US Working Toward Standardized Penalties for Data Breaches

Last month the US Senate’s Judiciary Committee approved three bills that deal with data breaches.  Those three bills where, The Personal Data Privacy and Security Act of 2011, The Personal Data Protection and Breach Accountability Act of 2011 and the Data Breach Notification Act of 2011.  The gist of all these acts is that the government is working toward a standardized practice of requiring notification of data breaches and a standardization of penalties for companies that have data breaches.  What this means for business is that it is now very important for you to take as many precautions as you can to secure your clients’ private data.  Firewalls, antivirus software, IT consultants, encryptions, company internet usage policies and password protections are all key parts of securing your business for data breaches. 

Even if all the preventative measures are in place, your business still runs that risk of a data breach.  That is where insurance products can help protect your business.  Insurance products can’t help protect your data but they can protect your company’s money by helping pay for data breach notification costs, third party lawsuits filed against your company for breach of client’s personal information and the cost to restore lost data.

As the government moves to a more standardized notification requirement and penalties for data breaches, companies that hold private information should also be working toward setting up strong data security measures as well as put in place insurance products to help protect their company’s hard earned money.

Be Cautious When Using Smart Devices

Mobile devices used by you personally or provided by your business or employer offer wonderful advantages to make you more productive, but they come with potential hazards. Security breaches either by accident or intentional "hacking" can put your personal information and/or your business information at risk.

Most corporate security types say the biggest issues involve personal mobile devices use to "hack" into corporate servers and data bases. Data encryption and passwords are highly recommended along with the ability to wipe out data from a Smartphone or tablet issued by the company. The latter can be extremely helpful in the event a personal Smartphone is stolen, and the corporate IT people want to wipe the phone of all secure access information remotely. Some corporations allow access to company data through personal mobile devices but only with devices that were provided by the corporation. Some corporations are requiring employees to register personal devices with corporate security/data processing so they can control how their corporate data is being accessed. All of these precautions are highly recommended by Fey Insurance.

It isn't just the business world that faces possible problems with personal smart phones, iPads, etc. accessing data. Accessing your personal and private financial information via Smartphone, iPads, etc can also be an issue. Many people have their banking applications on their devices as well as applications that have all their stored passwords. A lost device could result in access to your personal bank accounts and do a lot of financial damage. Password protecting your devices is key. The more passwords and protection you employ the better in protecting you and your family from potential financial ruin. Apple iPhones have tracking capabilities so if your phone is lost you can use your personal computer or another iPhone to track its location. They also allow you to wipe the phones clean of all data and make them useless to anyone who might find the lost phone and want to cause serious problems with your data.

If you have further questions, consult your Smartphone or table manufacturer, your phone service carrier or your corporate IT/security people for help.

WSJ Article on Flood Insurance

Wall Street Journal had a very interesting article about flood insurance.   In the wake of all that is going on in the aftermath of Irene, we thought this article would be a good one to share.  As you may recall from our previous posts on flood insurance, it is run by FEMA.  What is going to even make this whole flood topic even more interesting is that the FEMA flood program expires on Sept 30th, 2011 unless the lawmakers decide to continue the program.  Stay tuned.

Click below to read the article:
As Homeowners Dive Into Pool Of Flood Insurance, Caveats Abound

Directors and Officers of Non-Profit Organizations

Many people today have a servant’s heart and wish to volunteer on different non-profit boards to help better their community.  As board members they steer the path of the non profit organization by helping with fiscal policy and with major decision making.  We at Fey Insurance strong encourage people to take part in boards to help better their community; however, we caution them to make sure these boards have Directors and Officers Liability. 

Many people think that if they buy a personal umbrella policy they will be covered for anything that could happen to them while serving on a board.  Unfortunately this is not always true.  Many umbrella policies only cover you for Directorships or Trusteeships if they are non-profit and only for Bodily Injury, Property Damage and Personal Injury.  Most lawsuits that could arise out of your service on a non for profit board will not be for Bodily Injury, Property Damage or Personal Injury.  They will be because other members of the organization that are not on the board disagree and disapprove of a financial decision or just an overall steering decision that the board made.  Lawsuits such as these are considered wrongful acts and do not fall under the Bodily Injury, Property Damage or Personal Injury and would therefore in many cases not be covered by your homeowner or personal umbrella.

