What s Next In Insurance. Traci A. Dooley, CIC, CPCU Hortica, a brand of the Sentry Insuance Group

Transcription

1 What s Next In Insrance Traci A. Dooley, CIC, CPCU Hortica, a brand of the Sentry Insance Grop 1

2 Emerging isses 2

3 Emerging isses What do these companies have in common How abot these? Cyber Liability/Data Breach 3

4 Cyber/Data Breach What s the Isse? Data breaches at big companies make the news Bt breaches at small bsinesses are mch more common Nearly every state reqires bsinesses to notify those whose personally identifiable data has been compromised Many states reqire bsinesses to provide credit monitoring to those whose data is breached 4

5 Cyber & Data Breach Landscape Percentage of Breaches 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Data Breaches by Indstry Sector ITRC Data Breach Statistics In 2015, the Identity Theft Resorce Center (ITRC) reported that the bsiness sector acconted for 40% of total breach events; with the 2016 figre rising to 45.3%. At the end of Jly, 2017, this figre rose to 53.7% of total breaches, comprising 461events and 9.2 million records % of Breaches 2016 % of Breaches Sorce: Identity Theft Resorce Center 5 5

6 Cyber/Data Breach What is a Breach? Legal Definition varies between different states Depending on case, federal reglators can also become involved 6

7 Cyber/Data Breach What Data is sbject to breach A person s name associated with: Social Secrity nmber; Driver s license nmber; Financial accont or credit card nmber address Any information that allows access to a person s financial resorces 7

8 Cyber/Data Breach How do breaches occr? Unintended disclosres Hacking or malware Payment card frad Malicios insiders Physical loss Loss of devices laptop, i-pad, smartphone 8

9 Cyber/Data Breach It s not jst a technology exposre Addressing hman resorce vlnerability: Condct employee backgrond checks Character matters. People who are dishonest in small ways will often be dishonest in larger ways Effectively spervise employees Periodically adit employee access to information systems containing sensitive data to ncover nsal patterns of access Be sspicios of any employee who stores or records credit information otside of the sal system Typically, the easiest way for a dishonest employee to compromise 9 card data is simply to make an extra copy.

10 Cyber/Data Breach What to do when Fastest growing type of claim and insrance is available Embedded basic amont spread over all entities Larger exposre/larger amont of coverage Don t Panic have a policy and have a plan Contain Notify..the right people/place Do Not Notify..credit card companies, media, etc. 10

11 Emerging isses Insring Cannabis Operations 11

12 Emerging Isse Insring Cannabis Operations So what s the isse: Prodcts Liability exclsions Prodction, Distribtion & Sale of an Ingestible Prodct With psychoactive effects! Labeling & Marketing Prodcts Recall & Consmer Class Actions Claim Poor Qality Control Contamination 12

13 The Insrance Isse Schedle 1 drg nder Controlled Sbstances Act Federal law Don t have to toch the plant sppliers & service providers Anyone who aids, abets, consels, commands, indces or procres the commission of a federal crime Federal Money Landering Statte 13

14 Who & How? Homestates Insrance, Omaha, NE Property & Inland Marine Only James River Insrance, Richmond, VA Liability Atain Insrance, Farmington Hills, MI Srpls Lines Pinnacle Insrance CO W/C carrier State Insrance Fnd CA W/C carrier 14

15 What s Old bt is New Again?.recent in the news topics Flood Insrance Not covered nder a typical Special Perils policy Federal Government backdrop Employment Practices Liability Old Sits vs New Sits Demolition / Debris Removal Costly What triggers a loss? 15

16 16

17 Flood is in the news! National Flood Insrance Program extended ntil 12/8/17 Trmp signed reathorization on 9/8/17 to allow Congress more time to consider reforms NFIP was set to expire 9/30/17 Extension part of resoltion raising debit limit& fnding govt ntil 12/8. And, athorizes $15.25B in emergency fnding for disaster relief/rebilding (Hrricanes Harvey & Irma) Need for a longer term extension of NFIP to provide more certainty 17

18 Employment Practices Good News/Bad News EPLI lawsits have mltiplied over the past few years Now the highest % increases in claims filed in federal & state corts Most common type of liability lawsit filed today Big big companies sed for mlti-millions have slowed Sex Discrimination Home Depot $82M late 90 s ot of cort settlement & make significant change in operations to benefit female employees UPS - $80.7M female harassed & stalked by co-worker Pblix Spermarkets - $81.5M 150,000 female ee s class action These types have slowed why? Big corporations made big changes they are prepared - lots of edcation & oversight 18

