How Technology is impacting the Insurance Industry

The Insurance Industry has been Slow to Adapt to Technology

Many people within the insurance industry say the industry has not evolved since the Industrial Revolution. In some ways that is a true statement. With the introduction of several different forms of technology the insurance industry is advancing into the twenty first century. Technology has and will play a large part of the insurance industry for the foreseeable future. The insurance industry has been slow to adapt, but there the best companies are now using technology to gain a competitive advantage in both personal and commercial insurance.

Human Brain, Technology, Artificial Intelligence

Types of Technology Impacting the Insurance Industry

Wearables

Wearables have evolved far beyond wristwatches and clip-on GPS trackers. Some companies are adding smart vests and even boot inserts to monitor employees. What businesses are monitoring include heart rate, body temperature, and even the sweat rate. This helps businesses prevent employees from suffering from heat stroke or hypothermia. Motion sensors are being used to detect when a worker has fallen or in some instances when an employee has not moved for a period of time. These wearable technologies can alert supervisors or nearby colleagues of a potential danger.

Drone Technology

Insurance companies are using drones in a number of ways. One of the best ways carriers are using drones is to speed up the claims process in the aftermath of a natural disaster. Carriers will send an underwriter to an area and inspect multiple damaged properties with the drone saving an enormous amount of time in the claims process. In some instances, the underwriter can begin to process a claim even before the owner of the property is allowed back in to the area. In the future, many within the industry think the industry could use drones to view a property periodically throughout the year to record the condition of a property prior to a claim. Like most things with technology and the insurance industry, this will create new types of risks and privacy issues.

Autonomous Vehicles

Autonomous vehicles bring many different issues to the insurance industry. As autonomous vehicles work now, the insurance is held by the owner of the car. In the future, as autonomous vehicles move into other areas of the economy, the insurance industry will have to develop ways to deal with new types of risks. When a company like Uber or Lyft begin offering rides in unmanned vehicles, the liability insurance required will  change. When a company like Amazon begins using unmanned vehicles for deliveries; the insurance industry, along with the states and federal government, will have to adjust how the liability involved in these vehicles develops.

Computer Technology

How is Technology Impacting the Insurance Industry

Underwriting and Claims are quicker and more efficient

Insurance is a very specific product to sell. The price for one business is dramatically different than another business for a number of reasons. Insurance agents need a lot of information about a business before they can offer a quote on premium. There are a number of reasons for this and it is a frustration for both agents, underwriters, and business owners looking for coverage. Technology is helping to streamline this process.

Technology adoption is helping to better identify fraud and other crimes

There are numerous ways insurance companies are using technology to improve the insurance process for all policyholders. No where is that more evident than when it comes to policing fraud. Wearables and smart home devices are helping insurance companies determine when someone is committing arson or when someone is lying about a crime. A good example of how technology is being used to cover up a crime is in Arkansas in 2015, man was suspected of murder. Using the Amazon Echo and the smart water heater, prosecutors found that a large amount of water was used in the early hours of the morning on the night of the murder. The prosecutors used this as circumstantial evidence to show the man was covering up the crime.

Technology

Technology Requires New Types of Coverage

Cyber Insurance 

Cyber insurance is a necessary coverage for most business need in 2019. There are three types of policies that businesses may need. Cyber Liability and Data Breach Coverage are the two policies most businesses need and they are almost exclusively sold in tandem. The additional coverage some businesses need related to cyber insurance is Technology Errors and Omissions.

Data Breach Insurance deals with the first party damages to you and your business. Cyber liability deals with the third party liability a business faces to other people damaged by a data breach. Technology Errors and Omissions deals with businesses that provide or sell technology services and products. Thus far, carriers have had trouble understanding the risk factors related to cyber. For most policies, the carriers have years of historical loss information to determine the probability of claims. Most businesses have been operating over the internet for less than 10 years and a majority of that time they did not carry cyber insurance. Because of this lack of data, most insurance carriers either do not have a strong appetite for this coverage or they keep premium relatively high.

 

Odd ways businesses get hacked.

3 ways your Small Business can be Hacked

If your small business has eve been hacked, you know the importance of cyber security for small business.  You more than likely know that data breaches are no longer just a problem for big business. Any business can be hacked and the ways in which a business is hacked are very widespread. Here are 3 ways your small business can be hacked that are within your control to stop.

