Crime Insurance

Keeping your trade secrets a secret

Protecting your information and preventing leaks

If your company’s unique formula, recipe, or manufacturing process sets you apart from everyone else on the market, you have a trade secret. Unfortunately, secrets are hard to keep.

We’re not talking intellectual property protected by patents and copyrights. Trade secrets are technical information that gives you an economic edge, or the potential for one, over the competition. These can be techniques, processes or formulas. Most companies take steps to protect themselves from patent and copyright infringement, but many mid-sized firms neglect to take steps to secure confidential and sensitive information, such as trade secrets, business strategies, financial records, customer data, and employee contracts terms.

All of these are valuable assets to your company and need to be safeguarded. There is a colocation here which is a flexible solution giving organizations the space, connectivity and security they need for their servers.

Where leaks occur

Sadly, research shows that employees are the biggest source of confidential information misappropriation. Attorneys at O’Melveny & Myers say 78 percent of cases between 1995 and 2009 involved defendants who were either employees or former employees. Third-party contractors and service providers were involved in 20 percent of thos??e cases.

Ownership of trade secrets aren’t protected by law the same way patents and other intellectual property are. However, individuals and competitors can be sued in civil court under federal laws , such as the Economic Espionage and Computer Fraud and Abuse Acts.

 The rise in trade secret litigation surpassed that of other trademark and other intellectual property infringement cases by double-digits in 2013, according to American Intellectual Property Law Association.

 Taking steps toward protection

Chances of successfully proving legal ownership of confidential information and trade secrets improves drastically if you have taken reasonable steps of protection.

Protection begins at home.  All employee and contractor agreements should include policies on non disclosure clauses for proprietary, secure, sensitive information. The best security is maintaining a strict need-to-know policy, sharing sensitive information only with those who have signed a nondisclosure agreement. All employees should be given intellectual property security training upon hire. It doesn’t hurt to update and review that training annually.

We encourage you to call one of our Sadler insurance experts at 800-622-7370 if you have questions about intellectual property and trade secrets. They’ll be happy to provide answers and discuss the insurance needs of your unique business.

Source: Matt Dunning, “Trade Secrets,” Business Insurance. 16 Mar. 2014

1.00 avg. rating (47% score) - 1 vote
Categories: Advertising Injury, Breach Of Security, Intellectual Property Infringement, Theft

Who doesn’t need cyber insurance these days?

Large and small businesses risk security breaches

We might as well call them artists because their creativity knows no bounds. Cyber criminals are constantly outsmarting software developers and IT professionals.

The average annual cost of a cybercrime in the U.S. is $8.9 million, according to a 2012 study by the Ponemon Institute. That’s an increase of 6 percent over the prior year. The number of attacks are also on the rise. Each of the study’s 56 participating companies experienced an average 1.8 successful attacks per week.

Company data, not company size matters

These facts and the seemingly ceaseless headlines of high profile business breaches such as the Target’s are causing businesses to purchase cyber coverage. Only a few years ago, about 20 percent of larger companies buying cyber coverage. Today it’s about 50 percent, according to John Kerns, executive managing director for Beecher Carlson.

As IT professionals struggle to keep up with the risks, they’re encouraging companies to get coverage. The type and amount of data that financial, healthcare and retail businesses store put them most at risk. However, many small businesses also have lots of valuable data that makes them a target. They can also be at risk from hacker, user errors, or employee breaches.

Loan protection insurance is designed to help policyholders by providing financial support in times of need. Whether the need is due to disability or unemployment, this insurance can help cover monthly loan payments and protect the insured from default, check the type of loans in gtrWALLET. The loan protection policy goes by different names depending on where it is offered. In Britain, it is often referred to as accident sickness insurance, unemployment insurance, redundancy insurance or premium protection insurance. These all provide very similar coverage. In the U.S. it is usually called payment protection insurance (PPI). The U.S. offers several forms of this insurance in conjunction with mortgages, personal loans or car loans.

