D&O, Fiduciary and Cyber for the JATC

Transcription

1 D&O, Fiduciary and Cyber for the JATC PRESENTED BY JARED BURRELL Agenda D&O and EPLI Fiduciary Liability Cyber Liability Risk Management 1

2 What Is D&O Insurance? It protects the JATC, its Board and any other named insured in the event of a Loss from any claim or claims made against the JATC due to a wrongful act that the JATC would be legally obligated to pay. This can include Employment Practices, Wrongful acts by officers, directors and instructors, Fiduciary liability, Internet liability, Work place violence liability, and Cyber-Security Liability. Directors and Officers(Philly and Ullico) This covers any actual or alleged wrongful acts such as Any error, omission, misstatement, misleading statement, neglect or breach of duty Personal & Advertising Injury which includes: False arrest, detention or imprisonment Malicious prosecution Libel or slander Violations of a persons right to privacy through oral statements or written publications Unauthorized use of title or Slogan Copyright or trademark infringement Wrongful eviction, entry or invasion of privacy Employment Practices Liability(EPLI) (Philly and Ullico) This covers the JATC in the event of actual or alleged Discrimination based on Race, Sex, or Age Sexual harassment Workplace harassment Violation of any federal, state, or local Civil rights laws Wrongful termination of employee Employment related retaliation Employment related wrongful discipline Breach of any employment contract Failure to promote 2

3 EPLI (Cont.) Third Party coverage for: Wrongful failure to employ Sexual harassment Discrimination Violation of any federal, state or local civil rights laws This applies to applicants, vendors, visitors and any other persons interacting with the JATC or those representing the JATC Fiduciary Liability Fiduciary Liability includes any negligent act, error, or omission and the breach of responsibilities, duties or obligations by a fiduciary Who is a Fiduciary? Philadelphia policy: : Trustees, employees, family members etc Ullico policy: Trustees, employees, family members etc(new!) Chubb policy: Trustees, employees, family members etc ERISA broadly defines "employee benefit plans" as any one plan, fund or program established or maintained for the purpose of providing to its participants or beneficiaries employee benefits. So the JATC trust named in the policy is a qualifying benefit plan Fiduciary Liability (Cont) The JATC is covered due to an endorsement Modified Fiduciary This includes any loss due to fines or penalties imposed under Section 502(i) and (l) of ERISA Elimination of Recourse prevents the company from subrogating against an insured trustee whose unintentional error causes a loss. This covers the JATC board and prevents the insurance company from recovering any funds from a loss from the Trustee personally It must be paid by the individual trustees! $0 deductible with Ullico $2500 deductible with Philly per Claim 3

4 Fiduciary (Cont) *Note Chubb is now also offering same insurance as Ullico Work Place Violence (Philly only) Covers any actual or alleged intentional and unlawful use of or threat to use, deadly force with the intent to cause harm to the premises Losses that are covered Business interruption expense Public image restoration expense(90 days) Public relations consultant Security consultant Forensic analyst Security guard service (30 days) Wages for individual victim and their temporary replacement(90 days) Who is covered by D&O? The JATC itself Officers, Directors, Trustees and Committee members All full and part employees including instructors The spouses, domestic partners, estates and heirs of the covered persons Anyone asked to serve on another board as part of their JATC duties 4

5 Additional Features of D&O Program Limit - $1,000,000 each claim. Standard retention or deductible is $2500 for Philly and the deductible is applied to the loss, except on a EPL loss. Then it is applied to the defense cost. Standard retention or deductible is $5000 on Ullico and applied to defense costs except for Fiduciary Standard retention or deductible is $2500 for Chubb and applied to defense costs Optional Duty to Defend, even if allegations are groundless or false Defense Cost does not erode the limit of liability payable for Damages (Philly Only) Full prior acts coverage if claim is not known prior to enrollment Additional Features of the Philly D&O Program(Cont) Non-monetary coverage for claims that do not include a demand for money but rather request reinstatement or re-admittance. This also includes coverage for EEOC proceedings (Philly only) Only non-monetary coverage for ERISA and EEOC violated damages are covered with Ullico Broad Severability with respect to the application Claims-made contract Broad Punitive Damages A. M. Best rates Philadelphia Ins. Co. (A++ IX) A.M. Best rates Ullico Ins. Co. (B) and Alterra Ins Co. (A) Tailored to the JATC organization Cyber Security Insurance 5

