If your customers are located within the European Union or European Economic Area, it is critical to understand this regulation. US businesses’ are required to comply with this regulation if they control or process the personal data of individuals within the EU or EEA.
There are times when the coverage you need is available exclusively from a non-admitted carrier. That being said, it is important to understand the difference between admitted and non-admitted carriers, as well as the advantages and disadvantages of each.
An admitted carrier is one that follows guidelines set forth by the state, and is therefore licensed in the state or country in which the insured’s exposure is located. These guidelines vary from state to state, and some are more stringent than others. The obligation to follow state regulations and submit rates to a state’s department of insurance limits the flexibility of the insurer. If an admitted carrier becomes insolvent, the state guarantee fund steps in to pay out claims and premium remuneration where applicable.
It is a common misconception that non-admitted is synonymous with non-licensed. In reality, non-admitted carriers do not have rates filed with the state and therefore are not as highly regulated, but this also means they are not protected by state funds. Because of this, they are sometimes able to offer better rates–these carriers can base price on specific exposures. Further, certain complex risks require the use of non-admitted carriers because the conventional insurance marketplace fails to provide adequate coverage. However, in the case of insolvency, the state will not pay the carrier’s outstanding claims and premium remuneration.
Judging Financial Strength
Since with a non-admitted carrier you are not guaranteed payout from the state in the case of insolvency, as you are with an admitted carrier, one of the most important things to consider when purchasing coverage through a non-admitted carrier is its rating from firm A.M. Best, which rates a carrier on financial strength and size based on policyholder reserves. As long as you are aware of market conditions and are sure the carrier is reputable, buying coverage from non-admitted carriers can be beneficial: they often provide lower rates, absolute control over coverage terms and coverage unavailable through admitted carriers (including specialty risks, risks that are unusual or those that are unusually large).
Non-admitted does not mean that an insurer is not regulated–many states do regulate non-admitted insurers. In fact, many non-admitted carriers are actually admitted carriers in other states. Non-admitted carriers intentionally opt-out of filing rates with the state not necessarily because they are unable to comply, but because doing so provides the advantages mentioned above. However, just because a carrier is admitted doesn’t mean it is financially solvent. Because of state restrictions, admitted carriers’ payouts may increase faster than permitted premium increases in certain classes of business, leading to financial instability. When making carrier decisions, consider whether the carrier is admitted or non-admitted, as well as if it is financially capable of paying a claim in the event of an accident.
Frozen pipe claims are horrible to live through and can displace your family from your home during the holidays.
As technology becomes increasingly important for successful business operations, the value of a strong cyber liability insurance policy continues to grow. The continued rise in the amount of information stored and transferred electronically has resulted in a remarkable increase in the potential exposures facing businesses.
In an age where a stolen laptop or data breach can instantly compromise the personal data of thousands of customers, protecting your business from cyber liability is just as important as some of the more traditional exposures businesses account for in their commercial general liability policies.
Claims Scenario: Outsourcing Gone Wrong
The company: A national construction company that outsources some of its cyber security protections
The challenge: A construction firm partnered with a third-party cloud service provider in order to store customer information. While this service helped the company save on server costs, the third-party firm suffered a data breach.
As a result, the construction firm had to notify 10,000 of its customers and was forced to pay nearly $200,000 in incident investigation costs. The incident was made worse by the fact that the firm did not have a document retention procedure, which complicated the incident response process.
Cyber liability insurance in action: Following a data breach or other cyber event, the right policy can help organizations recoup a number of key costs. Specifically, cyber liability policies often cover investigation and forensics expenses—expenses that can easily bankrupt smaller firms who forgo coverage.
What’s more, when third parties are involved, managing litigation concerns can be a challenge. By using cyber liability insurance, organizations have access to legal professionals well-versed in cyber lawsuits and response.
Benefits of Cyber Liability Insurance
- Data breach coverage—In the event of a breach, organizations are required by law to notify affected parties. This can add to overall data breach costs, particularly as they relate to security fixes, identity theft protection for those impacted by the breach and protection from possible legal action. Cyber liability policies include coverage for these exposures, thus safeguarding your data from cyber criminals.
