‘Heartbleed’ Bug Stresses
the Need for Cyber
Liability Insurance
- Page 1
Protecting Your Business
Against Employee Theft
- Page 2
Questions to Consider
Before Purchasing
Commercial Auto
Insurance - Page 3
OSHA Plans Big Increase
in Workplace Health
Inspections - Page 4
Investigators
discovered a serious
vulnerability in a
popular cryptographic
protocol commonly
used by commercial
web developers all over
the world.
To locate an office near you,
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at www.bxsi.com
or contact us at
info@bxsi.com.
Risk Monitor
MAY 2014
A Newsletter for Clients and Friends of Bancorpsouth Insurance SERVICES, INC.
‘Heartbleed’ Bug Stresses the Need
for Cyber Liability Insurance
American businesses took another hit
this spring. Investigators discovered
a serious vulnerability in a popular
cryptographic protocol commonly used
by commercial web developers all
over the world. The “Heartbleed Bug”
was nestled in the very prominent
OpenSSL cryptographic software
library and allowed cyber thieves
to steal information that both web
programmers and customers thought
was protected. The popular website
Mashable.com published an extensive
list of websites and vendors whose
systems may have been comprised
by the Heartbleed Bug. If you
do business with any company
on this list, you may want
to change your password
information.
Just a few days later, the
largest arts and crafts store in
America, Michael’s, announced that
thousands of credit card numbers had
been compromised. Aaron Brothers, a
Michael’s subsidiary, was also attacked
by highly sophisticated criminals using
malware that had not been encountered
before by their security consultant firms.
Michael’s has contained the threat and
the malware is no longer compromising
credit card numbers and expiration
dates. The attack occurred between
May 8, 2013 and January 27, 2014,
potentially affecting 2.6 million cards.
Furthermore,Florida officials are
now investigating an attack on Hess
customers who purchased gas using
their credit cards. Criminals installed
card skimmers at a number of Hess
stations in Florida.
These attacks happened shortly after a
massive leak of credit card information
at Target. The result isn’t just a risk to
customers and card-issuing banks.
Businesses who take any form of
electronic payment or keep sensitive
data must consider themselves at risk of
liability. As we saw from the Heartbleed
Bug, even the most sophisticated
businesses with large and highly skilled
internal information technology staff
were vulnerable to flaws in the coding.
Furthermore, as we see in the Hess
case, smaller firms can no longer
assume they will not be targeted by
cyber-thieves. If your business is not
insured against cyber risk, you may be
the one paying for damages caused by
cyber attacks. A recent survey showed
that 72 percent of all cyber breaches
occur at small-to-medium sized
businesses.
Liability can also come from
government sources: The Federal Trade
Commission (FTC) recently filed suit
against the Wyndham hotel chain for
failing to provide adequate security for
customers’ private information, after
the FTC dealt with the fallout of three
separate breaches in just a few years.
Cyber Liability Insurance
Fortunately, businesses can obtain
cyber liability insurance helping protect
against this potentially devastating risk.
This insurance coverage helps protects
your company against catastrophic
liability arising from cyber attacks or
other information security breaches.
continued on page 3
Welcome to the BancorpSouth Insurance
Newsletter!
It is with great satisfaction that we bring this newsletter to you. In this issue and in
coming months, we will discuss pertinent risk management topics which may affect
your organization. We sincerely hope that you will find this newsletter informative
and please do not hesitate to contact us should you have any questions or needs.
Protecting Your Business Against Employee Theft
Many business owners are aware that
employee theft numbers are rising.
However, the statistics are much more
alarming than most think. The Chamber
of Commerce reported that $50 billion
was spent annually because of fraud
and theft committed by workers. They
also reported about 20 percent of all
businesses failures are due to internal
fraud and theft. In a research report
about loss prevention, researchers
said companies could lose between
one and two percent of sales due to
employees’ internal crimes.
Employers often wonder why their
employees turn on them when they
rely on them for jobs and income. One
of the reasons may be that they feel
overwhelmed with personal debts.
For example, an employee with
tremendous credit card debt who does
not know how he or she will pay it may
be more likely to try to steal or commit
fraud. Credit card companies are also
struggling to get past consumer debt
and recently raised their required
monthly payments. Employees may be
anxious about their debts and looking
for a way to get additional cash.
Some employees harbor grudges
against employers due to premium
increases for group health coverage.
If their company is freezing pension
plans, employees could be outraged
and more employees may be willing to
steal or commit fraud.
Employee theft is a serious issue for
business owners and their bottom line.
Below are six tips for preventing and
managing employee theft.
1. Use Pre-Employment Background
Checks Wisely – Before hiring an
employee, it is always a good idea to
run a pre-employment background
check. Background checks reveal
an applicant’s past criminal history
and help you make a better hiring
decision.