Hacked

Not periodically resetting a password

A few years ago there was a hack that occurred between two baseball teams, the St. Louis Cardinals and the Houston Astros. This hack occurred because a rogue employee (Chris Correa) within the Cardinals Organization guessed what the password of a former Cardinals Employee who now works for the Astros (Jeff Lunhow). It has never been confirmed what exactly the password was and if Correa knew what Lunhows’ password was when he was with the Cardinals, but Correa has admitted that he guessed the correct password for Lunhows’ log in credentials with his new team the Houston Astros.

This could have been prevented by simply resetting a password periodically and not using the same password for all log ins. Here is one tactic, many people use to remember their password when it has to change.  Start with a password like:

BaSkeTBaLl_2741+3657

The word Basketball can change with the seasons.  For instance, you could use the word baseball in the Summer and Football in the Fall.  You could also keep the same password and change the special character. In this example you would change the _ and the +. Be careful using this method because you are not changing much about the password.

Old Employees Still Have Network Access

When an employee leaves your organization there shoul dbe adequate steps taken to ensure the terminated employee no longer has access to any networks or internal files. There also may be several Sales as a Service (SAAS) companies out there that your business has an account with, but the terminated employee is the only employee who used the account. Having a way to keep access to those accounts or to change the password is important.

Third party vendors getting hacked

Two of the largest data breaches in history, Home Depot and Target, were started by a third party vendor being hacked first. In both of these cases a small business was hacked several weeks or months previously and the criminals waited until they realized they had access to the much larger database through this vendor partnership.  In the case of Target it was a local HVAC company that serviced a few of their locations in the Pittsburgh area. Home Depot had a vendor partner that processed the credit and debit card transactions at their self check out stations in most of their locations.

3 Types of Cyber Insurance Every Business Should Have

What if my business does not deal with computers.  Does that mean I really don’t need Cyber Liability Insurance?  What if I am the only person in my business who uses a computer.  Doesn’t that mean I don’t face all that much risk?  Let’s say I might need Cyber Insurance, but what kind and how much?

Do any of these statements sound familiar? If so, you definitely need Cyber Liability Insurance. The term Cyber Liability Insurance is used pretty generally because cyber security is such a young sector and the data about the risks are changing very rapidly.  Business owners and insurance companies are still having trouble determining who is at risk and how much risk those businesses actually face. Just because this is a new type of insurance coverage does not diminish the importance it can have for protecting your business.

Cyber Liability Insurance

Many business owners think a data breach can only occur to a big multi-national corporation. For the big data breaches that make the news, this is certainly true, but the truth is most data breach first start out with small mom and pop businesses. These mom and pop businesses are first hacked with the hackers intention of gaining access to a much larger database.  This usually occurs through carious types of vendor partnerships. In the case of Target and Home Depot both of these breaches were first accessed by a much smaller business partner, who was hacked.  For this reason it is immensely important for you to talk with an experienced independent insurance agent about all the risks your business faces.

The three main types of Cyber Liability Insurance Coverage are Cyber Security, Cyber Liability and Technology Errors and Omissions Insurance. The first two deal with risks relating to a Data Breach. The third deals with companies that provide technology services and products.

Cyber Security

Cyber Security Insurance is also known as Privacy Notification and Crisis Management Expense Insurance.  This coverage includes coverage for first party damage to you and your business. This coverage does not protect your business from damage done to third parties. Cyber Security Insurance deals specifically with the immediate response costs associated with a data breach. In many cases it is required by law to find out how the breach occurred, notify those affected and provide credit monitoring services for one year.

Examples of costs included in Cyber Security Coverage include:

  • hiring a forensics expert to determine the cause of the breach, suggest measures to secure the site and prevent future breaches

  • hiring a public relations agency to assist in dealing with the crisis

  • setting up a post-breach call center

  • notifying affected individuals whose personally identifiable information (PII) has been compromised

  • monitoring these individuals’ credit (usually for 1 year)

  • paying the costs to “restore” stolen identities as a result of a data breach (e.g., expenses of notifying banks and credit card companies)

Cyber Liability

Cyber Liability Insurance, also termed Information Security and Privacy Insurance, covers the insured’s liability for damages resulting from a data breach. It does not cover expenses that deal with the immediate response cost. This type of insurance protects businesses which sell products and services directly on the internet.  Also, it protects businesses which collect data within its internal electronic network. The most common forms of data breach involve personal or financial information like credit card numbers, bank account information, social security numbers, health information, trade secrets or intellectual property.