- Business interruption loss reimbursement—A cyber attack can lead to an IT failure that disrupts business operations, costing your organization both time and money. Cyber liability policies may cover your loss of income during these interruptions. What’s more, increased costs to your business operations in the aftermath of a cyber attack may also be covered.
- Cyber extortion defence—Ransomware and similar malicious software are designed to steal and withhold key data from organizations until a steep fee is paid. As these types of attacks increase in frequency and severity, it’s critical that organizations seek cyber liability insurance, which can help recoup losses related to cyber extortion.
- Legal support—In the wake of a cyber incident, businesses often seek legal assistance. This assistance can be costly. Cyber liability insurance can help businesses afford proper legal work following a cyber attack.
Contact Tooher-Ferraris Insurance Group today to learn more about your unique exposures and options for Cyber Liability Coverage. Using our industry specific cyber exposure scorecards we can customize a plan for your unique needs.
Business |Personal | Risk Management
Phone: 800-899-0093 | www.toofer.com | email@example.com
Directors and officers liability (D&O) insurance is a fundamental component of any company’s risk management program. A lack of D&O insurance may dissuade talented individuals from seeking an executive position at your company, as they don’t want to put their personal assets at risk in the event of a lawsuit.
As a savvy business owner looking to protect your bottom line, how do you weigh the cost of insurance to protect your senior leadership with the potential risk of a lawsuit? As regulatory investigations and defense expenses increase, prices for D&O insurance have gone up as well. Corporate indemnification provides the first line of liability protection; but certain circumstances—most notably, if the company goes bankrupt—necessitates that additional protection is offered to directors and officers.
A variety of factors determine the price of a company’s D&O insurance. Some low-risk companies pay pennies on the dollar; others pay a lot more, but they understand it’s a lot less than the expenses they’d incur in a lawsuit. Recognizing the cost drivers of D&O insurance—a company’s exposures, legislation and trends in D&O lawsuits—can help you decide what coverage your company needs to mitigate its unique exposures.
Company Characteristics and Exposures
Public, private and nonprofit corporations with assets of all sizes purchase D&O liability insurance. To determine the cost of premiums and the limits of coverage, insurers review several facets of the company’s structure and price D&O insurance accordingly. Some of these attributes include the following:
- Is the company mature or young and developing? Companies with less experience and a shorter history of proven effective management can be a riskier policy to underwrite than well-developed companies that have experienced directors and officers.
- What industry is the company involved in?Operating in certain industries, such as investment banking and securities, may expose their executive management to more risks than those for the board members of a small nonprofit.
- Is the company financially stable? Insurers consider the amount of debt a company has. Corporate indemnification usually protects directors’ and officers’ personal assets. However, if the company’s finances are unstable, they have an increased chance of becoming insolvent during a lawsuit.
- Is the company planning on going public soon? Initial public offerings, the most common way to go public, increases the exposures for a private company. Issues, such as a lack of disclosure or if the company’s performance fails to meet expectations, are significant risks for directors and officers during this process.
- Does your company have employees? From nonprofits to large, publicly held companies, employment-related claims are the primary cause of lawsuits against an organization’s directors and officers.
- Does the company operate in foreign markets? Conducting business internationally can complicate the D&O insurance needed. For example, in addition to domestic laws, European countries have their own set of regulations to follow.
- What is the company’s history of past litigation? Insurers will analyze a company’s history of
|What Type of D&O Coverage Do You Need? |
Your organization’s unique attributes and risks will
Side A: This coverage protects directors and officers when indemnification is not available. For example, if the company goes bankrupt during a lawsuit, this coverage would protect directors’ and officers’ personal assets.
Side B: This coverage reimburses a company’s
Side C: This coverage protects the company itself in the case of a
Employment Practices Liability (EPL): This coverage protects
directors and officers against wrongful termination,
discrimination (age, sex, race, disability, etc.) or sexual harassment suits from current, prospective or former employees.
