The three most famous houses for risk exposure are the one made of straw, the one made of sticks and the one made of bricks -- occupied by our friends, the three little pigs. These three houses face extreme local straight-line wind exposure courtesy of the Big Bad Wolf. The key lesson taught by this fable is that the better prepared you are for risk exposure, the more likely it is that you’ll come out on the bright side after the risk has passed. Unfortunately, we see every day that some children and many adults did not heed this moral. While no one provides Wolf-Based Wind Scores (WolfHubTM), it is now possible to find risk scores on just about every other bad thing that can happen to your home or business. We are strong believers in the power of mitigation. After all, many times you can't just up and move from your location. But to know what to mitigate for, you have to understand the risk around you. Like the first two little pigs, most people don’t understand the risks around their property, and let's not overly reward the third little pig. While he certainly did mitigate for Wolf-Based Wind, building his house near a forest potentially exposed him to wildfire. Seeing that he was planning on farming, there had to be a body of water nearby for irrigation, exposing his house to flooding, as well. Lack of knowledge is the leading cause of hazard loss. See also: 4 Steps to Integrate Risk Management   That’s why we provide www.freehomerisk.com. So anyone in the U.S. can get a better understanding of the hazards that affect their property. For example, this address in Miami, 701 South Miami Ave., returns a risk identification report like this: All of the hazards lit up in green are hazards that are applicable to that specific address. Not every address will have every hazard, as hazards are regional in nature. For example, Florida sinkholes only happen in Florida, while tsunamis only happen to places with exposure to the Pacific Ocean. Once you’ve identified the risk types to be aware of you, can investigate further by getting the Risk Exposure Report Card, with grades specific to the address. For 701 South Miami Ave., Miami, the Risk Exposure Report Card looks like this: As you can see, at this address you (and the three little pigs) have a lot more to be concerned about than just Wolf-Based Wind.

