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Partners and Cyber: To Affinity and Beyond!

The joke about cyber insurance is that if you’ve read one policy, you’ve read… one policy. As an emerging, yet vital, form of insurance, cyber has not yet become standardized in terms of the coverage offered. This puts a heavy burden on businesses to rigorously analyze cyber policy options to pick the one that best fits their needs. Vetting countless different policies can be daunting, especially for small and midsize businesses (SMBs) that lack the resources of major corporations. And with the cost of cyber breaches expected to hit $6 trillion in the next few years, this task could not be more important.

Insurance companies with stand-alone cyber offerings are working to make policies more accessible for SMBs, which are traditionally underinsured or uninsured for cyber, so that these businesses have a plan in place to survive a breach. While insurance agents play a critical role in the insurance market — businesses need an agent to talk them through how this form of insurance operates and answer any questions that they may have about coverage — we need additional methods to bring cyber coverage to more businesses. There is a fundamental distribution issue that needs to be solved, so that all SMBs have easy access to policies that apply to them.

See also: Tips for SMBs Buying Cyber Insurance  

Affinity partnerships, where a customer provides insurance products to its clients or membership, offer a clear and effective solution to this problem. By partnering with business services, professional organizations and brokers, insurance companies can begin to close the cyber insurance gap for SMBs. Insurance companies need to work with the groups that businesses trust most so that procuring a vetted cyber insurance policy is as easy as clicking “yes” on a form. Additionally, these organizations help businesses cut through the mass of policies to find the one that best fit their needs.

Other classes of insurance excel with this model. As an example, shared work spaces that cater to young professionals entering the workforce have solved a common insurance conundrum by seamlessly integrating general liability and renters insurance into the lease. Cyber insurers can do the same with common business services, like cloud-based accounting or invoicing services. Insurers can partner with these larger organizations to embed their cyber policy right into the business contract.

Lawyer or medical associations are another good example. They often review policies and services so that they can provide sound recommendations to their members. By working with an association to provide it with the policy that best fits its members or customers, insurers can help small and midsize businesses forgo the burden of reviewing many different policies. These organizations, as experts in the field, will help businesses opt into the cyber policy that fits their needs to ensure they have coverage.

Affinity cyber programs can also offer businesses the comfort of a community. Organizations make things easier for member businesses by educating them on cyber risks and insurance terms that are specific to the coverage that “people like me” generally need.

Working with brokers is an important aspect of an affinity strategy. There are around 29 million small businesses in the U.S., and most are drastically uninsured and underprotected. Brokers serve a wide number of clients, and, by partnering with brokers to design the coverage that best meets the needs of an affinity sponsor, insurers can reach many businesses through one partnership.

A key challenge that insurance companies will face as they develop affinity strategies is education. With the average cyber attack of an SMB estimated to cost $160,000, many businesses that are the victim of an attack do not survive. But, just 33% of SMBs have cyber liability insurance. What few SMBs realize is that larger corporations often require cyber insurance to do business with smaller organizations, and it can be a surprisingly affordable and accessible line of insurance for SMBs. Insurance companies need to first work to educate professional services, professional organizations and brokers on the importance of cyber insurance to develop affinity partnerships.

See also: The New Cyber Insurance Paradigm  

Affinity organizations and SMBs will be looking for insurance partners that most effectively solve cyber risk. These groups will look at cyber insurers to see if they can provide broad coverage, quickly and accurately assess risk and offer prevention and monitoring tools, all at a competitive price.

By working to educate groups on the importance of cyber insurance, and by forming affinity partnerships, insurance companies can help SMBs better manage their cyber exposure.

Cyber attacks are not a matter of “if,” but of “when.” As the market for cyber policies increases and develops, insurers need to reach as many businesses as possible, and affinity partnerships can help close this gap and get SMBs covered.

Cyber: 7 Ways to Secure a Small Firm

It’s a startling statistic: Due to the massive amount of consumer and corporate data stored across the country, more than half of all data breaches globally are expected to occur in the U.S. by 2023. Although most people assume hackers are only interested in large data breaches, like the one experienced by Equifax in 2017 or Marriott International last year, it’s small businesses that find themselves at a greater risk. In fact, a recent report by Small Business Trends stated that 43% of cyber attacks target small businesses. That number will only continue to grow as cyber hackers develop increasingly sophisticated methods of threatening and stealing sensitive information. Small businesses can also suffer from lost data, unsecured devices and attacks stemming from covert phishing emails.

Below are seven simple measures you can put in place to protect your small business this year:

1. Back up your data

Over 140,000 hard drives fail in the U.S. each week, and 29% of those failures are caused by accident. Losing data can devastate a small business. Finding a secure way to back up your data is a necessity in today’s fast-paced, competitive business landscape. If you store company data in the cloud, back it up on a physical, on-premise drive to ensure data remains secure and a plan B is available.