Fiduciary Liability: This coverage protects the fiduciaries of
employee benefit plans from ERISA lawsuits, previous lawsuits
Current and New Legislation
Securities Exchange Commission (SEC) regulations continue to impact the cost of D&O insurance. Publicly held companies especially must be cognizant and keep current on SEC disclosure obligations and provisions in the Sarbanes-Oxley (SOX) Act of 2002, which was enacted in response to the corporate scandals of Enron, Tyco, WorldCom and others.
Also, recent changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act have caused a spike in whistleblower reporting, bringing to light many D&O claims and increasing the need for D&O insurance. The new whistleblower provision in the Act now gives whistleblowers a “bounty,” or monetary compensation, if the lawsuit results in more than $1 million in monetary sanctions. Given this new incentive, there has already been an increase in the number of whistleblowers that have emerged since the Act added the provisions in early 2011.
Trends in D&O Lawsuits
Even after a thorough assessment of a company’s risks, D&O insurance continues to be a high-severity product, as carriers are often hit unexpectedly with catastrophic claims. It’s no surprise that as litigation increases, the price of D&O insurance increases as well. In addition, as the litigation process grows lengthier and if multiple lawsuits erupt from a single transaction, a company can quickly exhaust its primary layer of D&O coverage.
Some types of lawsuits occur less often, but result in catastrophic losses. Other types result in smaller payouts, but occur more frequently. Nonetheless, defense expenses can cost millions of dollars, even if the director or officer is not found liable. Some of the types of lawsuits that affect directors and officers include the following:
- Breach of fiduciary duty lawsuits
- Employee Retirement Income Security Act (ERISA) lawsuits
- Employment-related lawsuits
- Mergers and acquisitions (M&A) and “merger objection” lawsuits
- Securities class-action lawsuits
- Shareholder derivative suits
Within the last few years, there has been an increase in M&A lawsuits. In 2014, there were more than 600 lawsuits regarding M&A. Some M&A cases involve multiple lawsuits and a lengthy litigation process, which can deeply cut into a company’s primary D&O policy.
Know What Your Policy Covers
While many companies usually focus on the cost of their D&O policy, understanding the scope of the policy is even more critical. Most D&O policies are renewed yearly, and the terms and conditions can change. Read through your policy carefully. Be aware of the following:
- Look at the limits of your liability. Are they enough to cover your exposures? Companies with a lot of risk exposures usually find that they need more than just the primary coverage, and purchase excess insurance as well.
- Be aware of exclusions; most D&O policies do not cover claims that arise from fraudulent or criminal acts.
- For some insurance carriers, Employment Practices Liability (EPL) insurance and Fiduciary Liability insurance are policies that are purchased separately from primary D&O insurance. Don’t assume they are automatically included in your D&O policy.
Floods, lightning strikes and other common storms can endanger your home, but you also need to consider the risks of the wind damage that accompanies these weather events. High winds can cause significant damage to your home’s roof, windows, doors
Here are some ways you can protect your home:
- Roof—Inspect your roof from the ground to ensure it’s fully covered. If you notice any damage, you should consider having it inspected professionally to ensure it’s up to code and that all of the shingles are secure.
- Doors—Make sure your doors are made of a strong substance that isn’t heavy enough to present a risk if it’s torn off, such as solid wood or a hollow metal. You can also secure your existing doors by installing additional hinges or deadbolts.
- Windows—Install impact-resistant shutters on large windows to protect your home from changes in air pressure and flying objects.
- Yard—Remove any trees or other foliage that could come loose and fall on your home in high winds.
After a storm passes, you should inspect your home for damage as soon as possible. Contact Tooher-Ferraris 203.834.5900 if you need to make a claim or have questions about your insurance coverage for wind damage.
For many employers, workers’ compensation insurance is all about one number—the premium quoted. Understandably, employers want to pay the lowest amount possible on this mandatory coverage. While some brokers try to compete on a low bid, those who do miss the chance to educate employers on how their
There’s much more to workers’ compensation than price. Let us show you how an analysis of your mod can identify problem areas in your operations and ultimately lead to cost savings.
What does your mod reveal?
While the mod itself is a single number, an analysis of how your payroll and loss data functions in the experience rating formula can provide valuable insight.