From the day a business opens its doors, it is exposed to a variety of risks. Owning an art business is no different. The first thing any owner should do is make sure to have sufficient insurance in place to provide financial protection. For those invested in their art inventory or art-related risk exposure, it is important to consider the risk factors, including the financial risk exposed to your business as a whole. Good insurance programs are created by brokers who interview their clients and tailor the insurance policies to their needs. Remember, communication is key. Below is a list of some of the possible coverages business owners may need to help protect their art and business. 1) Building Insurance If you own a building, coverage should be for the standard “all risk” perils on a replacement cost basis (no deduction for depreciation). Check the co-insurance clause to be sure you are carrying the proper amount of insurance. If possible, the “agreed amount” endorsement should be attached, which eliminates any possible co-insurance penalty at the time of a loss. Deductibles are available to lower premiums. Building insurance usually excludes boilers, machinery, air conditioning equipment and outdoor swimming pools. Boiler insurance can be purchased separately. Flood and earthquake are normal exclusions in most property policies, but these perils can sometimes be insured - usually under separate policies. 2) Contents Insurance On a standard “all risk” basis to business equipment, drapes, leasehold improvements, equipment (your telephone system if you own it), etc., coverage is usually written on an actual cash value basis. Ask about replacement cost, and check the co-insurance clause to be certain you are carrying the proper amount of insurance. Coverage may be limited to the premises named in the policy, and generally, office contents insurance is not designed to cover personal property of partners and employees (coats, wallets, money, jewelry, etc.). 3) Papers and Records Replacement Insurance Standard “all risk” coverage provides for reimbursement of the cost to reproduce books of account and other business records. 4) Library Insurance Standard “all risk” insurance covers the cost of reproducing or replacing books and manuscripts. Those items that cannot be reproduced or replaced should be reviewed to add to your fine art insurance policy. 5) Computer Insurance A special computer policy is available to insure the hardware, software and extra expenses, which covers the additional cost to continue operations following an insured loss. 6) Rental Value If you own a building and rent a part or all of it to others, you can insure for the rent you lose while the building is untenantable because of an insured loss. Check the co-insurance clause on rent insurance to be certain you are carrying the proper amount. 7) Leasehold Interest Insurance If you lease your office premises and such lease agreement has a cancellation clause in the event of a catastrophic fire, you would find it necessary to lease other premises at potentially higher rental cost per month. Leasehold interest insurance can be purchased to protect you against the difference in your rental cost—up to the time your previous lease would have normally terminated. 8) Extra Expense Insurance This provides reimbursement of extra expenses incurred to keep your business going as fully as possible after an insured loss has occurred. Some forms of this insurance are written with a monthly time limitation. 9) Plate Glass Insurance If you own your building, you can elect to insure against plate glass breakage. If you do not own the building, your lease agreement may require you to carry plate glass insurance (if there is a plate glass exposure). The cost to re-letter glass can also be insured. See also: Future of Insurance: Risk Pools of One   10) All Risk Floaters Coverage is available to cover camera equipment and valuable works of art in your offices, and camera equipment, computer equipment and similar property you take away from your office premises. 11) Account Receivable Insurance If your records of accounts receivable were destroyed, you would have no record of outstanding accounts on which to collect monies due to you. Accounts receivable insurance would reimburse you for these outstanding accounts. 12) Business Interruption Insurance For loss of earnings, insurance is available to reimburse you for the profits you would lose while your business is closed as a result of an insured loss. The insurance can be arranged to include reimbursement for payroll and other continuing expenses. 13) Blanket Bond Blanket bonding is available to cover all employees and partners. The Employee Retirement Income Security Act of 1974 requires that trustees of your pension plan be bonded. 14) Money and Securities The basic contents insurance limits or excludes coverage on money and securities. Specific protection is available to cover both on and off your premises, for example, a messenger going to the bank. Underwriters would be interested to know if you have a safe (type and model). Also, let the a broker know how much you usually have on hand in cash and how much in checks— this can make a difference in the premium. 15) Depositor’s Forgery Coverage Banks are responsible for any forged instruments they accept. However, their insurance is usually purchased with a large deductible. Depositor’s forgery offers protection to retain the goodwill of your banking connections and to avoid discussions with the bank in the event of a loss. It covers loss resulting from forgery of checks and other documents issued by your firm. 16) Comprehensive General Liability This is for protection against third-party bodily injury and property damage claims related to your premises and operations necessary and incidental thereto. Employees should be included as additional insured; if you lease, the lease agreement may also require the landlord to be named. 17) Medical Payments Insurance Medical payments insurance is available in connection with comprehensive general liability to provide reimbursement of medical expenses for a third party injury on your premises regardless of your legal liability. For instance, a client trips over his own feet, falls and cuts his hand. While not legally liable, you may want to offer to pay his doctor bills. Medical payments would cover this exposure. 18) Professional Liability This provides coverage for direct pecuniary loss and expense arising from claims for alleged neglect, error or omission in the performance of services in a professional capacity. Policies usually carry a mandatory deductible clause. 19) Foreign Liability It is important to note that most liability insurance policies are limited to claims within the U.S. and Canada. If you have operations overseas, your liability insurance should be extended to cover worldwide. Each country has specific insurance requirements. You should check for insurance laws that are local in your business operation. 20) Products Liability If you are involved in the selling, distribution, serving or give-away of any type of product, products liability should be purchased for protection against product claims. 21) Personal Injury Liability This is important protection against claims involving false arrest, detention, malicious prosecution, libel, slander or defamation of character. 22) Fire Legal Liability If you do not own the building you occupy, the owners or building management could hold you legally liable in the event of fire damage to the building premises caused by your negligence. 23) Contractual Liability Any contracts you sign should be reviewed by your insurance broker to review and determine if liability assumed by contract is acceptable. Liability assumed by contract is not automatically also assumed by that party’s insurance carrier. Discussion with your insurance broker may be required as well as amendment to your insurance policy. 24) Publisher’s Liability This coverage indemnifies you against loss through libel or the infringement of rights, pertaining to loss of privacy, plagiarism, piracy or copyright infringement. 25) Non-owned Auto Liability Employees or other persons may use their own autos for your business or rent autos in your name for business trips. If a person is involved in an accident, the injured party may name your business in a suit. This insurance would protect the business. As per your state requirements, individuals should carry his or her own personal automobile insurance for coverage as an operator. Most standard non-ownership forms exclude coverage for a partnership in respect to the individual partner using his or her auto for business purposes, but this exclusion can be deleted for an additional premium. 26) Host Liquor Liability This coverage protects your business against claims based on serving liquor. For example, an intoxicated guest could be involved in an auto accident after leaving your premises, resulting in a claim against the business. Host Liquor Liability should be assumed by your caterer or the party that is selling alcohol (in addition to having the appropriate licensing as required in your jurisdiction). 27) Employee Benefits Liability This is coverage against claims in regard to handling employee benefits funds. 28) Umbrella Liability This provides blanket protection over and above your primary liability program. It also covers unusual hazards that do not come under primary policies such as property of others in your care, custody or control or occasional overseas exposure. 29) Workers’ Compensation This is mandatory coverage for employees. Be certain that the policy includes all states in which your business has employees, and that the classifications on the policy apply to your operations. 30) Disability Benefits Insurance This is third-party coverage, statutory in some states, to provide coverage for employees hurt off the job. See also: Is This the Largest Undisclosed Risk?   31) Accident Insurance Coverage can be arranged in various ways to meet the requirements of your business, either to cover business travel only or 24-hour pleasure and business protection. 32) Key Man Insurance This coverage reimburses the business for financial loss resulting from the death of a key person in the firm. 33) Partnership Insurance If your business is a partnership, this insurance provides cash to carry out a buy-or-sell agreement in the event of death of a partner. 34) Kidnap/Ransom Coverage Kidnap of executives (or members of their families) and payment of ransom demands is a growing concern. This insurance covers reimbursement of ransom payments and related losses and expenses. This article is provided for general informational purposes only and is not intended to provide individualized business, risk management or legal advice. You should discuss your individual circumstances thoroughly with your legal and other advisers before taking any action with regard to the subject matter of this article. Only the relevant insurance policy provides actual terms, coverages, amounts, conditions and exclusions for an insured.