19 The Bad News Lawsits Contine Today Bt. Targets have changed / Settlements lower Types of claims have changed Failre to Hire Timberline, Inc. - $81,500 receptionist woldn t give an application Disability Discrimination Pacific Gas & Electric depression - $1.1M Age Discrimination AT&T - $.5M; Texas Roadhose Race Discrimination Bass Pro Otdoor World #1 EEOC Filed Sit today Retaliation Claims Whistle Blower report safety violations Filed a WC Claim 19

20 How Do I Se Thee? Let me Cont the Ways. Eqal Employment Opportnity Commission (EEOC) Agency tasked with ending employment discrimination Signed into law by President Kennedy Mandate nder Title VII of the Civil Rights Act of 1964 The Eqal Pay Act Age Discrimination in Employment Act Americans with Disabilities Act Depending on # of employees, reqired to go to EEOC first and they make decision on validity of the claim Employee still has the right to get their own attorney and fight regardless of EEOC decision 20

21 Exposre & Enforcement Strict reporting reqirement before plaintiff can se Charges mst be filed within 180 days of the act of discrimination EEOC can se employer in spport of employee If charge dismissed or is no action from EEOC, employee still has 180 days to file a direct sit against the employer in Federal Cort Damages back wages, reinstatement or placement in specific job, attorney s fees & cort costs, seniority reinstatement, injnction against ftre discrimination 1991 changes allow additional remedies if intentional or in cases of malice or reckless indifference Pnitive ftre lost income, emotional pain & sffering, inconvenience, mental angish, loss of enjoyment of life Size of bsiness determines the maximm compensatory/pnitive 50 to 100 employees - $50,000 any one individal Over 500 employees - $300,000 any one individal 21

22 What yo can t do and what yo shold do Fail or refse to hire or to discriminate in regards to compensations, terms, conditions or privileges if a member of a protected grop Discharge becase they are a member of a protected grop Adopt a seniority system that discriminates against a protected grop Create artificial barriers that prevent protected grops from advancing Create an environment condcive to diversity Make reasonable accomodations withot nde hardship to the employer Wage & Hor Disptes big within or indstry today! CA Attorney & Wheelchair individal targeting or indstry for ADA violations 22

23 23

24 By the # s EPL complaints every day! And, 3 rd party exposre too gh! 16% chance settlement exceeds $1M Settlements are 39% higher in state corts than federal EEOC reports a record $482M in monetary relief in 2016 Highest demand ever 585,000 calls & 160,000 calls at field offices Disability discrimination 28,073 charges in 2016 Religios Discrimination 3,825 charges in 2016 Sex Based Discrimination 26,934 charges in 2016 Age Based Discrimination 20,857 charges in 2016 LGBT Based Discrimination 1,768 charges in 2016* 24

25 Smaller Companies are vlnerable Fewer prchase needed coverage Fewer have the money to fight a costly EPL claim Too many nder the false belief and view their organizations as a family and feel they will never be sed! 56% of cases filed reslt in verdicts for the employee/plaintiff Average case takes 2 years to go to trial; appeal even longer Largest nmber of sits TX, CA, FL and IL Employment related lawsits comprise one ot of every 12 federal cases Retailiation most common charge 75% claims fond to be grondless.bt only after employer spends $$$ defense dollars to prove it! Many times more expensive than jdgment 25

26 What can I do? Have a policy, abide by it, make sre everyone knows it If yo have insrance, se the resorces the carrier provides Some coverage better than none ($100K - $25M) Minimm premim $500 to $25,000 UW based on company size & complexity # employees & core bsiness/indstry Hiring/fire practices & trnover rates Policies & procedres (application/handbook) 26

27 Resorces Eqal Employment Opportnity Commission 27

28 Demolition & Debris Removal Recent Hrricanes Harvey, Irma & Maria make s take a look Things to Ponder.. Do I have enogh? Do I have coverage for this if it s not my debris? Cost of having a tree removed? Cost of removing car ports from roof of yor office? 28

29 What s New in the Traditional Lines of Insrance? Property & Liability How do I transfer liability? How mch is enogh? Maintenance & Upkeep Grade yorself & yor employees! Bsiness Ato Do I need separate trcking company? What if I hire company to trck my prodct? Am I protected? Do I lease big trcks? Am I distracted? Workers Compensation How can I save money? Who covers my greenhoses? 29

30 Property & Liability teach/train yor employees. Perception & Bias drives decisions Show before/after photos big claims / maintenance isses / machinery gards Commnication of Risk is Challenging Visals help. i.e. risk in MN only listened to recommendations of insring to vale after a fellow grower lost entire property in a fire and fond they were woeflly nderinsred Corporate Cltre Inflences Risk Management Carelessness, sloppy hosekeeping, maintenance 30