Mod calculation varies by state but generally depends on these components:
- Actual losses from the three prior policy periods, not including the most recent policy period
- Expected losses based on payroll and expected loss rates for the industry
- The amount of each loss, i.e., its severity
- Whether the loss is medical-only, without temporary or permanent disability
- Ballast and weighting values published by the National Council on Compensation Insurance (NCCI)
Generally, the mod is calculated using loss and payroll data from a three-year experience rating period. For example, for a mod factor calculated on Jan. 1, 2015, data would be used for the Jan. 1, 2011-2012, Jan. 1, 2012-2013 and Jan. 1, 2013-2014 policy periods. The data for the previous year (in this case, Jan. 1, 2014-2015) would be excluded.
Most employers realize their mod affects premiums in some way, but they rarely connect the dots and realize what actions they can take to lower their mod and insurance costs. That’s where we come in. We can introduce cost-cutting concepts you may have never heard before and put workers’ compensation insurance in a new light.
How we show our value
The mod is complex, but when you are able to use analytics to show what effect the mod has on your business, you will gain an edge over your competitors and ultimately save a lot of money.
We’ll start the analysis by showing you how low your mod (and associated premium) can be. Your “loss-free” mod—what the mod would be if there were no losses at all—is a number unique to your organization, an attainable goal and something you should be shooting for.
You may wonder what your competitors pay for workers’ compensation coverage. To answer that question, look at the “expected” losses portion on the mod worksheet. This column reflects the average losses for a company with a similar payroll. How do you stack up?
If you have many losses, even if they are minor, those losses will impact the mod more than if there were fewer severe losses. This problem often points to some sort of safety training or cultural issue that needs to be addressed. We’ll show you your frequency ratio—1.0 or higher needs attention.
We’ll also examine whether you have a severity issue, or a problem with not keeping losses medical-only. This almost always points to an opportunity for cost savings and often the need to establish or improve a return to work program. Losing manpower from injuries on the job directly affects your business’ earning power and bottom line.
Mod analysis will reveal problem areas, but fear not—we can deliver solutions. We will outline a clear strategy to help lower the most costly losses or target problem areas, whether they’re associated with a certain type of injury, body part, company location or other data.
What if you were to reduce your losses by 25 percent? Fifty percent? Even more? We can run the numbers to show you real long-term savings and exactly how you can attain them.
We can help tell your story
With the help of analysis, your mod tells a story—about where your business has been and what it can do to improve. With the power of our team, utilizing a leading software tool, we’ll analyze your mod and tell your story. Specifically, we can do the following:
- Calculate and project costs associated with the mod.
- Identify opportunities for improvement.
- Analyze what each specific loss costs you in terms of mod points and premium.
- Reveal cost drivers and the impact of the mod.
- Focus on problem areas, such as frequency or severity of injuries.
- Examine loss trends for types of injuries, departments and more.
- Isolate areas to target with loss control and risk management strategies.
By partnering with Tooher Ferraris Insurance Group, and experiencing Risk Synergy you can better understand factors contributing to your present experience modification and come up with a strategic plan to mitigate future costs. Call Tooher Ferraris Insurance Group today to learn more and get started!
On Dec. 5, 2016, the Federal Motor Carrier Safety Administration (FMCSA) issued a final rule that aims to improve roadway safety by establishing a National Drug and Alcohol Testing Clearinghouse.
Under the final rule, motor carriers and other employers of commercial motor vehicle (CMV) drivers must use the Clearinghouse to ensure that current and prospective employees do not have any unresolved drug and alcohol violations that render them ineligible to operate a CMV. Employers will also be required to report information about positive drug test results, alcohol test results greater than 0.04 blood alcohol content, refusals to test and other non-test violations of FMCSA’s drug and alcohol regulations.
These requirements take effect on Jan. 6, 2020, the date that the Clearinghouse is scheduled to become operational. Employers, CMV drivers
- Will allow motor carriers and other employers to identify drivers who are ineligible to operate a CMV.
- Will contain information about violations by employees who are subject to drug and alcohol testing under FMCSA regulations.
