The Enemy Within: Understanding Fidelity Insurance

It’s the root of all evil, so they say.  And when a person feels he or she has the inside track on how to siphon off some of that money for himself or herself, it surely spells trouble.

Employees and staff support personnel, when hired, are supposed to be loyal to the employer.  They are called on to demonstrate fidelity to the company or organization, in other words.

But occasionally, those employees find that they are not immune to the temptation of taking a little off the top.  The boss will never miss it, they rationalize.  Embezzlement like this can occur in the most unlikely situations, too.  The nice lady who runs the church office.  The 25-year company vice president.  The campaign manager.  They have violated the expectation of fidelity.

The lure of easy money is probably as old as the concept of money itself.  Obviously, that never makes it right or even excusable.  Knowing that it may happen to any organization at any time, however, means establishing the proper protections and recovery options.

Fidelity insurance protects business owners against just such dishonest employees. Companies that allow certain employees access to confidential information, such as financial institutions, benefit from obtaining fidelity insurance. Fidelity insurance covers unauthorized activities on the part of employees, asset protection, external fraud and technology risks.

Fidelity insurance is also called bonding because the fidelity bond reimburses the business owner for damages caused by dishonest employees. For instance, cashiers, bank tellers, corporate officers and directors are generally covered under the employer’s fidelity insurance.

Seemingly easily planned fraud can present a tempting opportunity for those within an organization.  Getting educated about this possibility and putting fidelity insurance stopgaps in place improves your odds in keeping that activity out of your organization.

The objective, experienced, and capable assistance of the team at The Reschini Group can bring your organization the expertise needed to assess the likelihood of fraud and embezzlement to occur, along with ideas on how to both prevent it and to obtain the proper coverage should it take place.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Rx for Savings: Keeping Prescription Costs Low

One of the most significant costs when it comes to health care benefits comes in the form of prescription drug coverage.  By being a wise health care consumer, however, you may be able to reduce your prescription drug costs by a significant margin.

There are a number of ways to keep those costs as low as possible.  Here are a few suggestions:

  1. Shop around at local pharmacies to find the best price on your prescription. Costs can vary a great deal from one pharmacy to the next, so it’s worth the effort to comparison shop.
  1. Be sure to ask your physician about generic or over-the-counter drug alternatives to substitute for brand-name drugs. Make sure, of course, that the ingredients and the  benefits of any generics will be the same as the brand-name option.
  1. Look into discount prescription programs for senior citizens, members of the military, or other demographic groups of which you may be a part.
  1. Investigate using bulk prescription refills. This option, where you receive up to a 90-day supply of a specific prescription by mail, is most applicable to drugs that you may require for an ongoing medical condition.

As with any other part of your health care benefits, it’s important when it comes to your prescription drugs to learn to ask questions, make comparisons, and choose the options that are right for your unique situation.

The Benefits team at The Reschini Group is here to help you with any aspect of your benefits package.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Ransomware Insurance: Protection from Extortion Damages

Extortion is a nasty business.  It can be performed all too easily, though, if one is well-versed in the dark online arts.

Ransomware is a type of malicious software that cyber criminals use to extort money from organizations all over the world. The cyber attacker injects ransomware into a victim’s computer network, when a user opens an infected email attachment or clicks a link on an infected website.  Once on the user’s computer, the ransomware receives an encryption key from the criminal’s Command & Control (C&C) server, which it uses to encrypt files.

The encryption then blocks user access to files the organization needs. In many cases, ransomware also quickly spreads to other computers on the network, where it finds more files to encrypt. After ransomware locks the files, it posts a note that tells the victim how to pay a ransom to the attacker.

When the victim pays, the cyber criminal’s C&C server tells the ransomware to unlock the victim’s files. The victim can then resume normal operations. However, some ransomware does not decrypt files after a victim pays the ransom, leaving the victimized organization crippled.

Ransomware is becoming very popular with cyber criminals because it can attack any business in the world and is relatively simple to create and use. This was the case with WannaCry ransomware in 2017, which quickly impacted more than 200,000 computers in 150 countries.

One element of a comprehensive strategy to address data security is customized cyber risk insurance. Organizations should carefully review their existing liability policies, such as kidnap and ransom policies, and consider stand-alone cyber risk coverage.

Most cyber insurance policies are modular, which means an organization has a menu of coverages to choose, such as business interruption, third party liability for privacy breaches and first party coverage for an organization’s own costs to detect, stop, investigate and remediate a network security incident.