31 31

32 Workers Compensation Provides medical care and compensation to injred workers on a no-falt basis (A benefit to injred employees) Workers Compensation is the Exclsive Remedy for on-the-job injries. (A benefit to employers) 32

33 Workers Compensation What s the best way to lower yor cost? A. beat p yor agent for more credit B. Shop carriers every year to get the best deal C. nderreport yor payroll to save on premim D. Provide a safety conscios cltre which incldes hiring the right employees See ex-mod comparison with photo Controls i.e. 2 recent death claims from ptting poly on greenhose roof 33

34 34

35 Workers Compensation Training yor Staff / Sitations to discss with HR An employee retrns to work after a week-end or vacation and is visibly in pain (i.e. limping, stopped over, walking stiffly, or holding an arm stiffly) An employee has work restrictions nrelated to a work injry An employee calls in sick for back, neck, sholder or hip pain bt has not declared the pain to be work-related Whenever yo have concerns that a sitation may trn into a Workers Compensation claim 35

36 Workers Compensation Events that shold trigger a claim report: A job-related injry occrs (Record-Only reports are available for First-Aid only cases) An employee seeks medical treatment and/or misses work and attribtes the case to a job-related injry An employee complains of pain, especially of the hands, back or neck, in the absence of a specific injry or occrrence (potential repetitive trama claim) An employee advises of exposre to a toxic or otherwise harmfl sbstance while at work 36

37 WC Experience Mod Ø Ø Mst meet state gidelines to qalify for an experience rating Ø (i.e. MO $7K premim in one year or $3500 premim for two consective years) Compares Actal Losses to Expected Losses Ø Actal = Expected then WC Exp. Mod = 1.0 Ø If Actal < Expected then WC Exp. Mod < 1.0 Ø If Actal > Expected then WC Exp. Mod > 1.0 Ø Over the past 2 years many states have increased the amont of claim that gets inclded in the Exp Mod calclation. 37

38 What Does This All Mean??? Ø Annal WC Premim = $90,000 Ø WC Exp. Mod.88 = $ 79,200 Ø WC Exp. Mod 1.12 = $100,800 Ø WC Exp. Mod 1.50 = $135,000 Ø Difference of $55,800 in annal WC premim. Ø Yor insrance company shold help yo bt yo can control throgh safety efforts yor exp mod. 38

39 Bsiness Ato why are my rates going p? Distracted driving Laws protect s from orselves Higher vehicle replacement costs associated with technology Used cars keeping their vale longer Erin s 2010 Ford Escape $12500 Safe drivers MVRs / Safety Test / Test Drive only new or every year break bad habits States list these reasons for climbing rates distracted driving crashes, cheaper gas, higher-tech cars 39

40 Bsiness Ato Factors that inflence the cost of Bsiness Ato insrance inclde: The year, make, model, weight, cost, se and radis of operations of yor vehicles Claims yo filed in the past Yor drivers and their driving records 40

41 Best Practices for Managing Ato Risks Verify prospect drivers Motor Vehicle Reports before making hiring decisions Do not allow drivers to se hand-held phones, radar detectors or similar devices while driving Reqire the se of seat belts in all company vehicles Reqire employees to report all accidents, no matter how minor Investigate the cases of all accidents Maintain an accident report kit in every vehicle Take advantage of the Safety Services provided by Hortica s Loss Control Department 41

42 Common Driver Distractions Daydreaming Cell phone Drowsy driving Occpants Car accidents Electronics Reaching for items Applying make-p/grooming Reading Eating and drinking 42

43 Driver Distraction Distracted Driving - Facts 15 deaths per day and 1200 injries (CDC) fatalities and 421,000 injries 800,000 hand-held phones being sed at any given daytime hor 23x more likely to crash while texting 43

44 State Laws PA Texting ban CA / CT / DE / IL / MD / NV / NH / NJ / NM / NY / OR / VT / WA / WV / DC Handheld & texting ban 44

45 Hitting Stationary Objects One of or most freqently reported claims Backing into stationary objects Look before yo back p Use a spotter if available Back in for safety Make sre yo have enogh room to make it throgh Watch overhead clearances 45

46 Bigger Trcks Bigger Isses I contract ot my deliveries, so I m protected, right? It depends I know my drivers record isn t great, bt he s the best I have and the only one with a CDL 3 speeds are yo negligent? Have a policy & enforce it Lease / Loan Gap 46

47 47