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]