Loan protection insurance covers debt payments on certain covered loans if the insured loses their ability to pay due to a covered event.
Such an event may be disability or illness, unemployment, or another hazard, depending on the particular policy.
Costs for these policies may vary by age as well as factors such as credit history and amount of debt outstanding.
How Does Loan Protection Insurance Work?
Loan protection insurance can help policyholders meet their monthly debts up to a predetermined amount. These policies offer short-term protection, providing coverage generally from 12 to 24 months, depending on the insurance company and policy. The benefits of the policy can be used to pay off personal loans, car loans or credit cards. Policies are usually for people between the ages of 18-65 who are working at the time the policy is purchased. To qualify, the purchaser often has to be employed at least 16 hours a week on a long-term contract or be self-employed for a specified period of time.

There are two different types of loan protection insurance policies.

Standard Policy: This policy disregards the age, gender, occupation and smoking habits of the policyholder. The policyholder can decide what amount of coverage he or she wants. This type of policy is widely available through loan providers. It does not pay until after the initial 60-day exclusion period. The maximum coverage is 24 months.

Age-Related Policy: For this type of policy, the cost is determined by the age and amount of coverage the policyholder wants to have. This type of policy is only offered in Britain. The maximum coverage is for 12 months. Quotes might be less expensive if you are younger because, according to insurance providers, younger policyholders tend to make fewer claims.

Getting smaller companies on board

Most smaller companies don’t retain a legal teams and therefore aren’t kept up to date on  privacy regulations that can leave susceptible to a lawsuit. Many also don’t realize the services that are added to this type of coverage. Risk management is one such service that  provides professionals to deal with a breach. “With the coverage, you can have the panel already there for you and you know they can bring vetted resources to the table right away,”    explains Lisa Doherty, president of Business Risk Partners.

It’s so easy to get a quote

Carriers are requiring less information these days to provide a Cyber Insurance quote as their comfort level grows with this new policy type. For many smaller business types, carriers can provide a Cyber Risk quick quote indication if you provide the answers to as few as five questions.

Source: Amy O’Connor“As Cyber Crimes Increase, so do Coverage Options,” My New Markets, 13 Mar. 2014.

4.00 avg. rating (77% score) - 1 vote
Categories: Breach Of Security, Crime, Cyber Liability

Liability of 21st century medical technology

Two industries collide

Advances in both medical and digital technology have been taking place at lightning speed for the last 20 years or more. Generation X and the Millennials have no concept of life without the Internet, iPods, GPS navigation, DNA testing, laparoscopic and a million dollars laser surgery, and alternative methods of conception.

From your digital medical records and prescriptions to remote-controlled robotic surgeries, just about everything in medicine is enhanced by if not dependant on wireless technology.

Why Should I Get Health Insurance?

Broadly, there are two reasons to have health insurance:

  • Health insurance supports you if you get sick, we recommend the best life insurance Canada offers to its citizens
  • Health insurance helps you avoid getting sick to begin with

Let’s look at each of these reasons in more detail:

Health Insurance as a Safety Net

It’s important to have health insurance as a safety net. If you unexpectedly get sick or injured, health insurance is there to help cover costs that you likely can’t afford to pay on your own.

Health care can be very expensive. It can be an enormous financial burden. Surgery, emergency care, prescription drugs, lab work, scans and examinations – these sorts of costs can add up very quickly. They can even be high enough to cause individuals to go bankrupt, or to turn down care that they need but can’t afford out-of-pocket. Speaking of personal budged, fortunately thehealthmania provides the latest drugs and healthy supplement reviews in a daily basis, so you don’t get scammed.

But, with health insurance, you’re not facing those costs as an individual; there’s an insurance plan helping you cover the costs, and helping you navigate the confusion of medical billing.

Let’s face it, medical bills aren’t the sort of thing you want to be dealing with while ill, injured, in a hospital bed or the emergency room. It’s smart to make difficult financial decisions ahead of time, by getting health insurance before you get sick.

