Information Management Liability aka Cyber!

Presented by: Christopher F. Hawthorne, CPCU, CIC

Technology has delivered an exposure for those who hold, use or depend on information be it paper or electronic. Just as inventory once was the life line for a business, data and information now takes their place alongside the tangible assets of a business. This can be data in the form of client records, billing operations, employee files, websites and inventory management. When data or information is shutdown or stolen, it can represent a large loss. The loss can be both a first party loss (out of pocket) and a third-party loss (demanded by another) as well as trigger government action and penalties against the business.

First party losses are out of pocket expenses for a business such as rebuilding lost data, cost of forensic studies to determine what was lost, cost to restore systems and loss of income from business interruption.

In between first- and third-party losses are losses from extortion or ransom. A criminal may demand money to allow a computer system to released from any hold the criminal has on it or to stop a website from being overrun by an attack. While the cost is out of pocket it is caused by a third-party demand.

Third party losses arise when there is damage or loss of another’s data or private information, damage to their hardware or to their website.  The cost associated with third party losses are notifying parties of their lost or released information, credit monitoring, defending from law suits, and paying settlements.

In addition, governmental actions (fines and penalties) may arise on both state and Federal levels. It is worth noting, that Massachusetts has the toughest data privacy laws in the nation.

Neither Property nor General Liability insurance pays for these types of losses.

There are several carriers now offering coverage for this exposure and many provide hotlines and proactive risk management assistance. In addition to obtaining this coverage, it is worth reviewing your technical / system support vendor to make sure the job description includes “security and compliance” as opposed to simply having the technology function.

In summary, the Information Management Liability (Cyber) exposure requires the attention of every business from perspective of insurance protection and risk management mitigation. To fail to do so is to put the survival of the business at stake.

 

Photo by Pixabay

PCORI Filing Deadline Looming

The Affordable Care Act imposes fees on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Institute (PCORI). PCORI is responsible for conducting research to evaluate and compare the health outcomes and clinical effectiveness, risks, and benefits of medical treatments, services, procedures, and drugs.
Plan sponsors must pay the PCORI fee by July 31 of the calendar year immediately following the last day of that plan year.
  • Policy Or Plan Ending Date in the months of: Jan. 2018 – Sept. 2018
    File return no later than: 7/31/2019
    Applicable rate: $2.39
  • Policy Or Plan Ending Date in the months of: Oct. 2018 – Dec. 2018
    File return no later than: 7/31/2019
    Applicable rate: $2.45
  • Policy Or Plan Ending Date in the months of: Jan. 2019 – Sept. 2019
    File return no later than: 7/31/2020
    Applicable rate: $2.45
PCORI fees are reported annually on the 2nd quarter Form 720 and paid by its due date, July 31st. The fees are based on the average number of lives covered under the policy or plan.

The types of plans that must pay the PCORI Fees by July 31, 2019 include the following

  • Health/accident plans
  • HRAs with a plan year that began 1/1/2013 that are not an excepted benefit (Employer contribution is greater than $500)
  • Health FSAs with a plan year that began 1/1/2013 that are not an IRS excepted benefit (Plan has employer contributions with the maximum reimbursement greater than two times an employee’s salary reduction election or employer contribution is greater than $500)
  • Retiree plans

Please Note that the PCORI fee is nearing the end:

The PCORI fee will not be assessed for plan years ending after September 30, 2019. This means that for calendar year plans, the last year for assessment is the 2018 calendar year. For non-calendar year plans that end between January 1, 2019 and September 30, 2019, there were be one last PCORI payment due by July 31, 2020. There will not be any PCORI fee for plan years that end on October 1, 2019 or after.

Please click on the links below to access Form 720 and Form 720 instructions.

Budgeting, Discipline and Looking Ahead: Getting Started in Life Planning

 

Achieving your financial objectives has a lot to do with how well you plan for your family’s future. It’s important to begin this process sooner rather than later because the demands of work and a busy family life can force long-term planning onto your “to-do” list. Being ready for unexpected expenses and having a plan for your children’s futures also shouldn’t be delayed, because by the time you get around to them, you may have other financial commitments and too much debt to start saving.

Savings

Saving is fundamental to financial planning, and it’s still one of the best ways to protect yourself against financial emergencies. Budget carefully, purchase wisely and plan ahead so you’re well-positioned to grow your savings. Bear in mind that saving is about more than preparing for the future; these funds are also there to shield you from the financial damage that emergency home repairs, serious illness or job loss can cause, and from having to rely on credit cards and other high-interest options.

College savings

According to US News & World Report, annual public tuition will cost more than $40,000 by 2030, with a four-year degree totaling an expected $205,000. Those are daunting figures for someone who hasn’t set aside money for a child’s college fund. If you want to help your child achieve a degree so they can get a good job and succeed in life, consider starting a college 529 plan as soon as possible.

