one. A good agent quotes you a reasonable premium and hopes you sign on the dotted line. Risk Managers take premium out of the equation and look to solve problems and offer real solutions. As a risk manager, I take it one step further. I educate both potential and existing clients on their insurance needs. My clients range from small business owners to high-income individuals. I work with several attorneys, accountants, financial advisors, and management groups to ensure that their clients are fully protected.

I decided to create an insurance blog to give insurance a different look, and not that frustrated “I hope I’m covered” glance when we get our renewal policy in the mail.  Lets talk insurance, better yet; lets talk risk management. Everybody has risk… let me manage yours by implementing a crafted insurance program that optimizes your success and minimizes your risk! Yourriskmanager will feature tips, good stories, horror stories, the many types and variations of insurance, when and where it’s needed, and my insight on the importance of insurance and how it affects us all. Join me!

If you need or want a second opinion on your current insurance program, simply have questions or comments, please feel free to send me an email at geoff.pope@aporleans.com, tweet me @Imanagerisk, or leave me a message below. You’re next claim could be around the corner; lets make sure you’re covered!