6 What is Cyber Security Insurance? Cyber Security Insurance covers the JATC in event of a direct loss, legal liability and consequential loss due to a breach in network or computer security from inside or outside the JATC. Provides cover for both first and third parties. Why do I need it? Laws governing Cyber Required to protect private information Required to notify individuals of breach Offline/Online content Federal Laws/State Laws/Regulatory Agencies/Future Laws Consumer Notification Laws HITECH State Notification Laws Required in 47 states 30 days to notify CISA CyberSecurity Information Sharing Act December 18, 2015 Why do I need it? Information is the goal Does you have information on employees and Apprentices? Personal information, corporate information, credit reports, background reports non-disclosure agreements or payment information in your computer?? Storage location is irrelevant if you collected it, you own it! 6

7 Why do I need it? We re not big 85% of attacks were towards small business or non profits Sophisticated Criminal Rings Firewalls and Virus Protection Software are reactive IT focuses on keeping out hackers. What about employee negligence? Cause of Data Loss 2015 Ponemon (62 breaches) 19% Negligent Insiders 49% Hackers/Criminal Attacks 32% System Glitch Cause of Data Loss 2014 Beazley (1500 breaches) 31% Misdirected s 24% Physical loss of records 13% Portable devices 11% Hackers Why do I need it? Threats Focus on the main Causes of Loss Ponemon, Verizon, Beazley, Symantec, IBM 19% - 53% Negligent Insiders 35% - 49% Hackers/Criminal Attacks 12% - 32% System Glitch Why do I need it? What would you do? What would you do if you had a breach? It is a complicated process! Forensics Legal Notification Public Relations Call Center Credit Monitoring Credit Restoration Fined if not reported ASAP. Some states require reporting within 5 days Fines are from $55k to $750k for late reporting 7

8 SOLUTIONS Risk Management Internet Module Risk Assessment Tools Policies and Procedures Vulnerability Testing Monitoring of Known IP Addresses Employee Training Online Compliance and Breach Response Information Newsletters and Notification About Key Legal and Regulatory Developments Incident Response Guides Transfer Cost to Insurance Risk Management In a Can! First Party Coverages Loss of Digital Assets Coverage (A) Non-Physical Business Interruption and Extra Expense (B) Cyber Extortion(C) Cyber Terrorism (H) Security Event Costs (D) Third Party Coverages Network Security & Privacy Liability (E) Employee Liability (F) Electronic Media Liability (G) Loss of Digital Assets Coverage Covers the JATC in the event that computers with protected data are stolen and the costs associated with loss of the information. Example: A lap is stolen from an instructor that has student information including SSNs and birthdates. What does the JATC have to do? 8

9 Non-Physical Business Interruption and Extra Expense Provides coverage to JATC in the event of a loss that prevents the JATC from conducting business. Example: If virus effected the ability of the JATC to continue to operate, how would the JATC provide students the ability to learn? Cyber Extortion Cyber extortion provides coverage to the JATC if attacks or the threat of attacks against the JATC, coupled with a demand for money to avert or stop the attack. Example: A hacker steals Employee data from the JATC computers and threatens to post the data for other criminals to use unless the JATC pays $200,000. Cyber Terrorism Cyber Terrorism provides coverage if the JATC is subjected to Internet based attacks in Terrorist activities, including acts of deliberate, large-scale disruption of computer networks, especially of personal computers attached to the Internet, by the means of tools such as computer viruses. 9

10 Security Event Costs Coverage to notify all affected parties Coverage to monitor the credit of all affected parties Coverage for crisis management Coverage for public relations Network Security and Privacy Liability Responds to third-party claims arising from a failure of a business' network security or a failure to protect personally identifiable information--also responds to regulatory actions in connection with a security failure, privacy breach or the failure to disclose a security failure or privacy breach Employee Privacy Liability Protects the JATC from claims arising from a failure of a business' network security or a failure to protect personally identifiable information of its employees by the JATC and Vendors the JATC may use Example: A payroll company transmits employee data to the wrong company. The JATC is responsible for any loss. 10

11 Electronic Media Liability Protects the JATC against claims arising out of the gathering and communication of information on the Internet. Electronic Media Liability provides very valuable against defamation and invasion of privacy claims as well as copyright and/or Trademark infringement. HR and Risk Management Employee Handbook Do you have one? Has it been updated? Are the policies in it followed no exceptions? Do you need one? Grimes JATC Beyond Insurance Process JATC IQRM (Risk Management survey) Free for all JATCs What is needed for applications Fiduciary Insurance 990s Most recent Financial Statement Directors and Officers Basic Financials Chairman s signature General Liability Daily Average attendance All other Factual information ie age of building, Vin#s, Payroll, addresses, etc 11

12 Contact Information Jared Burrell Direct: Cell: Melissa Garrett Office: