Not Quite Enough: General Liability Insufficient for Cyber Coverage

Take a look at your business’ general liability insurance policy, and you’ll probably see a reference to property damage.  To the uninitiated, that sounds like it covers a multitude of potential events – even an online hack or attack, right?

Wrong.  Seriously wrong.

Cyber liability insurance is not automatically included in a general liability policy.  Cyber liability insurance, priced and purchased as its own policy, can pay for expenses if a small business suffers a data breach or malicious software attack, including customer notification, credit monitoring, legal fees, and fines.

According to Insureon.com, when criminals infiltrate a network, steal data, or hold data hostage, the business they steal from could be held liable. A data breach at a small business can end up costing thousands of dollars in customer notification expenses, legal fees, and fines or settlements.  In fact, the average cost of a small business data breach is $86,500, according to the Internet security firm Kaspersky Labs. The coverage included in cyber liability insurance pays these costs, allowing your company to survive a breach.

And don’t assume that hackers won’t come after small businesses.  A recent report by Verizon found that 61% of all cyberattacks hit small businesses, and that those attacks often succeed because small businesses are less likely to have a strong defense.

Cyber liability insurance is key for companies that handle sensitive information, work in the cloud, operate in cybersecurity, or typically handle:.

  • Credit card or bank account information
  • Medical information
  • Social Security or driver license numbers
  • Customer names, email addresses, phone numbers, and addresses
  • Cybersecurity for other businesses

Contact the professionals at The Reschini Group to learn more about fashioning an appropriate cyber liability insurance package for your business.  Your existing general liability policy may not be quite enough.


Copyright 2020 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.

 

Showing Your Cards: Insisting on Pre-Employment Physicals

Poker has always been a game more reliant on intent and projection than on the actual collection of cards in a given player’s hand.  That’s what makes it a gamble.

But if a player would show his or her hand before the betting and calls began, all of the excitement and tension would immediately disappear. The gamble would be over.  The outcome would be immediately known.  Safe and predictable.

To apply this example to the operation of a business, unlike a poker game, no one wants to gamble with outcomes.  The idea of a safe, predictable set of facts and conditions sounds perfect.  So let’s not hide the cards we hold.  Let’s show them all, right up front.

One of the best ways any business can pursue this strategy comes in the form of conducting pre-employment physicals, performed by a licensed physician, to determine a candidate’s physical fitness for the job an employer wants to fill.

Sounds so obvious and logical, right?  But not every employer insists on this simple process – or they bring candidates on before the process has been completed – and in either case, the consequences can be costly, embarrassing, and damaging to short- and long-term profitability.

For example, say a company hires and places a group of new employees into its field operations before receiving the results of their physicals.  One of the new recruits suffers an injury almost immediately.  The physical may have given the employer enough information to keep this person from a job with conditions that he was not capable of safely executing.

It’s imperative to remember that you as the employer are responsible for whatever physical conditions are present among your employees.  That means in the example that the employer was on the hook for medical costs and recovery programs for the injured employee – all of which might have been easily avoided by not rushing the person into an inappropriate role.

A pre-employment physical examination helps to guarantee the employer of a lower rate of absenteeism due to sickness, injuries, or occupational hazard.  It also helps avoid workers compensation issues, lost production, and higher operational costs.

In short, the benefits far outweigh the costs.  Show all your cards right up front and take the gamble out of operating your business by conducting and abiding by pre-employment physicals for all new hires.  Contact the professionals at The Reschini Group to learn more.


Copyright 2020 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.

Touchpoint: Preparing a Summary Plan Description (SPD)

Benefits packages represent a two-edged sword – they’re incredibly important in providing for and protecting yourself and your family, while they also can be rather challenging to read and fully understand.

That’s why the U.S. Department of Labor requires employers to provide each employee with a Summary Plan Description (SPD).  This key compliance document for virtually every Employee Retirement Income Security Act (ERISA) plan “is the primary vehicle for informing participants and beneficiaries about their rights and benefits under the employee benefit plans in which they participate,” according to the DOL.

The SPD must be written so as to be understood by the average plan participant and must be sufficiently comprehensive to inform participants about their rights and obligations under the plan. Also, ERISA and underlying DOL regulations include strict requirements for the content and delivery of SPDs.

The SPD must be automatically distributed to plan participants by certain deadlines. It also must be provided upon a participant’s request. The SPD must include specific types of information, such as the plan’s eligibility rules.  Virtually all group health plans subject to ERISA must provide participants with an SPD, regardless of size.

ERISA does not require that a plan document be in any particular format. However, the plan document must address:

  • Benefits and eligibility;
  • Funding of benefits;
  • Procedures for allocating and delegating plan responsibilities;
  • Plan amendment and termination procedures;
  • Designation of named fiduciary; and
  • Required provisions for group health plans, such as COBRA rights and HIPAA compliance.

ERISA does not require plan administrators to provide a new SPD booklet every year. An updated SPD must be provided every five years if material modifications are made to the SPD’s information during that time period. If no changes are made, then an updated SPD must be provided every 10 years.  It is typical, however, for plan design changes to be made each year, particularly for group health plans.

A “wrap” document supplements existing documentation to fill in the missing ERISA-required provisions. When a wrap document is used, the ERISA plan document comprises two pieces: 1) the insurance certificate or benefits booklet; and 2) the wrap document itself.

Employers who fail to prepare an SPD may face serious penalties.  Contact the Benefits team at The Reschini Group to learn more and to set up a meeting.

Copyright 2020 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.