Organizations pay a hefty price for a data breach, but the cost, for the first time, has dropped, a 2017 IBM Security study conducted by the Ponemon Institute has found. The study, which interviewed more than 1,900 individuals at 419 organizations in 11 countries, found the average cost of a data breach is $3.6 million—a 10% decrease from IBM Security’s 2016 study. Incidents with fewer than 10,000 records compromised cost, on average, $1.9 million, and incidents with more than 50,000 compromised records cost, on average, $6.3 million. Incident costs in the 2016 study averaged $2.1 million for the smaller breaches and $6.7 million for the larger ones. See also: How to Measure Data Breach Costs?   “I was pleasantly surprised to see this was the first year in the history of the study that the global cost of a data breach has declined,” says Diana Kelley, IBM Security’s global executive security adviser. The Ponemon Institute has tracked the cost of U.S. data breaches for 12 years and other countries’ breaches for as long as 10 years. This year’s decrease, Kelley says, “may be an indication that the expertise and processes being put in place to optimize security measures are more effective than ever before.” What’s working The new study found that incident response, encryption and education had the most impact—and business continuity programs also helped—in reducing the cost of a data breach. The faster a data breach can be identified and contained, the lower the costs, the study revealed. For the 419 companies in the study, the average time to identify a data breach was 191 days, and the average time to contain a breach was 66 days. The average time to identify and contain a breach was highest when a malicious or criminal attack was involved. People, not glitches, cause most problems “Successfully responding to a breach is all about speed and limiting the window of access and damage to an organization’s IT environment and data,” Kelley says. “The more quickly a security team can identify what has happened, what the attacker has access to and how to contain and remove their access, the more successful they will be in keeping costs down.” Hackers and criminal insiders cause the most data breaches. The study found that 47% of all breaches were caused by malicious or criminal attacks. The average cost per record to resolve such an attack was $156. In comparison, system glitches were resolved at an average cost of $128 per record, and human error or negligence breaches were fixed for $126 per record. Companies in the U.S. and Canada spent the most to resolve a malicious or criminal attack. U.S. organizations spent, on average, $244 per record, and those in Canada spent $201 per record. In comparison, companies in India spent much less—$78 per record. A single record compromised, of course, would be a manageable expense, but organizations with data breaches usually are faced with hundreds to thousands of compromised records. “The numbers add up quickly when you consider all the resources and elements affected by an attack,” Kelley says. “Detection and escalation costs alone can include forensic and investigative activities, assessment and audit services, crisis team management and communications to executive management and the board of directors.” See also: Aggressive Regulation on Data Breaches   The bill “continues to rise,” she says, with the cost of notifying victims, help-desk activities, inbound communications, special investigative activities, remediation, legal expenditures, product discounts, identity protection services and regulatory interventions. “For some small- or medium-size companies,” Kelley says, “a data breach could cost them their business if not effectively addressed.” This article originally appeared on ThirdCertainty.com. It was written by Gary Stoller.

Nancy Newbee is the newest trainee for LOCO (Large Old Company) Inc. She was hired because she is bright, articulate, well-educated and motivated. She is in her second week of training. Her orders include: “We’ll teach you all you need to know. Sammy Supervisor will monitor your every action and coordinate your training. Don’t take a step without his clearance. When he’s busy, just read through the procedures manual.” Nancy is already frustrated by this training process but is committed to following the rules. Upon arriving at work today, Nancy discovers the kitchen is on fire! As instructed, she rushes to Sammy Supervisor. Interrupting him, she says, “There’s a major problem!” Sammy is obviously disturbed by this interruption in his routine. He tells her, “Nancy, my schedule will not allow me to work with you until this afternoon. Go back to the conference room and continue studying the procedures.” “But, Mr. Supervisor, this is a major problem!” Nancy pleads. “But nothing! I’m busy. We’ll discuss it this afternoon. If it can’t wait, go see the department head,” Sammy responds. Nancy rushes to the office of Billy Big and shouts, “Mr. Big, we have a major problem, and Mr. Sammy said to see you!” Mr. Big states politely, “I’m busy now,” all the while wondering why Sammy Supervisor hires these excitable airheads. “But, Mr. Big, the building…” Nancy interrupts. “Nancy, see my secretary for an appointment or call maintenance if it’s a building problem,” Mr. Big says impatiently, thinking, “Where does Sammy find these characters?” Near panic, Nancy calls maintenance. The line is busy. As a last resort, Nancy calls Ruth Radar, the senior secretary in the accounting department. Everyone has told her that Ruth really runs this place. She can get anything done. “Ruth Radar, how may I help you?” is the response on the phone. “Miss Radar, this is Nancy, the new trainee. The building is on fire! What should I do?” shouts Nancy through her tears. “Nancy, call 911!” Ruth says. Now, of course this is a ridiculous example… or is it? See also: How We’re Wired to Make Bad Decisions   Assuming you are the boss, try this eight-question test:

1. In your business, do you hire the best and brightest and then instruct them not to think, act or do anything during their training, except as you tell them to do?
2. Do you promise training and, instead, substitute reading of procedure manuals?
3. Do you create barriers to communication, interaction and effectiveness by scheduling the new employees' problems and inquiries to accommodate the busy schedules of your other personnel?
4. Do you and your staff ignore what new employees are saying?
5. Is the process more important than the result? Does the urgent get in the way of the important?
6. Do layers of bureaucracy between you, your employees and customers interfere with contact, communications and results?
7. Is “Ruth Radar” running your shop?
8. Do you have any fires burning in your office?