Preventing Illness

The other reason it’s important to have health insurance is that it makes it easier for you to keep from getting sick in the first place.

Having health insurance makes it easier for you to access – that is, find and pay for – routine and preventive health care. This includes:

  • Annual checkups
  • Vaccinations (flu shots, MMR, etc.)
  • Blood tests and lab work
  • Scans and screenings

These all play a role in keeping you healthy, and diagnosing any illness you might have as soon as possible.

21st century risks

You’re in a minority if your computer or cell phone has never been exposed to spam, hackers, viruses or software and hardware malfunctions. These can result in simple headaches or serious financial and security breaches.

And so it stands to reason that the digital medical devices so many depend on to keep them healthy, or even alive, are also susceptible to the same risks. For example, pacemakers and other implanted devices collect and transmit valuable data from patients to their doctors. Few if any have encryption or defensive mechanisms in place.

Electronic implants, patient medical data monitors,  electronic insulin dispensers and online diagnostic apps are only a few of the new generation of wireless technologies that, if breached, could expose manufacturers, developers, software companies and others to liability lawsuits.

Will the insurance industry advance just as quickly?

So far, it hasn’t. Insurers currently focus on tangible medical products. But medical devices and smart technology, with particular regard to software and apps, are now nearly one in the same. Adding to the problem is the fact that product liability laws differ among jurisdictions.

The Food and Drug Administration is expected to release regulation recommendations addressing the merging worlds of medical and pseudo-medical devices. New regulations in this area will surely affect the health insurance in my state and any other.

Source:Graeme Newman, “Technical and Medical Device Convergence,”  Insurance Journal. 24 Feb. 2014

1.00 avg. rating (47% score) - 1 vote
Categories: Breach Of Security, Crime, Cyber Liability
The Need of Cyber Risk Security Breach Insurance

Derivative Lawsuits Expose Officers

The need for D&O insurance

The recent hacking of customer credit information at Target Corp. triggered more than 40 lawsuits, with more sure to follow. It’s almost guaranteed we’ll be seeing more such breaches in the months and years to come as the tactics of cybercriminals evolve at an alarming rate.

 Suits against Target were filed with lightning speed on the same day the data compromise was announced, an indicator of the aggressiveness of the plaintiffs’ bar to quickly litigate.

Class action lawsuits (Cyber Risk Insurance) vs. derivative lawsuits (D&O insurance)

 Some of the initial lawsuits filed against Target allege general wrongful acts and negligence that can impact entity coverage under Directors & Officers (D&O) insurance policies, according to William Um, policyholder counsel at Hunton & Williams LLP. Even though companies may already have cyber attack coverage, data breaches still affect D&O policies.

 It’s likely that customers filing class-action suits due to falling share prices will be the source of the most serious trouble for companies. However, shareholders filing derivative lawsuits are on the rise and for various legal reasons insurers are more likely to pay damages for derivative lawsuits out of the Side A coverage under a D&O policy. And suits against public companies will likely rise further now that the U.S. Securities and Exchange Commission is pushing disclosure of data breaches.

“It’s interesting that not all the cyber risk D&O cases are now being brought as stock-drop cases,” said Ann Longmore, executive vice president of FINEX North America, a unit of Willis Group Holdings.  “Now, a number are being filed as derivative actions.”

 Allegations vs. possible outcomes

 The suits allege that Target negligently breached duties owed the plaintiffs and class members resulting in their personal information being compromised. They also cited the time and expense required to cancel debit/credit cards, activate new cards and set up new automatic payments on these new cards.

Class-action plaintiffs may have trouble trying to prove that the breach led to compensable damages. Even though the customer’s data was accessed by an unauthorized entity doesn’t mean that damages resulted. However, that probably won’t always be so. “As plaintiffs get more shots at the apple, they are getting better at trying to allege compensable harm,” said Um.