The types of situations where this information are accessed include:

  • An employee’s car is broken into and a business laptop is stolen.

  • An email containing sensitive customer information is sent to the wrong person.

  • Important paperwork, like a credit application, is taken during a break-in.

  • Failure to timely disclose a data breach.

Technology Errors and Omissions

Technology Errors and Omissions Insurance, also referred to as Professional Liability or E&O, is a form of liability coverage that protects businesses who provide or sell technology services and products. This coverage prevents businesses from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in a civil lawsuit. This can include business who sell and service computer products, but it can also include graphic designers and advertising agencies who create digital content that can harm a company’s reputation. It covers computer programmers who may create faulty code for a website that causes that business to mail products to the wrong addresses.

Cyber Liability Insurance is a new and emerging part of the insurance industry and it is not going anywhere. These risks are only going to become stronger as more and more business operate online. Before too long Cyber Security Insurance will be a normal part of businesses insurance policy just like workers compensation Insurance and general liability Insurance are today. Now is the time to consider if and how much cyber insurance your business needs.

Eight CyberSecurity Tips for Small Businesses

Cyber Security

In-depth Training for Employees in Cyber Security Prevention

You and your information technology expert need to come up with basic security practices for your employees. There need to be clear and concise rules of behavior for your employees regarding passwords and customer information.

Protect all sensitive Information from Cyber Attacks

Starting with just keeping the computers clean and always running the latest security software on schedule.  Make sure you are install all of the proper malware, antivirus, and key software updates. If you and your IT Professional are constantly paying attention to cyber security, the employees will take more of an interest as well.

Make sure you purchase the proper Cyber Insurance Policies

Cyber Security Insurance comes in two forms that are usually packaged together. The first is commonly referred to as Data Breach Insurance and it covers your first party damages to you and your business. The other coverage is commonly referred to as Cyber Liability Insurance. This coverage protects your business from the third party liability your business may have to customers and other parties who may be damaged by a data breach that occurs within your business.

Get the best answers to Data Breach and Cyber Security Insurance questions at MyInsuranceQuestion.com

Do not forget about having a policy regarding Mobile Devices 

Mobile devices are such a common part of our lives now that many people forget to realize their phones are a prime target for criminals to access a business’s sensitive information. Many employees may want to have access to their company email on their phones, especially if they travel much for work.  Having a well thought out policy that you are comfortable with and adequate measures to check that your employees are following the procedures is essential.

Make backup copies of important business data and information

There should always be a way for you to retrieve customer’s sensitive information. Microsoft one drive is a great fairly new software program that allows you to store and share information internally.  If you can afford it, having a second server at a separate location may be necessary depending on how much information your business does store.

Cyber Security Insurance is needed for most small businesses.

Strictly control access to your computers and create user accounts for each employee

This can help dramatically if you have an internal problem. Knowing who was logged in at the time of the access can help determine where to go to find information about a hack. It may be as simple as an employee who opened a zip file in an email and they are scared to bring that to your attention fearing retribution or it may help you find the source of employee theft.

Secure your Wi-Fi networks

Properly securing your Wi-Fi network may seem like something obvious to prevent a hack. For small businesses owners without a lot of technology experience may not know how to do this or the need for this type of security. This should be the first and foremost thing a small business should do to prevent unauthorized access.  This is important to consider for businesses that are open to the public or may offer Wi-Fi access to their customers.

A Strong Password is essential to a good Cyber Security Program.

Passwords and authentication

Passwords protection is crucial to defending your business from a data breach.  It is important to give your employees hard examples of what is a good password and what is not.  What may seem secure to one employee may be something as simple as October which is not acceptable in the least bit.  Here are some examples of password you can use to demonstrate strong and weak passwords.

6f8Il,E6pg%j2

This would be an example of a password that is extremely secure.

BaSkeTBaLl_2741+3657

This would be an example of a password that is a little less secure, but easier to remember.

JoeSmith or password

These are examples of terrible passwords that should never be used.