If you answered “no” to all of these questions, congratulations! Now go back and look at the questions again. The perfect business would have eight “no” answers, but very few businesses are perfect. If you are like LOCO, our large old company, you might be so far out of touch with your trainees, employees and customers that you won’t hear about a “fire” until it starts to burn your desk. Look back at IBM, GM and Sears in the late 1980s. These were  the kings of their respective jungles. Yet all of these leaders nearly burned to the ground. Many thousands of employees were terminated, profits were ended and stock values fell. If you would have talked to any of these terminated employees, you would have learned that the fire had burned for a long time and that many people had tried to sound the alarm. Remember the large old insurance companies that are no longer here: Continental, Reliance, etc. Did their independent agents smell the smoke? Did the leadership of these carriers ignore the alarm? Sam Walton, who had reasonable success in business during his lifetime, once said, “There is only one boss — the customer. Customers can fire everybody in the company from the chairman on down, simply by spending their money somewhere else.” Walton was right. In your business, do you or Nancy have the most direct contact with the customer — the ultimate boss? If Nancy has the most contact, is she adequately trained, motivated and monitored? Is she providing feedback? Are you listening? Take a minute to draw a picture of your organization. Now, draw a frame around your picture. Does this frame create a pyramid? Are you, as the boss, at the pinnacle? Are Nancy and her fellow trainees at the base? Is it prudent to have the least experienced personnel closest to the customers? Your organization was formed to meet the needs of customers. You exist to serve these same customers. Where are these customers in the organizational chart? Did you “forget” to draw them into the picture? How much distance is there between you (as boss) and the customers? Does this pyramid model facilitate the free flow of information between you and the customers, or does it buffer you from the real thoughts and feelings of the real boss (the customer)? In your business, is the customer and his problem seen as an interruption of the work or as the very reason for your existence? If you had to downsize your company, where would the cuts be made? At the top, middle or bottom of the pyramid? Are the people in the hierarchy of the pyramid there because they did or can do more for the consumer, or were they pushed up by the people they hired to support them? Is your company fat or lean? See also: How Basis for Buying Decisions Is Changing   If your employees answered all the above questions, would they agree with you? If your customers were asked, what would they say? If your customers voted tomorrow, who would be retained? Who would be fired? Think about it! Do you dare ask?

In my role as a sales and business development consultant, I come in contact with sales professionals and business executives across numerous industries. I understand the trends involved with the integration of physical security, IT infrastructure and cyber solutions. The emergence of the Internet of Things (IoT), perhaps more appropriately described as the “Integration of Things,” has created more visibility to the convergence model generally and cyber threats specifically. That said, I see a fundamental problem with sales organizations, outside of the cyber industry, with initiating a cyber discussion. This is the first step in aligning cyber threats in the context of overall business risk, and for providing the managed services and secure products that the industry increasingly requires. This Cyber 101 discussion is more of an informal conversation than a deep technical discussion. Cybersecurity is a confusing topic to many people and is at times assumed to be overly complex. In reality, it is a crime and espionage discussion with a rich history and interesting as a business case study. Put into this context, it is actually a compelling narrative and promotes a lively conversation that inevitably turns to the topic of operational risk and specific business issues. See also: Best Practices for Cyber Threats   The first step is to know your cyber history. This does not have to entail a debate as to when and how hacking evolved. I believe an appropriate starting point would be the first Gulf War. Perhaps the 1990s are ancient history for some, but most senior executives can identify. The important fact was the ease with which the U.S. military demonstrated technical dominance over the Iraqi army. Nightly newscasts of American generals proudly showing video clips of guided missiles accurately striking buildings and vehicles was enough to send chills down the spines of our nation-state adversaries, and jump start their offensive cyber commands. “I believe the Chinese concluded from the Desert Storm experience that their counter approach had to be to challenge America’s control of the battle space by building capabilities to knock out our satellites and invading our cyber networks. In the name of the defense of China in this new world, the Chinese feel they have to remove that advantage of the U.S. in the event of a war.” –Adm. Mike McConnell (ret.), former Director NSA, and Director National Intelligence Not to be left out, the Russian military also accelerated its cyber capabilities (post-Gulf War I), as well. In fact, many “retired” military cyber warriors established the early Russian cyber criminal syndicates and promoted global cybercrime as a business model. As a result, cybercrime evolved, and Cyber Crime as a Service eventually exploded.  It is a well-known operational fact that you only exist as a significant Russian cybercriminal if you abide by three hard and fast rules:

1. You are not allowed to hack anything within the country;
2. If you find anything of interest to the government, you share it;
3. When called upon for “patriotic cyber activities,” you serve.

