Ben Beeson with Lockton’s Global Technology and Privacy Practice recently spoke with Leader’s Edge magazine about the increasing challenges of data privacy in healthcare.
A recent ruling by the U.S. Department of Health and Human Services established very stringent security and privacy policies, including the requirement to notify individuals of a breach of their personal healthcare information.
Beeson discusses what this means to covered entities, their business associates, and the boardroom.
Read the full story in Leader’s Edge.
Downloaded apps can expose corporate networks
With increasing numbers of employees bringing their own devices to work for cost efficiency reasons, IT departments are finding they have less control over apps that are downloaded and used in the workplace. No app is entirely secure, with social media apps being most often breached. These mixed-use devices expose a corporate network to a host of vulnerabilities.
I was recently interviewed for a story in Property Casualty 360° where I outline the risks associated with the top 10 apps most often downloaded by employees.
Read the story here.
Lockton offers a range of cyber risk management and insurance services, including technology errors and omissions, media liability, data protection, and cyber liability coverage.
The looming specter of sequestration has U.S. Federal Government Contractors scrambling to warn employees of impending furloughs and layoffs, reforecasting revenue projections against any one of a number of budget cut scenarios and cautiously advising key stakeholders and/or shareholders about the negative impact to company earnings if the March 1 deadline comes and goes without a deal from Washington. What is commonly being discussed inside and outside the Beltway is the material impact to Government Contractors’ revenues. However, there are other risk management issues that should attract attention as potential threats to an organization’s bottom line.
Employees fearing that their paychecks are going to be seriously impacted by potential furloughs or mass layoffs could see Workers Compensation as a way to continue their current salary tax-free. Much in the same way that we advise our clients to be especially vigilant of suspicious lost-time claims during plant closures or large reductions in force (RIF), we strongly recommend that risk managers treat the uncertainty of sequestration in the same manner. Clients, their brokers and insurers should monitor all new lost-time Workers Compensation claims with increased scrutiny on non-accident, soft tissue, repetitive motion and cumulative trauma losses.
Employment Practices Liability
The loss of future contracts or premature termination due to unavailability of funds almost certainly means furloughs or layoffs. To be safe, some of the larger Defense Contractors have sent WARN notices to thousands of employees in an effort to thwart potential fines and penalties, as well as inhibit wrongful termination litigation. All companies impacted by sequestration should discuss with their brokers whether to approach their insurers with proactive staff reductions.
Crime (Employee Dishonesty)
All employers would like to believe that they hire the most trustworthy and reputable employees. However, when faced with a loss of work through key contracts, companies should be keenly aware of the possibility of money or assets walking out the door.
While not necessarily insurable, organizations should consider that these uncertain times might also mean a loss of key research and development and intellectual property. Work in progress on a contract likely to be terminated could be at risk of leaving with those key employees, as they take valuable trade secrets and other intellectual property to a competitor or into the commercial sector. In addition to the old-fashioned method of stealing intellectual capital, reduction of revenues could force some companies to be less vigilant when it comes to network security. Competitors, nation states and terrorist organizations could take advantage of the increased vulnerability resulting from these budget cuts.
Minimum Earned Premiums
Although not a material risk to Government Contractors, minimum earned premiums should be discussed in light of what might be material reductions in revenues, total insurable values and payroll as a byproduct of sequestration. Companies should review their insurance program with their brokers to better understand which policies might be subject to minimum premiums despite material reductions in exposure.
The full brunt of sequestration might be averted, but most experts agree that budget cuts are a certainty. A strong proactive approach by risk managers and their brokers to address any or all of the aforementioned issues would go a long way toward mitigating any material impact to the organization.
See this related Post:
During his State of the Union address to the Congress on February 12, 2013 President Barack Obama announced that he had issued an executive order entitled “Improving Critical Infrastructure Cybersecurity.” The order is intended to promote the sharing of cybersecurity information held by the federal government with critical infrastructure companies, to develop a framework for reducing cyber risks, and to encourage companies to comply with the framework. The order could have significant consequences for the companies affected by it.
Read on to learn more.
U.S. Homeland Security officials have identified cybersecurity and insurance as a critical issue for businesses and the public sector, and is providing help to secure cyber networks from attack.
As part of this effort, the Department of Homeland Security hosted its first-ever cybersecurity insurance workshop in 2012 with officials from U.S. government agencies and regulators, private industry, academics, IT security professionals, and the insurance industry. They discussed cyber insurance and its role in protecting the critical infrastructure of the U.S., as well as the limitations of private insurance, reasons for these limitations, and potential ideas for continuing discussion with all the key stakeholders.
Lockton’s Emily Freeman was a featured speaker at the conference, providing a market overview and highlighting some of the key challenges in cyber liability insurance.
See the full report from the Cybersecurity Insurance Workshop. Emily’s insight on the market begin on page 7.
The report provides an in-depth look at the cybersecurity insurance market and insights about the problems ahead for insurers, security professionals, companies, and the public sector.