Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
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
- 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
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.
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). That being said, you should consult your insurance agent when choosing a life insurance plan since there are several types of plans and deciding which is best for yourself can be quite difficult. Moreover, ask your agent if he uses something like a life insurance quote engine (https://ilife.tech/life-insurance-quote-engine-for-agents/) that can help him to easily access a transparent database of the highest-rated life insurance plans quickly. If he takes the help of such a technological tool, he could perhaps provide you with a greater selection of plans that can better suit your needs.
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