In exchange, you are “untouchable” and immune from prosecution. Tom Kellermann, CEO of Strategic Cyber Ventures, is a cyber intelligence expert, author, professor and leader in the field of cybersecurity serving as a global fellow for the Wilson Center. He is the previous chief cybersecurity officer for Trend Micro and vice president for security at Core Security. Kellermann has told me there are approximately 200 “cyber ninjas” globally: truly elite hackers. This select group of black hat ninjas realized they could produce “malware for dummies,” (or criminals with average skill sets), along with online “how to hack” support services, in return for a cut of the profits. This business model returned more personal revenue at scale, compared with individual hacking activities, with much less risk. These operations created the original “Malware as a Service” business models, and, as a result, cybercrime has since exploded. (By the way, the model provides a recurring monthly revenue stream.) According to the Serious Organized Crime Agency (SOCA), global cybercrime has surpassed narcotics trafficking in illicit revenues, and in the U.K., more than 50% of all crime is now cyber-related. Kellerman added that cybercrime has moved from traditional burglary to digital home invasion: “The economic security of the West is in jeopardy.  Civilizing cyberspace must become a national priority.” Research firm Cybersecurity Ventures (not to be confused with Strategic Cyber Ventures) produced a report that predicts that cybercrime worldwide will grow from $3 trillion in 2016 to more than $6 trillion annually by 2021! As a comparison, the entire gross domestic product (GDP) for the U.S. was $14 trillion in 2016. Cybercrime today is professional, organized, sophisticated and most importantly “relentless.” These are not personal attacks. If you have any digital footprint, you are a target, period. The entire internet can be scanned for open ports within a few days, and IP cameras being activated on the internet are normally pinged within 90 seconds. You can’t hide very long. When it comes to security, the adage that “offense informs defense” is appropriate when protecting your specific business operation. A former client of mine, John Watters, CEO of iSIGHT PARTNERS (now FireEye), used an example: “A burglar and an assassin can use the same tools and tradecraft to gain entry to a location, but the intent, once inside, is very different. One wants your property; the other wants to kill your family. Prepare yourself accordingly.” Another challenge is that the risk of cyber attack is growing. This is a dual-edged sword in many regards. IoT and the Industrial Internet of Things (IIoT) open a much wider attack surface of many more devices. However, the operational efficiencies and human productivity advances cannot be denied and will move forward. This situation creates a new reality; essentially, cyber threats are morphing from a virtual threat into a physical danger. Matt Rosenquist, cyber security strategist, Intel Security Group, explained in his 2017 ISC West Keynote address that the same controls that provide auto assist to parallel park your vehicle can be hacked to force a car (or hundreds of cars) to accelerate to high speeds and turn abruptly, causing fatal accidents. Imagine for a moment what that hack does to that specific automobile manufacturer's reputation? Would the corporation even hope to survive? Planes, trains and automobiles are just the beginning. Intelligent buildings, campuses, hospitals, retail outlets, branch offices and mobile emergency services, etc., all need to be secured. Security, followed closely by privacy protections, will be at the top of all buying requirements to win business. The bottom line is that cybersecurity, like terrorism or tornados, is about risk management. This is a discussion that owners, managements and boards of directors know well. It is the responsibility of the sales professional to educate prospects and customer organizations to the sophisticated level of cyber risk that exists today and into the future. This is why understanding and explaining the evolving cybercrime business model is so important as an initial discussion. See also: How to Anticipate Cyber Surprises   In 2017, I have had the “Cyber 101 Discussion” with sales leadership and executives from many companies and industries:

1. The regional insurance firm in Texas (1,000 employees) that recognizes a huge and expanding cyber insurance market opportunity generating more than $3.5 billion in 2016, and growing at 70% annually! Yet the sales organization does not know the first thing about starting the cyber dialogue with potential clients. ‘‘We know insurance, not cybersecurity.”
2. The global video camera distributor that needs assistance in aligning marketing and sales messaging to answer customer concerns about cybersecurity. The industry needs a response to the Mirai botnet attacks that virtually guarantee that the internet will be flooded by hacks of new botnets powered by insecure routers, IP cameras, digital video recorders and other easily hackable devices.
3. The physical security integrator that recognizes the need to provide secure solutions and endpoints for enterprise customers, but needs to provide internal cyber education while recruiting strategic partners offering cyber solutions and support resources.
4. The domestic security monitoring company that now offers cyber managed solutions to the SMB market but struggles with positioning a compelling ROI and explains that customers cannot “quantify” the cyber risk to their business? (Hint: That’s the job of your sales organization; your customers need cyber education.)

It begins with a cyber sales comfort level within your own organization. Cyber education allows you to pass knowledge on to others as a trusted adviser. Get the Cyber 101 discussion started as a first step. Additional education and specific solutions can always be provided to secure passwords, mobile devices, access control, VMS, encryption and backups, etc. It’s a long list, but security managed services are providing recurring revenues and need to be positioned correctly. Whether providing cyber insurance, hardening physical security equipment or selling secure managed services, the Cyber 101 discussion starts with understanding cyber history and the evolution of adversary intent. Today’s cyber threat is a component in the new definition of digital business risk. Not always overly technically complicated, but essential to be countered and monitored constantly.