You will find many employees like to use something similar to the middle password. This is because it has some resemblance to a word they can associate with to remember the password more easily.  I personally like this because, in the Fall I might use Football or Autumn, in the Winter I might use basketball or Thanksgiving. As long as you are keeping the other numbers and special characters random it is difficult for hackers to hack through these secure passwords.  The birthdays of yourself or a family member should never used. There should also be a time period for how frequently a password must be changed. Every 90 days is a good rule of thumb, but many businesses have different requirements based on the needs of their organizations.

Talk with your agent.

In today’s business world, time is of the essence for all business owners. When purchasing something for their business, many business owners want it done fast and cheap. They may have an inclination to rush through the buying purchase or to only focus on price. In many instances this may be wise, because their time is more valuable running the business than trying to save on buying whatever is needed for that business. When it comes to purchasing commercial insurance this is not a good idea. In this instances it is crucial for business owners to take the necessary time to have a long honest conversation with their insurance agent.

In conversations I have with agents in the insurance field, they all say rushing through the buying process is a mistake far too many business owners make. This is where a little time on the front end may cost the business owner some time away from their business, but on the back side it can save their business hundreds if not thousands of dollars when a claim does occur. During these conversations the agents are typically trying to get as much information as possible about the daily operations of your business. They understand business owners may be shopping around to more than one agency and that their time is valuable, but rushing through this process can cause your business to be under-insured or to pay too much in premium.

These problems frequently come about because business owners do not inform their agent what exactly the business does and what the business does not do as a part of their daily operations. Insurance companies are in the business of analyzing risk. It is in their best interests to assume more risk rather than less. They can only assume the risks of your business based on the information you provide them with. If you do not provide them with the enough information they frequently will assume more risk, which costs more in premium.

In most industries there are numerous industry classification codes. In most states these classification codes are determined by the National Council on Compensation Insurance (NCCI).  These classification codes separate businesses by the type of work they do or do not partake in. Take landscaping as a prime example. There are at least a half a dozen class codes for lawn care and landscaping based upon the daily operations of your business. The two most common NCCI classification codes for the landscaping industry are 9102 and 0042. 9102 is designated for lawn care or maintenance of existing lawns, where 0042 is designed for businesses that install lawns and beds. The second class code is more dangerous and has a higher premium. If you rush your agent through the quoting process, they may place you in the wrong classification code. This can cause your business to end up paying far more in premium than is necessary. These mistakes frequently get fixed during the end of term audit, but even when they do your business has still paid more in premium than was necessary. That means there is cash-flow your business could use tied up in unnecessary insurance premium.

On top of tying up cash in premium, another problem exists that a good insurance agent can help your business with. The problem they can help your business with is to understand what exactly is and is not covered under your different insurance policies. This can help you fill in coverage where gaps might exist. This is where an agent can help you determine if you need a coverage like Business Loss of Income Coverage or Data Breach Insurance. 

Business loss of income coverage is a policy that is a type of commercial property insurance coverage that kicks in when a business suffers additional loss of income suffered when damage to its premises causes a slowdown or suspension of its operations.  The damage has to be the result of a covered loss. Take for instance if your building experiences a fire. Your commercial property insurance will cover to repair the damaged building, but it will not cover your business for lost revenue while you have to be closed for repairs. This is where business loss of insurance coverage kicks in. Many businesses who fail to secure this coverage do not survive when an occurrence happens.

Data breach is another coverage that is becoming more and more necessary. Many business owners feel they are too small or do not deal with computers or customer information enough to need this coverage. Take a commercial cleaning company for example. They have 5-15 employees and clean 5 office buildings and one retail store at night while the businesses are closed. Their employees only use a cell phone and never interact with a computer. Their business owner thinks they would never need something as advanced as data breach coverage. But what if you clean the offices of a bank and an employee of the bank leaves  a post-it note on their desk with the username and password for the internal system. If one of your employees finds this they could get into the system and access the financial records of the banks customers. That is a need for data breach coverage. Two of the largest data breaches in history, Target and Home Depot, were started by hackers first accessing a small business who was a partner of the larger business that got hacked. You do not have to be a big company nor do you have to store lots of personal information in order to be a target for criminals.