The experts at The Reschini Group can help you determine the need for ransomware insurance as part of a total cyber security package.  Extortion is a nasty business, but protection can be provided to control the impact on your organization.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Clear and Credible: Developing a Benefits Communication Program

Employee benefits represent roughly a third of the typical individual’s total compensation package, so it’s in everyone’s interest that the terms, guidelines, and options inherent in those benefits are communicated clearly and with credibility.

That’s the rationale for developing a well-crafted, consistently executed benefits communication program.  Achieving this can take time and careful planning.  Here are some tips and best practices to streamline the path to success:

  • Know what benefits your organization provides and how they work.
  • Ask how your employees feel about your benefit program.
  • Keep employees and beneficiaries informed of changes to their benefits, and explain confusing terms and features of the plans.
  • Determine a communications plan and timeline, as well as who will prepare your benefit communications and the costs involved.
  • Decide what type of communication will be most appropriate for relaying messages to employees.
  • Sell your communication plan to your manager by determining HR and other benefit staff productivity loss due to employee confusion about their benefits.
  • Set measurable objectives for how much money and time your communications will save.
  • Prioritize compliance with government regulations and clarification of complicated issues, procedures and terms.
  • Prepare and distribute communications to fit corporate objectives and employee needs.
  • Target segments of employees who would profit most from specific features of a benefit by sending tailored communications.
  • Evaluate the effectiveness of your benefits communications through employee surveys and revise as warranted.

The time and resources devoted to researching, building, and following through on a solid benefits communication plan can prevent confusion, delays, lost productivity, and even bottom-line financial results.  It is well worth the effort and can yield important returns to your organization.

The Benefits team at The Reschini Group has more information on this subject and is ready to help your business benefit from an effective benefits communication plan.


Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Getting Personal: Insuring Fiduciary Responsibilities

Being asked to serve on a board or to help manage a company can be a very rewarding experience.  Challenges will come, of course, as will moments of success and victory.  Yet the wise leader will always make sure he or she is protected from damage or loss, and in this case, that can take the form of fiduciary-related lawsuits.

Fiduciary liability insurance helps to protect the personal assets of company fiduciaries, as well as the financial assets of the company and employee benefit plans against lawsuits.  This specialized area of insurance also pays for legal defense and may include provisions for the insurer to provide expert legal counsel.

Employers are increasingly being held accountable for the benefits options they offer employees.  Under the Employee Retirement Income Security Act of 1974 (ERISA), fiduciaries can be held personally liable for losses to a benefit plan incurred as a result of their alleged errors or omissions or breach of their fiduciary duties.

Allegations made in fiduciary liability claims may include:

  • Denial or change of benefits.
  • Administrative error.
  • Improper advice or counsel.
  • Wrongful termination of plan.
  • Failure to adequately fund a plan.
  • Conflict of interest.
  • Imprudent investment of assets or lack of investment diversity.
  • Imprudent choice of insurance company, mutual fund, or third-party service provider.

Some leaders of privately held companies may not believe that retirees would sue their companies, and they may be right.  But playing those odds would indeed be a gamble, since fiduciaries without adequate fiduciary liability insurance coverage may be forced to pay out of their own pocket for lawsuit defense costs, judgments, and settlements.

The team of experts at The Reschini Group can advise you on exposure and the proper insurance to cover your fiduciary responsibilities.

Because you don’t want a situation like this to get personal.


Copyright 2017 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

No Immunity Against Cyber Attacks

The greatest deception is the one we play on ourselves.  That could never happen here, right?  I’m too small for anyone to bother hassling with me, don’t you think?  But that same self-deception opens the door to individuals and organizations that, in fact, look for ways to steal, cheat, and do harm.

And the area of cybersecurity – especially for small businesses – has emerged as the place where so much of this harm is being done, and on a regular basis.

Recent surveys sponsored in part by the National Cybersecurity Authority found that most U.S. small businesses lack a formal Internet security policy, only about half have rudimentary cybersecurity measures in place, roughly one-quarter have outside experts test their systems for hacker-resistance, and an alarming 40 percent do not back up data in more than one location.  Yet 85 percent of small business owners believe their organizations are safe from hackers, viruses, malware, and data breaches.