Hi, everyone! Have you ever sat down to work on a business pitch... or your resume... or an important speech you've been ask to give... and then realized it would be much less stressful to check the sports scores... or play solitaire... or check Facebook?  If so, join the crowd. Surveys find that 80% of college students are procrastinators, and 20% of the adult population, as well (although, of course, many of them may have just never been motivated to actually complete the surveys). But there is hope for those of us who, like Herman Melville, when writing "Moby Dick," need to be chained to our desks to complete a piece of work!   Here are my five quick tips to overcome procrastination: Tip 1: Start your day with the hardest task - that is, if you're up for it. This is the old Mark Twain advice to eat a live frog first thing in the morning, and nothing worse will happen to you the rest of the day. In other words: Do the most challenging and difficult to-do item on your list before anything else, and you will have checked it off. Good advice, but only if you're actually up for it. Some of us might not be at our best selves first thing in the morning -- and in fact, might be better off eating our frogs in the afternoon -- when we're at our peak performance level -- or at night. So, the advice here is to realize when you're going to be at your best self -- and, at that point, eat your frog. See also: To Predict the Future, Try Creating It   Tip 2: Do quick to-dos super quickly. I remember getting advice early in my career to keep all sorts of email folders to manage inflow into my inbox -- folders telling me to respond tomorrow... or respond on Friday... or respond early next week. And at the time, I remember how overwhelming and inefficient this all sounded. My best practice now is to make a super quick assessment of an incoming message, think about if I can realistically respond immediately and then just do it. I can report that, with this strategy, I have only 12 total messages in my inbox as I write. Tip 3: Make your intentions public (and be accountable to someone). If overcoming procrastination is outside your comfort zone, make a pledge to take the leap and, ideally, have that pledge be public. You don't necessarily have to announce it to the world. But find someone supportive you can be accountable to and tell the person. It might be a close friend, or a colleague, or a group you belong to. The more you're accountable, the more likely you'll be to follow through. Tip 4: Reward yourself for small wins. Those of us who are perfectionists and high achievers might not necessarily feel it's "worth" celebrating that we started to respond to a few more emails... or that we were able to accomplish our most difficult task first thing in the morning. But in actuality these are achievements worth noting and celebrating. It's not easy to take the plunge. So, celebrate your small win and move on to the next one. Tip 5: Remember that not all procrastination is bad. Sometimes procrastination can actually serve a useful purpose. It can allow you to consider different ideas, think in original ways and then come back to your original task at hand with fresh insight. But there's an important caveat here: You actually have to return to the task at hand! That can be tough for chronic procrastinators. In the end, procrastination can be challenging to overcome; but, with a plan in place and the courage to take it forward, you can make great strides in your time management and productivity. See also: How to Move to the Post-Digital Age?   Are you a chronic procrastinator? What are your go-to strategies? Until next time.

If you’re like most people, calling an insurance company isn’t among your favorite activities. That’s because the insurance industry is one of the least innovative areas for customer experience. Customers typically come away from their interactions dissatisfied. However, things are definitely changing, and artificial intelligence is playing a large role. The fast-growing technology has the potential to disrupt the entire industry and greatly improve the insurance customer experience. Artificial Intelligence in the Claims Process The insurance agency is notorious for its outdated processes. Filing a claim often looks the same today as it did decades ago because the industry isn’t consistently leveraging new technologies that are available. If an employee is busy or on vacation, a claims request could sit still until the right person is back. The outdated processes make it harder for agents by increasing the workload and forcing them to work with antiquated systems and frustrated customers. However, AI can be applied to improve the claims process. Claims currently are touched by multiple employees. However, a new process of “touchless” claims doesn’t require any human intervention. This process uses artificial intelligence and other technology to report the claim, capture damage, audit the system and communicate with the customer. The potential here is huge, as the process could allow clients the chance to file claims without having to wade through red tape. See also: Strategist’s Guide to Artificial Intelligence   Companies that have already automated some aspects of their claims process have seen a significant reduction in processing times and quality. AI-powered claims could also fight against one of the most costly elements of the insurance industry: fraudulent claims, which cost the industry more than $40 billion a year. Instead of relying on humans to manually comb through reports to catch inaccurate claims, AI algorithms can identify patterns in the data and recognize when something is fraudulent. Future of AI and Insurance The industry is definitely ripe for AI disruption. Customers expect to be able to interact with companies through modern technology; a recent survey found that 74% of consumers say they would be happy to get computer-generated insurance advice. Many insurance companies are already using artificial intelligence to some degree, and the number of companies following in their footsteps is sure to increase dramatically over the coming years. Artificial Intelligence has never been less expensive or more accessible, which means most companies don’t have a reason not to adopt it in at least some form. Chatbots Chatbots work through messaging apps that many customers already have on their phones, which makes them a natural next step in customer interaction. To truly be effective, chatbots must have natural language processing and sentiment analysis so they can understand what customers are really asking. Effective chatbots can process concerns that are either typed or spoken from customers and provide personalized service. In the insurance space, chatbots can be used to answer basic questions and resolve claims, as well as sell products, address leads or make sure customers are properly covered by their insurance. Marketing and Underwriting Insurance is a competitive market, so a strong marketing strategy is vital. Traditionally, insurance companies used blanket methods like cold calling customers, but today’s customers expect personalized sales tactics. AI can pull in customer data to create a full profile that can be used to offer only relevant insurance products and remember a customer’s preferences. Instead of spending valuable time and money on the underwriting process, which typically includes invasive questions and surveys about to dictate premiums, artificial intelligence could automate the entire process. Bots could potentially scan a customer’s social profile to gather information and find trends and patterns. For example, someone who has a healthy lifestyle and a steady job may be able to be connected to being a safer driver, which could lower insurance premiums. AI can analyze data better than humans to more accurately predict each customer’s risk, thereby providing customers with the right amount of insurance and companies with protection from risky customers. Data Insurance is driven by data, and it has a huge effect on the company’s bottom line and the satisfaction of the customer. A recent study found that nearly 80% of insurance executives believe artificial intelligence will revolutionize the way insurers gain information from their customers, with more than half saying the biggest benefit is being able to leverage better data for improved insights into the customers. See also: Seriously? Artificial Intelligence?   Telematics, or wireless communication of data back to an organization, is expected to be a huge area of growth for insurance. Many insurance companies already offer discounts to customers who transmit their driving data back to the company. Telematics and artificial intelligence can take this one step further by recognizing GPS patterns with the data, inferring road and traffic conditions and even predicting and helping avoid accidents, which could potentially lead to fewer claims to process and safer and more satisfied customers. The insurance industry has long been bogged down by outdated practices. However, the combination of a new wave of thinking and newly developed artificial intelligence technology has the potential to completely change the customer experience to provide great service in a way that resonates with modern customers. You can find more on this subject in More Is More: How the Best Companies Go Farther and Work Harder to Create Knock-Your-Socks-Off Customer Experiences.

