Category: Corporate Insurance
Cyber Insurance – Why it Makes Sense in 2019 & Beyond
There are nearly a million new malware attacks every day and 62% of these attacks are carried out on small and medium business enterprises. It takes nearly 200 days to even discover that a data breach has occurred!
In the modern internet era, it is data everywhere. Data is stored, retrieved and transacted across businesses and industry. A strong IT infrastructure at times appears too weak in the face of the onslaught of cybercriminals and hackers. Cyber security related issues are becoming a big source of threat, which can either make or mar the future. The after-effects of a data breach can be daunting to overcome and painful to recover from. Loss of face, customers, pride and confidence are some of the immediate reactions. The financial loss, compensation, and legal issues are the final nails on the coffin.
Estimated Loss sustained during wannacry outbreak
During May 2017, wannacry ransomware outbreak made companies lose more than $4 billion in just under a week, infecting over 30,000 machines across the world. We will not delve further into the intricacies of the vulnerability or the technical details behind it, but rather focus on how cyber insurance can help companies tackle such attacks and overcome them with peace of mind.
How does Cyber Insurance help?
Data breach or loss or leakage of customers’ personal data is ground for hefty penalties in several countries. Privacy of data is to be ensured at all costs. Therefore, to minimize losses, under cyber insurance policies, insurance companies provide the services of a crisis-management team, (experts in cyber security), immediately when a data breach is noticed. The crisis management team arrests the further slide of data, plugs loopholes in the system, attempts to repair and rebuild company reputation and estimates the losses suffered or the costs associated with the breach.
Cyber liability cover gives both First-party and third-party. First party coverage is the loss and expenses sustained by the holder of the policy, while third-party coverage protects victims of data theft or other cyber-crimes. Cyber insurance helps a company cover the costs of compensation, penalties and the expenses associated with data protection and data retrieval. Apart from this, claims arising out of the failure of the victim to secure personally identifiable information of a third party are also covered. Regulatory actions, privacy breach and failure to detect or disclose a security failure are some of the other issues covered under cyber insurance. Even the notifications, public relations exercise (For example, informing customers not to panic or that their data and money is safe etc.), legal guidance are all included in the coverage.
The outage period or interruptions and the loss sustained due to such interruptions are covered. Ransomware infections lock a computer and demand a ransom amount to get them ‘unlocked.’ This ransom payment is also covered under cyber insurance.
The outlook for the next decade
As we get more and more electronically connected, cyber threat is real and is here to stay. It all depends on how an organization copes up with it. The effort should be to minimize the financial and other implications of the cyber attack. The ability of the organizations to make informed decisions prior to the attack and their preparedness for facing any eventuality is the key to successful crisis management. An appropriate cyber insurance policy will help you tide over the crisis with ease.
At NAIB, we know the importance of sensitive data and how it affects your business interests. Our comprehensive range of cyber security schemes covering network security, cyber liability and privacy for first and third party risks shall help you sail through the risks associated with cyber threats at competitive rates.
A guide to insure your organization’s electronic equipment
Electronic Equipment Insurance is an insurance policy that applies to low power/voltage equipment. It covers the owner, hirer or the lessor for the cost of accidental or unforeseen material damages to the said equipment(s).
What equipment can be covered under an EEI policy?
The policy owner must understand that the insurance covers only a particular set of electronic equipment. Many insurance companies call these equipment “silent” operating systems because the internal parts do not make much noise under operation. Examples of such “silent” electronic equipment include:
- Power management equipment like Voltage stabilizers, UPS, etc.
- Computer and related peripherals
- Medical equipment like an X-ray machine, Ultrasound Machines, Cath Lab, etc.
- Telecommunications equipment
- Control panels
- Televisual equipment
- Navigational equipment
- Electronic equipment for research
The Electronic Equipment policy not only covers hardware but also the cost of software that was installed on the machine. Thus, having Electronic Equipment insurance will help the organization safeguard its capital from unexpected losses.
To get adequate coverage, providing detailed information up front about the equipment to be insured and how and where they are being operated is essential. The following is the list of specifics that the insurance companies typically ask from the organization to determine coverage and premium amounts:
- The model and make of the equipment
- Type of machinery
- Type of industry
- Experience of the industry
- Replacement value of the equipment
- Application and/or usage of the machinery
- Estimated cost of the restoration of data
- Professional experience of the workers handling the equipment
- Standard of management
What events can result in a claim under an Electronic Equipment Insurance policy?