 For the defending companies, D&O policies may help. But it’s best that the immediate costs of cyber compromises be handled through dedicated Cyber Risk policies. Cyber insurance alleviates the stress of managing the claim.

 Visit Sadler Insurance for Techs for more information on corporate cyber safety, the potential impact of a breach and other cyber risks.

Source: Bill Kenealy, “Data breach litigation,” Business Insurance, 19 Jan. 2014.

2.00 avg. rating (57% score) - 1 vote
Categories: Breach Of Security, Crime, Cyber Liability, In The News

Hackers Cash-in on retailers’ peak season

Companies letting their guard down at just the right time for just the wrong reason

Many people like to take time off from the office around New Year’s, but the holidays are simply not the time for companies to let Cyber attacktheir guards down. A security breach can devastate a business and easily cost much more than a few dozen sales.

While people are out shopping the end-of-year sales, taking vacations and celebrating, hackers are taking advantage of corporate downtime. The susceptibility stems from companies being lax in changing website and mobile app codes.  That’s because companies may fear that their systems would break during peak traffic with many programmers on vacation, said John Kindervag of Forrester Research.

Hacker heydays

Hackers caught onto this yearly security gap long ago. By allowing themselves to go less protected, many companies have created the optimal climate for cyber criminals to enjoy a peak season of their own.

Some of the companies involved in the recent data-security breaches are Skype (Microsoft Corporation), Snapchat, Inc. and the discount retailer Target Corporation.

As 2013 drew to a close, criminals targeted a wide-range of companies across the U.S. The personal data and confidential information of their customers leaves millions of Americans vulnerable to identity theft and crimes. Such breaches cost these businesses many millions of dollars last year in legal settlements. Companies spent 5.1 percent of their information-technology budgets on security in 2013, up from 4.7 percent the previous year, according to research conducted by Gartner.

The highly publicized Target data-security breach last December affected more than 40million credit and debit card customers during the busiest time of year. The fallout of the incident includes the loss of many loyal customers and damaged consumer confidence.

The best defense is a good offense

Industry insiders recommend companies increase their defenses during the busiest season and be on high alert during the holidays. Businesses of all sizes can protect themselves and their customers from cyber crime by

  • staggering IT department vacation days for uninterrupted technical support coverage
  • stepping up data-security efforts during busy periods
  • ensuring security measures remain consistent
  • promoting cyber-risk awareness
  • educating staff on risks and ways to help prevent them.

Of course cyber hacking is a 365-day operation. To outmatch cyber-criminals 24/7, a stringent year-long approach to security should be in place.

Please visit Cyber Risk Insurance for more information on preventing hacking or Cyber Risk insurance.

Source: Sarah Frier and Peter Burrows, “Companies More Vulnerable,”, 03 Jan. 2014.

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Categories: Breach Of Security, Cyber Liability, Identity Theft

Why Cyber Criminals Intentionally Target Small Businesses

Risk management controls are essential

Cyber attacks on small businesses with less than 250 employees have tripled since 2011, according to Symantec’s 2013 Internet Small business hackerSecurity Threat Report. The reasons that small businesses are becoming more popular with cyber criminals are simple:

Compared to larger businesses, smaller businesses have limited or no cyber risk management controls and usually don’t have a dedicated risk manager.

New cyber thieves use small businesses as a training ground to prepare for later attacks on larger businesses. Furthermore, smaller businesses often grow through mergers and acquisitions and are frequently connected to larger businesses.

Taking on small businesses allows cyber criminals to avoid undue media attention.

Many smaller companies have valuable intellectual property, such as trade secrets.

The purchase of Cyber Risk policies is starting to pick up steam in the small business community. Many General Liability carriers are now offering Cyber Risk endorsements for as little as $500.


Source: Elisabeth Boone, “Cyber Liability: Small Business, Big Exposure,” Rough Notes Magazine, August, 2013.

4.00 avg. rating (77% score) - 1 vote
Categories: Breach Of Security, Cyber Liability, Identity Theft