I recently attended a lecture by a Stanford professor in which he offered an interesting take on the history of communication, as a way of shaking us out of our tendency toward "presentism"—the deep-rooted feeling that things have always been as they are now and, thus, will continue just as they are now.

He said we humans started speaking about 50,000 years ago and began writing about 5,000 years ago, but only passed the point of 50% literacy for the world's population probably during World War II. Look what's happened since. Not only has adult literacy increased to 85%, but about half the world owns a smartphone, with access, via Wikipedia, to basically all the information ever collected into an encyclopedia. Texting, Twitter and other new forms of communication allow for extraordinary, instant levels of connection. Artificial intelligence is letting us communicate with computers in ways once reserved for human-to-human conversations.

So, are we done with progress? I mean, how much further can we go?

A long ways, it seems.

For instance, the professor said that, before long, we'll go beyond communicating with chatbots—our chatbots will converse with other chatbots—and I'm sure he's right. I could actually take his claim back almost 20 years, to when I sometimes moderated a panel at an internet-related conference at the Kellogg School of Business at Northwestern University (my alma mater). A general partner at Sequoia Capital told us once that, in his quest to stay on the cutting edge, he had a voice-activated cellphone in his car, as well as voice-activated features for the car's controls. A random noise prompted the car to say, "I'm sorry, I didn't understand you." To which the phone replied, to which the car replied, to which.... "How do you make your phone and your car stop talking to each other?" the Sequoia partner asked.

Much more recently, we've all seen stories about all the bots on social media that will like or follow people to try to influence the dialogue, will generate responses, etc. Two bots even recently tried to prank each other, generating 15 messages a second for hours on end.

I don't have a clue where this all ends, but I am pretty well scared out of any tendency toward "presentism" and hope you are, too.

Cheers,

Paul Carroll,
Editor-in-Chief

At the 2017 PRIMA Annual Conference, a session discussed real-world examples of high-profile police shootings where media coverage and public perception affected litigation with allegations of police brutality. The speakers included:

• Michele Molinario – Partner, Jones Skelton & Hochuli
• John DiCaro – Partner, Jones Skelton & Hochuli

Are there more officer-involved shootings now than previously? There are no firm statistics on this, but the Washington Post estimates close to 1,000 shootings last year. Thus far in 2017, there have been fewer than 400 shootings. In spite of the publicity around officer-involved shootings, very few officers are convicted of a crime because of a shooting. Media coverage and celebrities have been highlighting some police shootings without full command of the facts,  which taints public perception of law enforcement and taints potential jury pools. The speakers discussed certain high-profile cases: Laquan McDonald

• Oct. 20, 2014
• Chicago
• Carrying a knife and breaking into cars
• Slashed tires on a patrol vehicle
• Disobeyed verbal demands
• Officer shot McDonald 16 times within a few seconds of arriving on scene.

Was the shooting justified? The first question to ask is, “What were the police investigating at the time of the shooting?” In this case, the person was known to be armed and committing crimes. Another question is always whether the person shot was a threat to officers at the time of the shooting. There were reports he was acting “crazed,” had threatened officers and had lunged toward officers. According to police training videos, a minimum reactionary gap of 20 feet is required for officers to draw their weapon and fire if an armed person attacks them. If the distance is less than 10 feet, there is little chance the officer can draw a weapon and fire before being stabbed. See also: Police Shooting Shows Gaps in Work Comp   Among the issues that need to be addressed during trial:

• Did the officer assess the scene prior to firing?
• Was more force used than necessary?
• Inconsistencies between video and police report.

From the media standpoint, the focus was on the number of shots fired, which many felt was excessive. They also focused on the fact that the suspect was not moving toward police at the time shots were fired. Some of the shots were clearly fired while the suspect was already on the ground. Among the discussion topics from the audience included the fact that it is very difficult to hit a moving target with a taser, and that tasers are not very effective against someone on PCP (which McDonald was). The officer in this case has been charged with first-degree murder and is awaiting trial. The city settled the civil case for $5 million. What level of force is reasonable?