When you choose Electronic Equipment Insurance, it is critical that you know what types of damages are covered against the policy. Let us review the types of damage that are typically covered by EE insurance.
- Fire, lightning, and explosion
- Mechanical or electrical breakdown
- Flood or water damage
- Smoke or corrosive gasses
- Electrical damages like short circuits
- Natural calamities like storms, cyclones, or any other atmospheric disturbances
- Theft or burglary
- Damage caused by the failure of air conditioning equipment
- Human errors like faulty operation, careless/negligent operations
- Riot, strikes and malicious damage
- Environmental factors like water, humidity and environmental contamination
In case of a claim, the Electronic Equipment Insurance covers the replacement of the parts, the cost of the total work hours spent on repairs, cost incurred to restore information/data and even freight charges. There are different levels of these plans, so based on the type of the insurance that you choose, the benefits will vary.
Who is it for?
After reviewing the basics of Electronic Equipment Insurance, it is clear that the insurance policy is beneficial for organizations that house several electronic machines. Since the majority of industries today use electronic machines like computers to streamline and coordinate projects, it is advised that you cover them with a robust insurance plan.
If you are wondering whether you should insure your electronic equipment or in the process of selecting Electronic Equipment Insurance for your organization, let us review the specific variables in your case and help you make a decision.
Workmen’s Compensation or Group Life: which to choose and why?
Workmen’s compensation and group life insurance policies are essentially rewarded packages that are beneficial for both the employees and employers as it helps employees to replace income at minimal cost to employers at the time of need. We will describe the benefits of both workmen’s compensation and group life insurance and highlight the differences so you are able to assess what reward package makes the most sense for your company.
What is Workmen’s Compensation Insurance?
Workmen’s Compensation Insurance also known as Employer’s Liability insurance is a liability policy to compensate employees for bodily injury or death due to accidents or occupational disease arising out of and during the course of employment.
In the UAE, the Federal Law has mandated employers to provide employees with medical, disability and death benefits for any accident, injury or death caused at or by the workplace. Without adequate cover, your company may be liable for large payouts encompassing medical, loss of earnings and related costs.
At the time of a claim, the payout of the policy depends on the medical bills and other claim documents submitted to the insurance company subject to the agreed terms and conditions stipulated in the policy.
What is Group Life Insurance?
Group life insurance policy is a life insurance product to cover a group of people under a single contract. Just like workmen’s compensation policy, in a group insurance contract, the policy owner is the employer or an organization, and the policy covers employees or members of that particular organization.
A group life Insurance differs from workmen’s compensation as it provides a lump sum payment, as opposed to payments based on claims with specific limits, in the event of an employee’s death or permanent disability due to accident or sickness.
While not mandated by law in the UAE, group life insurance is one of the best ways in which an employer can instill a sense of security in the minds of the employees. Most employers often pay for the basic group life insurance themselves without burdening the employees. If the employees want additional benefits like critical illness coverage, then they may pay extra for the supplemental benefit.
Another advantage of group life insurance is that it is not territorial like workmen’s compensation insurance. Employees are eligible for the coverage worldwide, including their home country. In addition, the group life covers employees 24 hours a day, 7 days a week, 365 days per week. In short, employees are covered whether they are on duty or off duty, unlike basic workmen’s compensation policies which cover employees only during working hours.
In UAE, the employer can opt for a group insurance policy provided there is a minimum of 11 members working for the company.
So what should you choose for your employees?
Workmen’s compensation in case of a work-related accident is mandatory in UAE and an insurance cover is the most cost-effective means for an employer to meet this potential liability.
However, for a low cost, your company can opt for group life insurance that enables comprehensive coverage for your employees thus strengthening your image as a caring employer which in turn helps with employee retention. There are some group life covers that can also help you meet your workmen’s compensation obligations as required by the Federal Law.
Still unsure on which insurance coverage to choose for your business? Our expert panel is here to help you sort things out. Get in touch with us or leave an email, we will get back to you promptly.
5 Most ridiculous lawsuits of all time
Mentioning lawsuits brings images of charged courtrooms buzzing with activities of Lawyers in gowns and wigs trading constitution quotations.
Grand endings of condemned prisoners waiting for henchmen or corrupt bankers being led to the black maria are other dramatic images that lawsuits conjure up in our minds.
Ever heard of ridiculous cases? Cases of seemingly irrational charges that often end up in favor of the case pursuant? You are about to be re-educated with the 5 mind boggling lawsuits and upon reading agree with us that protecting oneself from various business risks is a need and not a good to have.