The harsh truth, however, remains that hackers look for the path of least resistance.  The massive credit card information theft affecting Target department stores began by a single hacker getting into a small subcontractor’s computer systems.  Small businesses – and those that neglect cybersecurity threats – represent a path to much larger targets, and therefore exist as attractive targets themselves.

Cost concerns do not have to preclude taking some sensible, cost-effective precautions.  The Federal Communications Commission recommends the following steps be taken among small business owners:

  • Train employees in cybersecurity principles.
  • Install and update anti-virus and anti-spyware on every computer.
  • Use a firewall for your Internet connection.
  • Download software updates as they become available.
  • Make backup copies of important data.
  • Control access to computers and network components.
  • Secure your wi-fi networks.
  • Require individual user accounts for each employee.
  • Limit employee access to data and limit authority to install software.
  • Regularly change passwords.

Don’t fool yourself that it can’t happen to you, because it can.  Cybersecurity must rise to the top of your priority list, to safeguard your company’s critical information.  The Reschini Group can work with you to determine a proper protection strategy, and our experts are here to help.

Here are some additional resources that may be beneficial:

More About Cybersecurity

Read The Reschini Blog: Protecting Yourself from Online Data Breaches

Read The Reschini Blog: Guiding Parameters for Preparedness in Cybersecurity

Get: Cyber Risk Exposure scorecard

Get: Cybersecurity for Small Business

Get: Cybersecurity for Healthcare Organizations


Copyright 2017 The Reschini Group

 The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Reschini Buying Evergreen Insurance

The Reschini Group Buying Majority Ownership of Evergreen Insurance from S&T Bank

Company will Continue Operations Under Evergreen Name

INDIANA, Pa., November 15, 2017 – S&T Bank, a full-service financial institution with assets of $7.2 billion, and locations in Pennsylvania, Ohio, and New York, announced today that it is selling majority ownership of S&T Evergreen Insurance (Evergreen) to The Reschini Group (Reschini). Evergreen Insurance will begin independent operation on January 1, 2018 with no change to its locations. S&T and Reschini have a long history of doing business together and S&T will serve as an ongoing referral source to Evergreen.

“The strengths of Evergreen and The Reschini Group complement each other, and the customers of both companies will benefit from working together,” said Joe Reschini, president of The Reschini Group. “Our two organizations have similar missions as well as a philosophy of customer advocacy and strong carrier relationships, which are advantages for both Evergreen and Reschini.”

“We are excited to announce our strategic partnership with The Reschini Group, as they share a common vision on serving our clients,” said Todd D. Brice, president and CEO of S&T Bank. “The Reschini Group is well regarded in the insurance industry. This partnership will provide additional resources to meet our customers’ growing insurance needs.”

Evergreen Insurance has locations in Altoona, Brookville, Ebensburg, Greensburg and Indiana. The Reschini Group is headquartered in Indiana, Pa. and has a location in Pittsburgh.


 

Focus: Cybersecurity

 

Periodically, The Reschini Group will focus on a particular topic related to Risk Management or Property and Casualty issues. This month, we focus on Cybersecurity. Read on, and be sure to check out the resources available through the links.

Worth the Investment: Defining Cybersecurity Insurance

Insurance coverage is meant to protect one’s assets in the event of theft, damage, or disruption.  When your online information gets hacked, all three factors come into play.  So why not carry insurance to protect yourself from this potential disaster?

Cybersecurity insurance does just that.  The U.S. Department of Homeland Security defines it as follows:

“Cybersecurity insurance is designed to mitigate losses from a variety of cyber incidents, including data breaches, business interruption, and network damage. A robust cybersecurity insurance market could help reduce the number of successful cyber attacks by: (1) promoting the adoption of preventative measures in return for more coverage; and (2) encouraging the implementation of best practices by basing premiums on an insured’s level of self-protection. Many companies forego available policies, however, citing as rationales the perceived high cost of those policies, confusion about what they cover, and uncertainty that their organizations will suffer a cyber attack. In recent years, the Department of Homeland Security National Protection and Programs Directorate (NPPD) has engaged key stakeholders to address this emerging cyber risk area.”

The 2017 Cost of Data Breach Study, conducted by the Identity Theft Resource Center, has stated that:

  • The overall cost per data breach worldwide decreased from $4 million to $3.62 million over the past year, but those same costs increased in the U.S. by 5 percent, to $7.35 million per data breach.
  • Having an incident response team reduced the cost of a data breach by nearly $1 million.
  • Health care is the most costly industry for data breaches, costing organizations $380 per compromised record.