• Severity for the crime and other circumstances to which the officer was responding?
• Whether the plaintiff posed an immediate threat to the safety of officers or others.
• Whether the plaintiff was actively resisting or attempting to evade arrest by flight.
• The amount of time and any changing circumstances during which the officer had to determine the type and amount of force that was necessary.
• The type and amount of force used.
• The availability of alternative methods to subdue the plaintiff.

NOTE: Each state has laws pertaining to criminal charges against police officers. Generally, reasonable justification is an affirmative defense to a criminal charge. The jury standard is beyond a reasonable doubt. Courts have said that “reasonableness” must be judged from the perspective of officers on the scene vs. a 20/20 hindsight analysis. NOTE: 42 USC 1983 statutes allow individuals to sue police officers and municipalities civilly for depriving someone of civil rights. Thus, civil cases in police shootings are usually federal cases, and the criminal cases are usually state. Walter Scott

• April 4, 2015
• Charleston, SC
• Pulled over for traffic violation (broken tail light)
• Suspect attempted to flee and was shot by officer multiple times

Officer claimed he felt there was a threat to his safety and claimed that the suspect tried to grab his taser. Before the filming started, apparently there was a physical confrontation, and the officer tried to tase the individual and missed. The officer tried to tase a second time, which was not effective. At that point, the suspect started fleeing and was shot by the officer. Courts have held that deadly force can be used against a fleeing suspect under certain circumstances, including the threat of deadly force immediately prior to the suspect fleeing. The officer in this case has been charged with murder, and the trial ended with a mistrial. 11 of 12 jurors favored conviction. A retrial has been scheduled. The officer was also charged under civil law. He plead guilty under federal law and is awaiting sentencing. He could face a life sentence. Tamir Rice

• Nov. 22, 2014
• Cleveland
• Police dispatched by 911 call with reports of person in the park with a gun threatening individuals.
• When officers arrived at the scene, they warned the suspect three times before firing.
• The video showed the plaintiff going to his waist for something under his jacket, at which time officers fired.

This case caused a lot of media attention because the suspect was 12 years old, and the pistol in his hand was a toy. The 911 caller told the dispatcher that the suspect was a child and that the gun was probably a fake, but this information was not given to officers. They were only told there was an armed suspect. The officer who fired the shots had been previously terminated by a different police department, which raised allegations of improper hiring/supervision. The city settled the civil suit for $6 million. A factor in this settlement was likely the fact that the dispatcher relayed inaccurate information. The officers were not charged. Eric Garner

• July 17, 2014
• Staten Island, NY
• Garner approached on street by law enforcement for illegally selling cigarettes.
• There was a physical confrontation, and the suspect was put in a choke hold
• Cellphone footage shows the suspect saying multiple times, “I can’t breathe,” while he is in the choke hold.

There was no criminal indictment of the officers. The city settled the civil suit for $5.9 million. The coroner ruled the cause of death was the choke hold. See also: Change Accelerates in Core Systems   Conclusions

• Over the last four years, cases occurred in seven states with large populations (CA, NY, FL, PA, OH, TX, IL)
• Most verdicts on cases taken to trial have been defense verdicts. More cases settle than get a plaintiff award at trial.
• With all the media coverage, there is not necessarily more plaintiff verdicts – even in perceived liberal jurisdictions.
• Public outcry tends to lead to quicker settlements of civil cases.
• Courts have not ruled that officers must deescalate the situation before using deadly force, but is the public demanding it?
• Some municipalities are increasing training on deescalation techniques.
• The speakers indicated they did not see a difference in settlement behavior between self-insured and insured municipalities.
• The attorney fees can often be significantly more than any damages awarded because, if the plaintiff wins anything, fees are covered. Juries are not advised of this.

The whole transportation sector is in for massive transformation. The way that people and goods will be moved from point A to point B in the future will be completely different. I am not (yet) talking about a Star Trek-style transporter, although scientists have moved matter at the atomic level from one side of a room to another, so we may eventually get there. The transformation I want to focus on is much closer. Consider the future that the young children of today may experience. They may never own a car, or understand what it means to hail a taxi, or even rent a car. The next generation will find it odd that we used to put “gas” in our vehicles and may think of driving a vehicle as something that you do in an amusement park. Imagine the future at Disney World, standing in a long line waiting for the new “1978 Camaro ride.” See also: Connected Vehicles Can Improve Claims   When you consider the impact of telematics, electric vehicles, the sharing economy, autonomous vehicles and new modes of transportation – like the Hyperloop or the fleet of drone taxis that Dubai plans to have in operation by 2020 – you start to see that these developments are not just science fiction. They are becoming science reality. Collectively, these technologies and trends have the potential to dramatically reduce accidents, improve safety and optimize vehicle usage, which are great benefits for society as a whole. For insurers, however, this is a mixed blessing. Insurers have always been some of the biggest proponents of technologies that improve the safety of vehicles. But the potential to dramatically reduce accidents also comes with the probability of dramatically reduced premiums – the bread and butter of many P&C insurance companies (for both personal auto and commercial fleets).