All of these and other problems can easily be prevented by taking the time in the first place to speak long and honestly with your independent insurance agent. They can help you understand what risks your business because not only do they interact with business all the time when they are purchasing insurance, but they also frequently interact with business owners when the unfortunate accident occurs. From that experience they can help you prepare for when dooms day comes for your business. If you take this time to properly protect your business it can be the difference between closing your doors for a short time and closing your doors forever.

4 ways your Small Business can prevent a Data Breach

In today’s day and age, there are many ways businesses take and face risks. Some businesses are in industries where they take risks just in the fact that they are open for business. That can be a roofing company who has employees who climb on top of a house on a daily basis. Other businesses face risks in hiring and firing employees, generating enough revenue to stay afloat and most importantly the risk of becoming victim to a data breach.  Most business owners do not think twice about purchasing commercial property insurance, but many still hesitate to secure small business data breach insurance.  This is a mistake because it does not matter the size nor the scope of your business, every business is a target for being hacked and every business is at risk for a data breach.

Obtain the best information about how to protect your small business from a cyber attack and where to buy small business data breach insurance at myinsurancequestion.com

Two of the largest data breaches in history were Target and Home Depot. Both of those breaches were accessed by first hacking in to a smaller company before gaining access to the larger company. Niether of these businesses had Small Business Data Breach Insurance. In the case of Target, the company was Fazio Mechanical Services and in the case of Home Depot, the company provided credit and debit card processing. These companies had been hacked weeks if not months prior to accessing the system of the larger company.  If your business works for any larger business than you could be at risk of being a target for hackers. If you choose to protect your business with data breach insurance this may not be as damaging.  Even if your business does not partner with larger companies you could still be a target for hackers just to get the information of your customers. This is a costly risk that you are taking without properly insuring your business and without taking precautions to protect your business. According to the Ponemon Institute it costs a business on average $174 per record. Other studies show it costing more. Taking these numbers in to consideration it would cost your business more than $17,000 for just 100 records being compromised. if that were 1,000 records it would cost $174,000. If that is not a cost your business can withstand than you need to have Small Business Data Breach Insurance Coverage and on top of that you need to be taking the proper steps to preventing this from happening. Here are four simple things your business can do to prevent a data breach.

Train your employeesLearn about the needs for Small Business Data Breach Insurance at My Insurance Question.com

The prevention of data breaches starts with your new hire training. If an employee is going to be using a computer they need to be trained on how to protect the company from being at risk. Do not assume employees know how to do this. Many employees may be very capable of doing a job for your business that is necessary. This does not mean they are computer savy and are properly trained to protect your business from intruders. Take the time and effort on the front end to properly prepare your employees to defend your business against hackers and it will provide dividends on the back end.

Help each employee protect their work space

Logging out and locking up your desk when away and over night are crucial. Even if the employee is just stepping away to the restroom it is crucial to lock up their devices. In most business environments, there are customers, vendors and other employees who may gain access to your computer while you are away.  You do not have to create a culture of mistrust to do this. On top of locking down your devices it is also important to not write down passwords on a post it note or some other piece of paper. It may be rare, but if these passwords fall in to the wrong hands it can cost your business immensely.

Require long passwords 

Passwords need to have certain requirements to be allowed. The best way to make this easier for your employees is to give them examples of what you want. here are a few examples of how someone can make a password strong and still make them rather easy to remember.

6h1fl,j2Oc49=

This would be an example of a password that is extremely secure.

BaSeBaLl_2345+6789

This would be an example of a password that is a little less secure, but easier to remember.

JoeSmith or password

These are examples of terrible passwords that should not be allowed.

I like using something similar to the middle password because I can change the word Baseball with the time of the year. In the Fall I might use Football or Autumn, in the Winter I might use basketball or Thanksgiving. This allows me to change the password frequently but not having to remember an entirely new password. There should also be a time period for how frequently a password must be changed. Every 90 days is a good rule of thumb, but many businesses have different requirements based on the needs of their organizations.

Shred everythingTo prevent a Small Business Data Breach make sure your employees shred everything that could be used in a cyber attack.

In today’s day and age, there is no reason any personal information should ever be disposed of without first being shred. There are outside businesses that can dispose of the shredded material. Some of these businesses will even recycle this paper, which is something you can share with your employees, customers and vendor partners. If any of these groups are environmentally conscious this can be a bonus to them and will add to your credibility as a business.