Having a cybersecurity protocol, backed by the proper level of insurance coverage, is not only smart business – it could keep your business from disappearing altogether.  The National Cybersecurity Alliance reported that nearly 60 percent of small businesses victimized by cyber attack closed permanently within six months.  Putting the right protection in place is not difficult, and can be achieved more cost-effectively than might be assumed.

Fitch Ratings said that cybersecurity insurance policies in the U.S. have risen by 35 percent, reflecting a growing awareness and appreciation of the risks and how to reduce them.  The cybersecurity insurance specialists at The Reschini Group can work with you to help safeguard your organization in the same way.

More About Cybersecurity

Read The Reschini Blog: Protecting Yourself from Online Data Breaches

Read The Reschini Blog: Guiding Parameters for Preparedness in Cybersecurity

Get: Cyber Risk Exposure scorecard

Get: Cybersecurity for Small Business

Get: Cybersecurity for Healthcare Organizations


Copyright 2017 The Reschini Group

 The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

On the Same Team: Serving as Client Advocates

By Mike Drew, The Reschini Group

Mistakes, they say, offer avenues to enlightenment and growth.  They also very often lead to insurance claims of one sort or another.  The claims process can go relatively simply and quickly, or arduously and lengthy, as competing interests vie for advantage and financial objectives.  Wouldn’t it be great to have an advocate, familiar with the intricacies and inner-workings of the insurance industry, at your side?

Often, insurance brokers report claims but provide no management support to maximize the efficacy of insurance dollars, and no advocacy in defense of a claim when a carrier denies coverage.  These brokers are happy to renew your coverage but maintain minimal involvement until the next renewal.

Conversely, other insurance brokers bring decades of underwriting and analytics experience to report your claims to the appropriate insurance company, proactively manage the data, and advocate for you when necessary.  Such value-added service costs you nothing and provides peace of mind that insurance carriers will meet contractual obligations requirements. The results can have a direct and positive effect on your bottom line.

As part of the normal course of business, the professionals at The Reschini Group manage our customers’ claims by careful collection and analysis of their loss data.  This approach creates an active, functional tool from which we can present options to determine the best program structure for your business. Our Claims Team reviews and analyzes coverage opinions and reservation of rights letters issued by your carriers. If pushback is warranted, and you authorize us to do so, we will attempt to convince the carrier to reconsider and, ultimately, to reverse any adverse decision we feel is not sound. Although we cannot legally represent you, we can parallel our efforts with your attorneys and supply any necessary support in order that your rights are protected at a high level.

People learn from their mistakes.  That’s human nature.  But when mistakes result in insurance claims, you should have a knowledgeable advocate on your side, to protect your interests.  Contact our team at The Reschini Group for more information on this important aspect of your coverage.


Copyright 2017 The Reschini Group

 The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Peace of Mind: Offering Critical Illness Benefits to Employees

Normal medical and disability insurance plans do not always cover the potentially significant expenses related to critical injury or illness, with costs accumulating especially during the recovery process. That’s why offering critical illness insurance can play an important role in strengthening the financial safety net for employees.

With a growing share of the population having limited savings, employees may have a large financial exposure in the event of a critical illness. Beyond traditional medical costs, financial challenges may also result from:

  • Traveling expenses related to treatment
  • Lost wages from taking time to care for a critically ill relative
  • Out-of-network treatment charges
  • Alternative treatment charges

Critical illness insurance coverage provides a lump sum benefit for the six leading illnesses and health events:

  • Cancer
  • Heart attack
  • Stroke
  • Major organ transplant
  • Kidney failure
  • Coronary artery bypass graft

Offering critical illness coverage complements high deductible health plans (HDHPs) by eliminating the worry of having to pay for a high deductible in the middle of suffering a major illness.  It also serves as an affordable way to fill a gap in coverage.

Employees can reduce their financial risks in the event that serious illness occurs, while also offering the benefit as a recruiting tool or as a way to compensate for changes in core medical plans.  Employers can offer a wellness benefit option under a critical illness plan that reimburses an employee each year for having certain tests and routine exams done, as well.

Most important, offering this coverage can help blunt the devastating impact critical illness can have on employees, both in terms of health and finances.  Contact the Benefits team at The Reschini Group for more information on critical illness insurance.


Copyright 2017 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.