2. Check Candidate References – A
good practice is to check references
especially an applicant’s former
employer or supervisor.
3. Proactively Communicate Conduct
Guidelines – While this will not
prevent employee theft, guidelines
clearly express your code of ethics
and conduct. Employers should
document the guidelines and
employees should agree to the code
of conduct each year.
Workplace (http://www.sba.gov/
community/blogs/community-blogs/
small-business-matters/6-tipspreventing-employee-theft-andfraud-wo)
4. Conduct an Audit – Conducting
regular audits can help you detect
employee theft and fraud. Audits
should be conducted every 6-12
months and assess high risk areas
such as business expense reports
and cash and sales reconciliation.
5. Recognize the Signs – Look out
for potential red flags such as an
employee not taking vacations,
being overly protective about their
workspace, unexplained debt or
change in behavior.
6. Set the Right Management Tone –
Make sure your employees know
your leaders take employee theft
seriously and encourage employees
to speak freely and share concerns
about potential violations.
You may think your commercial
property policy offers protection
from employee theft, but this is not
always the case. Commercial property
insurance generally covers most theft
types including inventory. The business
property coverage may not reimburse
you for securities and cash. For this
reason, businesses should consider
purchasing a commercial crime
policy. This type of policy typically
offers protection against employee
dishonesty, forgery, alteration, theft of
money and securities, burglary and
robbery.
Every company is a potential target for
employee theft. By maintaining strong
internal controls, your organization can
help prevent criminal and fraudulent
activity. However, internal controls
may not prevent all cases of employee
theft. Therefore, your business should
consider a crime insurance policy
to further protect your assets. For
more information about commercial
crime policies or ways to prevent
employee theft, please contact your
BancorpSouth Insurance Services
representative.
Source: 6 Tips for Preventing
Employee Theft and Fraud in the
continued from page 4 ... OSHA
Plans Big Increase in Workplace
Health Inspections
safety management, PSM covered
chemical facilities, petroleum
refinery process safety management
programs, blood borne pathogen
countermeasures and respiratory
protection protocols.
State-Level Inspections to
Decrease
OSHA is projecting fewer
inspections by state-level
occupational safety agencies, and
attributes the decline to state budget
problems. OSHA projects that the
27 state-plan agencies will perform
about 50,350 inspections, which
represents a decline of about 2
percent compared to 2012.
For more information about OSHA
compliance and workplace health
inspections, please contact your
Insurance Services representative.
Questions to Consider Before
Purchasing Commercial Auto
Insurance
One of the most important insurance
decisions for businesses is buying
commercial auto insurance. Whether
your business has one or several
vehicles, there are several important
issues to consider before choosing
a policy. The following outlines
some questions that every buyer
should consider before purchasing a
commercial auto insurance policy.
What Defines Commercial Vehicle
Usage?
While some people may not use their
vehicles frequently for commercial
reasons, personal policies still exclude
using them for commercial use. In
addition to this, every policy has a
definition of what is considered to
be commercial use. This means
policyholders must be clear about the
differences to avoid having their claims
denied.
How Many Vehicles And Drivers
Does The Company Need?
Commercial insurance coverage
has many available options and
is distinguishable by the number
of vehicles and drivers needing
insurance. If there are multiple vehicles
and drivers, fleet coverage may be the
wisest option. Rates vary depending
on how the insurance carrier calculates
the premium rate. However, the
number of vehicles and the class they
fall under both play important roles in
determining price.
What Type Of Vehicle Is Being
Leased Or Purchased?
Sports cars and luxury cars may seem
like classy statements that earn people
respect, but it is important to consider
the cost of insurance. Since insurers
look closely at the types of vehicles
chosen, selecting a mid-size sedan
with several safety features may be a
smarter option.
What Are The Drivers’ Records?
The insurance carrier closely reviews
each individual drivers’ records. If a
driver has multiple claims on their
records, this will cause premiums to
increase. It is important to be aware of
all your drivers’ current records. When
there are injuries or accidents, it is
crucial for employees to report them
immediately.
What Kind of Deductible Is
Affordable?
The amount a business is willing to pay
for a deductible affects the premium
amount. As a rule, higher deductibles
mean lower premiums, and lower
deductibles mean higher premiums.
Are There Anti-Theft And Safety
Devices In The Vehicle?
Theft is still one of the most important
concerns in urban settings. Where a
business is located and the crime rate
can have an impact on the insurance
premium. For example, places with
higher crime rates will lead to higher
premiums due to increased theft risks.
Insurance carriers consider several
items when insuring a vehicle. Below
are a few examples of vehicle features
the insurance carriers assess:
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Global Positioning System (GPS)
Theft alarms
Types of air bags
Cameras
Back-up sensors and beepers
Other safety enhancements
Will State and Federal Laws Impact
Coverage?