Retirement savings

For young couples, retirement is little more than a vague idea, something their grandparents talk about. It’s difficult to feel a sense of urgency when you’re looking at 30 to 40 more years of earning money and building a life. But if you enroll in a retirement plan at work and continue investing in a 401(k) and Roth IRAs, your retirement fund will continue to grow and be there for you when it’s needed.

Life insurance

Purchasing a death benefit for your family is one of the first steps in making sure your loved ones are protected should you die unexpectedly. Joint life insurance policies cover both spouses, but tend to be more expensive and may not be the best option for some families. A 30-year term life policy can be an excellent option for a young family because it’s there for you when it’s most needed (i.e. until the kids are out of college and your mortgage is paid off).

Estate planning

Estate planning is something that people often concern themselves with later in life, perhaps when retirement is within reach and estate plans need to be finalized. But there are fundamental aspects of estate planning that require your attention now because they come into play if you or your spouse die unexpectedly or become incapacitated.

When young couples prepare a will, it’s generally so they can name a guardian for their children, but a will also provides for the distribution of money, assets and property. A living will or advance directive, another aspect of estate planning, establishes your wishes concerning end-of-life care. For further information about life planning, consult a professional financial planner or estate planning expert.

When you’re young, life planning tends to be about financial basics, like saving money, establishing retirement and college funds, getting life insurance, and taking care of estate planning basics. Careful budgeting will make it easier to stick to a plan and build the kind of savings and college funds you’ll need later on, so stay disciplined and allow those seeds you planted to grow.

Courtesy of Pixabay.com

Summer Home Improvement Ideas

 

When you own a home, there are always chores and tasks on your “To Do” list.  Summer is the perfect time to attend to many outdoor projects and to plan ahead for others. And, if you can’t bear the thought of wasting precious outdoor time on home improvement endeavors, you can always hire someone to do them for you.
Improvements That Pay
It is always a good idea to focus on projects that add to the resale value of your home, such as adding a deck or a patio; installing a lawn sprinkler system; or landscaping your property.
Decks and patios can add visual interest to your property, while also providing you with an enjoyable living space. Sprinkler systems water your lawn evenly and allow you to dictate the timing, which can be handy during water advisories. They also prevent waste and lower water bills; homeowners usually use 50 percent more water on their lawns than necessary. Landscaping is an easy way to improve the look of your property.

Exterior Improvements

If your home already has a deck, summer is an ideal time to seal it and repaint or stain it. Sealing the deck helps to preserve the wood and protect it from weather damage, while painting or staining it give it a sharp, fresh look. If money is a concern, contact your local household hazardous waste program — there is often unopened paint available.

Paint, wherever you obtain it, is also handy for painting the exterior of your home. Paint spruces up your home, giving it a fresh, new look; but it also serves a practical function, protecting against moisture and ultraviolet rays.

While you’re eyeing the exterior of your home, consider a couple of other tasks that are much more practical in summer than winter:

Cleaning your eavestroughs and washing/and or replacing your windows.
Eavestroughs should actually be tended twice a year, and they’re not hard to do if you own a ladder. While you’re clearing away the leaves and debris, check for any cracks or leaks.

Focus On Your Windows

Looking out the windows at the flowers and greenery makes summer more of a pleasure, so make sure you can enjoy the view by cleaning your windows inside and out. If you choose to do it yourself, there are inexpensive cleaning solutions that give the glass a real sparkle:

A vinegar-water mixture or a few drops of dish soap in warm water.
While you’re washing your outdoor windows, consider applying caulk around the frames. Caulk keeps outdoor air from seeping in through potential cracks, lowering heating and cooling bills. It also prevents water from seeping into your walls to cause mildew and rot.
You can also give your windows a fresh, new look by replacing them. If you’re seeking better insulation or more sunlight, this is the time of year to invest.

Spruce Up The Grounds

When it comes to landscaping, one easy way to give your grounds a fresh look is to add mulch. Apply three to eight centimetres of mulch to your flower beds to give them a fresh, new look. At the same time, you’ll be helping to smother weeds and to hold moisture in, reducing the need for watering.

You can check with your local utility company or tree service to see if they offer wood chips or shredded bark for use as mulch; they often sell it cheaply.

Summer is also a good time to consider the shade available on your property and think about whether it’s adequate or not. It’s a perfect moment to plant trees that will provide cover in the future, but if you’re seeking relief from the sun right away, there are options: umbrellas, pergolas or covered porches. There’s no need to suffer in the hot sun if you prefer the shade.

Time For A New Driveway

Summer is the appropriate time to repave your driveway. You can choose asphalt or concrete; asphalt is less prone to cracks.  Summer is its season, because asphalt adheres better when it’s warm. With a shiny, new driveway surface, you’re less likely to experience potholes come winter!

Good luck with your projects and if you need insurance advise don’t forget to call your Cleary Insurance Account Executive for help!