A Business Survival Issue: Cyber Security Coverage

Cybersecurity has crossed from being an IT issue to being a business issue, and 2018 promises to see a significant ratcheting up of cybersecurity coverage as a result.

The growing cyber threat and stricter cybersecurity regulations will boost the growth of cyber insurance policies this year, according to industry sources.  According to NetDiligence, whose data is based on actual cyber insurance claims, the average cost of a cyber breach in 2017 was $349,000 for small companies, reaching an average cost $5.9 million for major organizations.

As senior decision-makers understand the level of financial exposure, cyber insurance will need to answer the call more and more.  Allianz predicts that global cyber insurance premiums will grow to $20 billion by 2025, up from around $4 billion currently.

According to a 2017 Ponemon Institute survey, while 87% of companies view cyber liability as one of their top 10 business risks, only 24% admit to having cyber insurance.  That may be due to a lack of clarity about how this coverage works.  Cyber insurance differs from auto or home insurance, where the risks are known and the products haven’t changed that much. It is much more complex and potentially more dangerous than traditional risk.

Organizations need to demonstrate that they have followed best practices to protect consumers and employees. They will also need to shift their approach to cyber-risk management, with a focus on accountability, to identify their threats and insurance needs through a deep technical diagnostic linked to realistic business impact.

The team at The Reschini Group is here to help you assess your need, and assemble the most cost-effective package, for increased cyber coverage to meet your particular situation.

Because it’s not just an IT issue any longer.  Protecting your cyber security is now a front-and-center business survival issue.


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.

[Source: https://www.rheagroup.com/news/demand-cyber-insurance-will-surge-2018]

Checking the List: Dependent Eligibility Audits

Relationships can shift.  Family structures can change.  Yet what happens when those new alignments do not align with the listing of eligible dependents on a benefits policy?  Problems.  Most of them financial.

Employers are continuously looking for ways to better control medical costs, and one option includes ensuring that everyone listed on the health plan is actually still eligible to receive those benefits.  A dependent eligibility audit can take care of this.

While a major advantage to performing such an audit is to hold down costs, another comes via the fact that plan administrators have a fiduciary duty to administer the plan in accordance with the plan documents, which means that only eligible dependents should receive benefits.  It may even be possible to recover amounts already paid.

When an employee and his or her spouse have recently divorced, for example, the spouse is no longer eligible for benefits – a fact that can often get overlooked.  Most employees who add an ineligible dependent do so unwittingly, through a lack of understanding of what defines an eligible dependent.  Nieces, nephews, and siblings fall into the category of ineligible dependents.

It remains the employer’s responsibility to clearly define eligible dependents, and to make sure that definition is applied among all contracts and the benefits plan document.  Employers should ensure that dependents of new employees are eligible as they are added to the plan.

Some employees may view audits negatively, assuming that their employer is trying to kick some people off of the plan.  The reality, however, is that dependent eligibility audits help employers do what’s best for the plan in the long-term – increasing coverage and controlling the cost of premiums for everyone.

The benefits team at The Reschini Group can offer insight and guidance on dependent eligibility audits and other benefits-related subjects.


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.

[Source: https://www.employeebenefitadviser.com/news/why-dependent-eligibility-audits-are-increasingly-important-for-employers]

Life Happens: Business Interruption Coverage

When one thinks of “standard” insurance, it’s for damage or loss of property.  Furniture destroyed by a fire, stolen equipment, building damage from a violent storm.  You buy this insurance to help recoup the cost of rebuilding or replacing that property, right?

But life happens.  The unexpected arrives with unexpected consequences.  Such as, losses resulting from a business not being able to operate due to property damage.  That’s a different level of coverage know as business interruption, or business income, insurance.

When a business is shut down due to a damaging event, revenue slows down or ceases entirely.  But, at the same time, the financial obligations of the business continue as before, plus any additional expenses as a result of the disruption.  With business interruption coverage, many of these costs and losses can be reimbursed. According to the Insurance Information Institute, business interruption insurance will cover: revenue lost due to the closure; fixed expenses, such as rent and utility costs; and expenses of operating from a temporary location.

Determining a business interruption loss involves establishing what the business would have earned had the loss not occurred.  Insurance companies take into account past tax returns, profit and loss statements, projected sales and non-continuing expenses.  Business interruption coverage is not sold as a stand-alone policy. It can be obtained as part of the following types of policies:

  • Commercial property insurance—You can add an endorsement or rider to commercial property insurance that will extend the policy’s coverage to business interruption losses.
  • Business owners policy (BOP)—Intended for small businesses, this type of insurance package policy includes property, liability and business interruption coverage.
  • Commercial package policy (CPP)—CPPs are flexible policies that can be customized with a range of options, including business interruption coverage.

Time limits apply to business interruption coverage, so be sure to discuss limitations and exceptions with your insurer or insurance professional, and whether purchasing extended business income coverage is a good option for your business.  The professionals at The Reschini Group are experts in these options, and can help you determine the right business interruption coverage for your unique situation.


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.

[Source: https://www.iii.org/article/covering-losses-with-business-interruption-insurance]

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.