- In 2013, Benjamin Careeathers sued against Red Bull energy drink company for false claims of ‘giving wings’ to Red Bull consumers in their adverts and apparently won the case for the American citizens. A whooping sum of 13 Million USD was settled for the settlement of the little ad clause that deceived the public just for the crime of three misinterpreted words ‘Gives You Wings’.
- Walking into objects is a sore accident that can cost you a good amount of money for treatment but walking, texting and bumping into an orange colored ladder in the United States can as well get you a 161,000.00 USD benefits from the jury system in the United States. Imagine the surprise of the defending company when they were ordered to pay such ridiculous amount of money to Detoya Moody in 2011 for such a claim.
- Cleanthi Peters sued universal studios for 15,000.00 USD for extreme fear, mental anguish and emotional distress due to her visit to universal studios’ Halloween horror nights haunted house. Whatever she hoped to get in a Halloween haunted house?
- Mcdonalds had a legal battle with 79 year old Stella Leiback for making their tea too hot and when you think you have seen it all and you are clearly heartbroken…….
- Robert Lee Brock sued himself for 5 million USD for larceny, breaking and entering, getting drunk and committing other crimes which landed him 23 years sentence. He had hoped the state would have to pay since he was in their custody (in jail) and wasn’t earning any money.
In every business, there is always that tiny possibility of answering miscellaneous charges which will likely have legal fees and possible compensation for damages if the case is sustained and won. These charges can against your business can come from within and with out. and the consequences are expensive.
There are various types of corporate insurance that takes the financial responsibility of accidents/errors and resultant legal challenges that may befall companies. Some of these insurance products include professional indemnity insurance, product liability insurance, fleet insurance, workers compensation and more. Any of these challenges can send a company to the brink of bankruptcy.
Insuring assets and potential liabilities are decisions made by well advised business owners who understand the importance of managing various risks. You can never be too prepared for accidental happenstance. One might be tempted to self-insure (saving little amount of money daily or weekly for accidents) but the figures needed to provide adequate coverage is in certain cases, way above the capacity most small businesses and in relative contrast, Insurance premiums are way cheaper to maintain.
How Key Man Insurance can help protect the life of a business?
In every business, there is always the most productive employee that pilots the business affairs, the person whose exit will shake the business to its core foundation……. That person is the business’ KEYMAN.
Most people are familiar with life insurance policy and how it compensates the insured family in the case of demise. However, not so much is known about the Key man insurance policy that keeps business running in event of loss of the business propeller, the key employee.
Keyman insurance helps a business recover from the loss of her front man. Individual talents in businesses varies and so does their input and output which when converted to relevance, makes certain persons the rear head of the firm after the business owner. Every business has a number of people who contribute significantly to the running and growth of the company. Its only sensible to insure against untimely demise of such individuals to keep the business from total shut down when such key employee is no more.
Keyman Insurance is an insurance policy where the premium payer is the employer, the life to be insured is that of the employer’s most valuable employee (keyman) and the benefit, in the case of claims, goes to the employer to use in keeping the business running and operational in event of the demise of the insured employee.
There are numerous benefits of insuring a company’s keyman and as far as the list goes, no single reason is less beneficial in the insurance chain. The advantages can not be emphasized and the absence of it can have fatal consequences.
- Keyman insurance protects businesses against financial shutdown in event of unfortunate death of the key person.
- The directors can also safeguard their immediate family from getting affected by the various business cycles the business has to encounter.
- Such heightened sense of importance will boost the morale of the insured employee which will readily convert to higher productivity and helps secure his stay in the company.
- It helps in keeping the price of the company’s shares stable in case of death of the keyman. If investors are assured that any financial loss from change of management as a result of the death of their usual go-to person, they wont have to start discharging their shares immediately after the death of such person.
- It places a high value to a keyman insured company. In the case of a business that is being put up for sale, prospective buyers are more likely to put a higher value to the company if they know that it has a monetary back up to meet the replacement of its key employee.
When a company purchases a life insurance policy on the key employee, pays the premiums and have the benefitting rights to that policy, when the insured key person dies, the company receives the insurance pay off. The reason this insurance is of utmost importance is because the death of a key person in a small company often causes the immediate death of the company. The basic reason for the key man policy is to help the company survive the tragedy of loosing the person who pilots the business. The company can use the proceeds for expenses until it can find a replacement or in some dire situations, gives the company some options other than outright bankruptcy.
