Understanding Your Insurance
Coverage
What to Look For
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
House Keeping
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Emergency Exits
Bathrooms
Break
Cell Phones
Presentation Structure
Lunch/Individual Questions
Presentation/Resources on website
Questions
Learning Objectives
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Business Income Extra Expense
Understanding Flood Coverage
Cyber Liability – What to look for
Director’s & Officer’s Coverage
– How it interacts with general liability
• Risk Management Latest Trends
• Right to risk- current litigation topics
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
Emergency Vacating
• Different policies will vary in what’s
covered
– Broadest Coverage “imminent danger”
– Not required to wait for mandatory evacuation
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
– http://www.floodsmart.gov/floodsmart/pages/index.jsp
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
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
Exposures
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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
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
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
Additional Coverage to Look For
• On & Off Premises
– Some only cover breaches on your premises
• Security & Privacy Liability
– Pays damages to 3rd 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
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
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
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
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
Risk Management
• Not just safety
• Art or Science?
• Protecting your assets while enhancing
operational efficiencies
• Assets
– People you serve, property, employees
Risk Management
• Classes
– Economic
• Marketplace
– Legal
• Compliance
– Political
• Process
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Identification
Analysis
Control
Finance
Administration
• Law/Policy
– Social
• PR – Reputation
– Physical
– Juridical
• Jury Attitudes/Venue
– Continuous process:
• Mitigating one exposure
may bring about
exposures in other areas
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
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
• 1st fine assessed for < 500 record breach
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
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
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)
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)
GPS
• Benefits
– Logistical Location
– Eye in the Sky
– Route Optimization
• Savings
– Fuel
– Time/Prodctivity
– Insurance
• Not immediate
(investment)
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
Business Continuity & Emergency
Planning
• Don’t 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
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
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
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