- Employers must use the database to ensure current and prospective employees do not have unresolved violations.
- Jan. 6, 2020—Employers must begin using the Clearinghouse and must also make manual inquiries with former employers.
- Jan. 6, 2023—Employers will no longer be required to request data from a driver’s previous FMCSA-regulated employers.
What information will the Drug and Alcohol Clearinghouse contain?
The Clearinghouse will contain records of violations of drug and alcohol prohibitions in 49 CFR part 382, subpart B, including positive drug or alcohol test results and test refusals. When a driver with a drug and alcohol program violation completes the required Return-to-Duty (RTD) process, this information will also be recorded in the Clearinghouse.
Who is authorized to use the Clearinghouse?
To access the Clearinghouse (once it is operational), a user must request access from the FMCSA by registering. Authorized users will include:
- Motor carriers and other employers with drivers operating CMVs that require a commercial driver’s license (CDL) or commercial learner’s permit (CLP);
- CDL/CLP drivers;
- Consortium/third-party administrators;
- Medical review officers;
- Substance abuse professionals;
- State driver licensing agencies; and
- Federal and state enforcement personnel
Will a prospective employee’s drug and alcohol violation history with Department of Transportation (DOT) modes other than the FMCSA be available in the Clearinghouse?
No. The Clearinghouse will contain only drug and alcohol program violation information for employees subject to the testing requirements under the FMCSA regulations in 49 CFR part 382. Employers must continue to request information from previous employers if an employee was subject to DOT drug and alcohol testing required by a DOT modal administration other than FMCSA (as required by §391.23(e)(4)(B)).
May employers report the results of non-DOT drug or alcohol tests to the Clearinghouse?
No. Only results of DOT drug tests, alcohol tests or test refusals may be reported to the Clearinghouse. While employers may conduct drug and alcohol testing that is outside the scope of the DOT testing requirements, positive test results or refusals for such non-DOT testing may not be reported to the Clearinghouse.
What actions will drivers be able to take in the Clearinghouse?
Drivers will need to log into the Clearinghouse in order to electronically consent to requests from prospective and current employers that need to access full details about any drug and alcohol program violations as part of an employment-related background check. This is the only valid method for an employee to respond to this type of employer consent request, and failure to provide timely consent may result in a driver being prohibited from performing safety-sensitive functions for that employer.
Drivers may log in to the Clearinghouse to view their individual driver record at any time. Also, if a driver chooses to engage a Substance Abuse Professional (SAP), he or she must select the SAP through the Clearinghouse to initiate the RTD process.
How are employers and Consortium/Third-Party Administrators required to use the Clearinghouse?
The Clearinghouse offers employers a centralized location to report drug and alcohol program violations and to check whether a current or prospective employee is prohibited from performing safety-sensitive functions, such as operating a CMV, due to an unresolved drug and alcohol program violation—that is, a violation for which the employee has not completed the RTD process. Employers must conduct this test, or query, as part of any pre-employment screening and at least annually after an employee is hired.
Employers may also use the Clearinghouse to designate a consortium/third-party administrator, which is a required step for any employer that employs him- or herself as a driver.
How are Medical Review Officers (MROs) and Substance Abuse Professionals (SAPs) required to use the Clearinghouse?
MROs must use the Clearinghouse to report verified positive drug test results and any driver refusals to take a drug test.
SAPs must use the Clearinghouse to report on the RTD status of drivers who are working to resolve any open drug and alcohol program violations. These reports include the date of completion of the initial assessment and the date the driver becomes eligible for RTD testing.
How will State Driver Licensing Agencies (SDLAs) use the Clearinghouse?
As of Jan. 6, 2020, SDLAs will be able to query the Clearinghouse prior to completing licensing transactions.
How will driver data be protected in the Clearinghouse?
The Clearinghouse will meet all relevant federal security standards, and the FMCSA will verify the effectiveness of the security protections on a regular basis.
Driver information will not be available to the public. Only authorized users will be able to register and access the Clearinghouse for designated purposes. The Clearinghouse will require authentication (username/password) to access records.