This possibly large gap in coverage is why we strongly encourage our customers that sit on boards (for-profit or not-for-profit) to make sure the boards have Directors and Officers Liability (D&O liability).  D&O Liability is special coverage designed to protect for wrongful acts or supposed wrongful acts of the board.  We recommend this coverage to all boards not only to protect our individual insured’s but to also protect the organization itself.  Even if a claim of wrongful acts is frivolous it can still cost the organization thousands or tens of thousands of dollars just to defend itself.

So next board meeting you attend be sure to ask if they have Directors and Officers Liability.  If they say no and tell you that you should be fine if you have a personal umbrella be sure to reference this article to help them understand the possible large limitation that a personal umbrella has in covering you as a board member.  

“Wear and Tear” Vs. “Sudden and Accidental”

Two terms that are important to know when it comes to the reason behind an insurance claim. Those terms are “Wear and Tear” and “Sudden and Accidental”.

“Wear and tear” is defined by Wikipedia as “damage that naturally and inevitably occurs as a result of normal wear or aging.” An example on a home would be a house settling over time, a pipe that corrodes and leaks water over several months or years, or a roof that after 15 years starts to drop shingles. All these items would not be covered under an insurance policy as an insurance policy does not cover “Wear and Tear”. Insurance policies cover “Sudden and Accidental” events.

So what is “Sudden and Accidental”? The best way to define it is by giving examples. If a pipe in your house just suddenly burst from pressure or because of freezing that is sudden and was done accidently. If wind blows through your neighborhood and suddenly blows off your roof or chunks of your roof that is sudden and accidental. If a tree falls and damages your home that event is sudden and accidental.

“Sudden and Accidental” events are things people can not totally prevent which is why insurance exists and covers them. On the other hand, “Wear and Tear” damage can be prevented by making sure your property is well maintained and updated. Insurance policies are not maintenance contracts.

So next time you have damage to your property ask yourself is this “Wear and Tear” or “Sudden and Accidental”? If it is “Sudden and Accidental” be sure to call your insurance agent or if you are not sure which it falls under call your insurance agent and let them help you figure that out.

Insurance and Your College Kids

Out in front of our Oxford, OH insurance office, it is a busy place. Today 16,000+ Miami University students return to begin a new school year. This annual pilgrimage brings up potential insurance issues pertaining to what parent's personal insurance policies cover or don't cover. Three areas that parents should be aware of:

(1) If your son or daughter is going away to school over 100 miles from home without a car, most companies will rate your Personal Auto Policy for them being married which is a nice discount. Let us know if this discount might apply to your family and your Personal Auto Policy.

(2) Most insurance companies will extend personal property (contents) coverage and personal liability for your son or daughter while they are in college and living in a dormitory. Some, but not all, will also extend coverage if they are living in off campus facilities such as an apartment or other student housing. Please check with us to see if your insurance company provides this extended protection. If not, we should be able to write a Tenant/Homeowner for your student to cover both their personal property and personal liability while they are an undergraduate. If they are in graduate school, they should definitely have their own Tenant/Homeowner Policy.

(3) If you or your children are using a rental truck to take their things back to college, U-Haul, Penske, Hertz and other will offer you coverage on the vehicle (collision damage waiver) and extended liability. While these may be covered by your Personal Auto Policy, not all companies extend the protection, so check with us before renting the vehicle. Whether or not they are covered will depend on the length and Gross Vehicle Weight of the vehicle and several other factors. We may be suggesting you buy the extra protection from the rental company before your trip.

Leaving Your House Vacant? Consult Your Agent! (9/17/10 Repost)

In today’s real estate market it can be somewhat common to purchase a new home with out having first sold your current home. Prices are low so if you want to upgrade your house, now seems to be the time even if you know you may have to wait a few months until you sell your current home. So many are purchasing a new home, moving into it and then leaving the old home vacant until it sells. This can pose an insurance problem that Fey Insurance feels many don’t realize.

In a typical homeowner policy there is wording that refers to a 60 day period. For sixty days your homeowner policy will have no change in coverage once it becomes vacant. However, and this is important, once the house has been vacant for 60 days some of the coverages are no longer provided. Example, vandalism or malicious mischief claims would no longer be covered. Same with glass breakage claims. The reason for this is that a homeowner policy is priced and designed for buildings that are being lived in and cared for by the owners. Once the owner no longer lives there and it is vacant then the building is more at risk for claims and therefore the insurance companies require it be on a special vacancy policy. What does vacancy mean? Vacancy means the following, “Substantially empty of personal property necessary to sustain normal occupancy.”

So if you are considering purchasing a new home and leaving the current home vacant until it sells, please be sure to call your insurance agent so they can make sure coverages don’t disappear from your policy