Specific vehicles and the types of items
they typically transport will be subject
to federal laws. In some states, they
will also be subject to additional statelevel laws. It is important to consider
legislative requirements on both
levels before purchasing insurance
to understand how they will impact
individual circumstances.
Choosing the appropriate commercial
auto insurance policy is an important
decision. You want to ensure your
vehicles are properly protected in case
of an accident. If you have questions
about insurance coverage for your
business’s vehicles, contact your
BancorpSouth Insurance Services
representative.
continued from page 1 ...
‘Heartbleed’ Bug Stresses the Need
for Cyber Liability Insurance
Cyber liability insurance policies
are designed to be affordable
and realistic even for the smallest
businesses that may be affected.
What’s covered?
Cyber liability insurance is still
evolving, but policies typically
cover one or more of the
following risks, according to the
National Association of Insurance
Commissioners:
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Liability for security or privacy
breaches including loss of
confidential information by
allowing, or failing to prevent,
unauthorized access to computer
systems
Costs associated with a privacy
breach, such as consumer
notification, customer support
and costs of providing credit
monitoring services to affected
consumers
Costs associated with restoring,
updating or replacing business
assets stored electronically
Business interruption and extra
expense related to a security or
privacy breach
Liability associated with libel,
slander, copyright infringement,
product disparagement or
reputational damage to others
when the allegations involve a
business website, social media or
print media
Expenses related to cyber
extortion or cyber terrorism
Coverage for expenses related to
regulatory compliance for billing
errors, physician self-referral
proceedings and emergency
medical treatment and active labor
act proceedings
One size does not fit all. It’s crucial
to look at specific policy language
as well as the premium, and choose
the policy that best fits your overall
risk management strategy and
liability exposure. Contact your
BancorpSouth Insurance Services
representative to learn more about
cyber liability insurance.
OSHA Plans Big Increase in Workplace
Health Inspections
The latest federal budget fully funded
all requested enforcement activities of
the Occupational Safety and Health
Administration (OSHA), the federal
agency responsible for monitoring and
enforcing workplace safety standards.
OSHA has also announced that while
it is expanding its enforcement efforts
in certain industries, and substantially
expanding its workplace health
inspection program, some types of site
inspections will see reductions. These
include safety inspections and state
level inspections.
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Falling
Electrocution
‘Struck-by’ accidents
‘Caught in between’ accidents
OSHA also plans to increase scrutiny
of these kinds of worksites:
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Refineries
Excavation and trenching
Primary metal industries
Sites that contain isocyanates
Hazardous machinery
Nursing and care homes
Combustible dust
Shipbreaking
Worksites that include crystalline
silica
Worksites that contain lead
Worksites that contain hexavalent
chromium
Specifically, the new budget allocates
$552.2 million to OSHA, and $208
million specifically to support
enforcement activities representing an
overall OSHA enforcement activities
budget increase of $17 million from the
prior year.
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OSHA indicated it will target
enforcement issues on more
dangerous industries, focusing on
preventing the most common causes
of workplace fatalities including:
As part of this effort, OSHA plans
to conduct nearly 40,000 site
inspections during the 2014 fiscal
year. According to the agency, 31,400
of total inspections will be safety
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inspections and 7,850 will be health
inspections. Overall, OSHA plans to
conduct 450 more health inspections
in the 2014 fiscal year than it did
during the previous fiscal year, but
fewer inspections overall, according to
reporting from the Society for Human
Resource Management. OSHA is
projecting it will conduct 2,200 fewer
safety inspections than last year.
OSHA states the reason for the
overall fewer safety inspections is
man-hour allocation issues. Some
site inspections are much more labor
intensive than others, and therefore
much more costly to perform.
OSHA’s force of compliance officers
are likely to increase scrutiny not just
on simple fixes, but conducting
more involved compliance
checks, such as process
Information contained in this newsletter about product offerings, services, or benefits is illustrative and general in description, and is not intended to be relied on as complete
information. While every attempt is made to ensure the accuracy of the information provided, we do not warranty the accuracy of the information. Therefore, information should
be relied upon only when coordinated with professional tax and legal advice.
BancorpSouth Insurance Services is powered by BancorpSouth Bank; a wholly-owned
subsidiary of BancorpSouth Inc., a $13.4 billion-financial holding company based in Tupelo,
Mississippi. BancorpSouth Insurance Services is annually ranked as one of the nation’s
largest brokers by Business Insurance magazine. Equipped to service clients across the globe
through our Worldwide Broker Network relationship, we have over 30 offices with almost
600 insurance and risk management professionals ready to serve.
Risk Monitor