Drivers registered in the Clearinghouse will be able to access their Clearinghouse records at any time, and at no cost to them. Drivers will only be able to access their own information, not information about other drivers.
The FMCSA will only share detailed drug and alcohol violation information with prospective or current employers when an employer has requested and received specific consent from the driver. Drivers will be able to see the information that would be released to an employer before consenting to the release.
Driver information will be shared only with the FMCSA and other enforcement agencies as required to enforce drug and alcohol use testing regulations.
Does the final rule change any of the existing drug and alcohol program requirements in part 40?
No, the final rule does not change any existing requirements in the US DOT-wide procedures for transportation workplace drug and alcohol testing.
Source: U.S. Department of Transportation, Federal Motor Carrier Safety Administration
At most condo communities, a homeowners association (HOA) is equipped with an insurance policy that provides coverage for incidents that occur outside of a condo owner’s personal unit. This is commonly known as a master policy, and some condo owners wrongfully assume it is adequate enough to account for all incidents that occur in a shared area of the property, like lobbies, stairwells, pools and outdoor spaces.
However, in the event that damages from an incident exceed the limits of the HOA’s master policy, all condo residents may have to pay out of pocket for any losses, even if they were not at fault. To avoid this, loss assessment coverage is a critical add-on all condo owners should consider.
What is Loss Assessment Coverage?
Loss assessment coverage is an add-on to standard condo policies. It provides much-needed protection in instances where owners of a shared property are held responsible for a significant portion of the costs associated with a covered incident. Examples of this may include the following:
- A major hailstorm occurs and causes $550,000 worth of damage to the condo building. While the HOA has a master policy, it only covers $500,000 worth of damage, leaving all condo residents to pay for the additional $50,000 of uncovered damage out of pocket.
- A visitor to the condo property injures themselves on the tennis court. Unfortunately, their injury bills exceed the HOA’s liability coverage, creating a major financial burden for condo residents.
- A fire breaks out and destroys a large portion of the lobby. The HOA’s master policy isn’t adequate enough to cover all of the damages, and condo owners are forced to pay a portion of the repairs.
Simply put, loss assessment coverage provides a safety net for condo owners, ensuring they do not have to pay for incidents that occur to shared property and exceed the limits listed in the HOA’s master policy. What’s more, loss assessment coverage can apply to property damage, liability, injuries that occur on condo property or deductibles.
The amount of coverage you need will depend on the limits listed in your HOA’s master policy. To learn more, and to secure a policy that’s right for you, contact Tooher Ferraris Insurance Group today.
As a business owner, you strive to hire qualified employees to work for you. Unfortunately, as you are well aware, not every hiring decision goes as planned. Even if an employee is terminated for legitimate reasons— such as poor attendance or unsatisfactory work habits—every termination opens the door for potential lawsuits. Read on to learn from one business owner’s experience and find out how employment practice liability insurance (EPLI) can help protect you and your organization from costly, frivolous lawsuits.
“If you have employees, you will get sued”.Mary, Virginia Business Owner
When Mary, a Virginia business owner, received a complaint that her sales manager made crude, disparaging remarks to a female employee during a trade show, Mary took the claim seriously and conducted an investigation. During the course of her investigation, Mary spoke with another employee who witnessed the incident firsthand. According to this employee, the sales manager’s actions were offensive and harassing. Ultimately, after much deliberation, Mary fired the sales manager for his behavior.
Weeks later, the employee that witnessed the incident sued Mary for $500,000, claiming that after the incident, Mary had passed her up for promotion and assigned her poor sales territories, all because she came forward with the details of what happened at the trade show.
Although the lawsuit was groundless, Mary racked up hefty legal bills defending herself against the allegation.
Lawsuits like the one Mary faced can come out of left field and are much more common than you’d think. In fact, three out of five employers will be sued by a prospective, current or former employee while they are in business. EPLI can help mitigate these risks by providing the necessary resources to defend your company against a lawsuit or pay a claim.
As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. Call Tooher Ferraris Insurance Group today to learn more about EPLI and discuss your employment-related risks.