2. Update and strengthen passwords

The standard eight-character password can be cracked in 15 minutes. That time continuously decreases as brute force hacking bulldozes its way through identifying words, phrases and character password combinations. It’s important to make sure all passwords are 12 to 15 characters and use a combination of upper and lowercase letters, numbers and special characters that can slow down or derail a hacker. A password manager can also be employed to help ensure passwords at each access site contain a different, complex sequence of letters, numbers and special characters. Consistently updating passwords and requiring unique passwords for various devices will help maintain company security.

See also: Taking Care of Small-Medium Business  

3. Take cybersecurity training courses

97% of people are unable to identify a sophisticated phishing email. Phishing scams cost American businesses $500 million each year, and that number continues to rise, with over 400,000 more phishing attacks occurring in 2016 than the year prior. Data breaches also allow phishers to obtain specific information on a target through information uncovered during a breach and then use that information to appear credible. One way to combat this disturbing trend is to train your staff on how to identify malicious emails.

4. Implement a clean desk policy

Unattended computers or documents cause 47% of all data breaches. As a result, many small and large businesses have begun implementing a clean desk policy, requiring employees to clear their desks of all papers and completely shut down their computers at the end of the day, to help ensure proper security of sensitive information.

5. Get cyber insurance

On average, it takes 191 days for a business to even realize it has suffered a data breach and 66 days to contain a breach. Cyber insurance can provide critical coverage for any destruction including data lost through theft, cyber attacks, cyber crime, malfeasance or employee error. Cyber insurance companies can provide guidance in the days or months after a data breach, data recovery and forensics, ransom payments, public relations and credit monitoring for those affected by the breach. Having a defense plan in the form of cyber insurance protects your business, reputation and customers.

6. Create a plan

54% of SMBs have no contingency plan for handling a data breach. Not having a plan can make it exceptionally difficult to recover when your business is under attack. By creating a plan that clearly lays out the steps you and your employees should take after a data breach occurs, you can help mitigate the potential damages and losses and quickly begin the road to recovery.

7. Manage all BYODs

87% of companies allow Bring Your Own Device (BYOD). While the concept is admittedly an essential part of maintaining connectivity and handling after-hours tasks, the unfortunate reality is BYOD exposes your business to threats. By tracking all instances of BYOD with a mobile device management system, requiring all devices to be password-protected and developing a written security device policy, however, threats to these devices can be diminished.

See also: Cyber Attacks Shift to Small Businesses  

Taking these small steps to securing your growing business, and constantly revisiting and revising your cybersecurity plan, are some of the best ways to protect your investments and prevent the likelihood your business will suffer from malicious hackers trying to profit off your data. Prioritize these essential cybersecurity best practices above all else, because the safety of your business, employees and customers truly depends on it.

Tips for SMBs Buying Cyber Insurance

Cybersecurity continues to remain top of mind with business owners as breaches continue and cyber criminals become more proficient in their techniques for hacking into sensitive information. Couple that with increasing regulations, like GDPR, which put the onus on companies to protect consumer information, and businesses of all sizes are paying closer attention. In 2018, 30% of commercial insurance shoppers added a cyber insurance policy compared with just 12% in 2017.

According to a recent Cyber Trends report issued by CyberPolicy, contractual requirements from large corporations to third-party vendors and compliance requirements such as HIPAA, PCI and DCI are leading SMBs to shop for $1 million to $5 million coverage limits to satisfy these obligations. And for SMBs looking to do business with large corporations, many will find that vendor contracts now require cybersecurity planning and insurance, further protecting themselves in the event that partner data is compromised.

See also: The New Cyber Insurance Paradigm  

As SMBs are comparing different policies, here are a few tips:

  • Commercial general liability (CGL) coverage is no longer enough, as it typically has insufficient cyber coverage.
  • Business owners should look at the policy coverage with respect to data protection and privacy risks, both for third-party claims and first-party mitigation costs. Cyber insurance policies vary quite a bit, with no real standard in the industry. Policies usually include some combination of first-party and third-party coverages. A business owner who is unsure about which is more important should consult with a cyber insurance expert.
  • Coverage needs to provide protection for cyber extortion threats and other breach-related liabilities, including regulatory penalties, GDPR and merchant services agreements.
  • Renewing coverage during the contract period is critical, as most cyber coverage is written as “claims made” coverage and will only cover claims during the policy period.
  • Proper preventative measures should be embedded in operations for every company, with cyber insurance as the backup. The measures should cover how sensitive data is handled, encryption, password management and controlling access to information. Some policies will have resources for the business owners to help manage this process, something to consider when speaking with a cyber insurance expert.
  • Both parties should consider documenting specific preventative measures in a contract. This ensures that everyone is in alignment and understands the expectations for risk avoidance.
  • Often, certificates of insurance are all that is required as documentation in the contract. Consider including a full copy of your cyber insurance policy with the contract to prevent misunderstandings should a breach occur.

The good news for SMBs is that cyber insurance policies have become more affordable. In April 2017, the average monthly premium cost for a $1 million cyber insurance policy was $270. By June 2018, the cost had dropped to $77.

See also: New Approach to Cyber Insurance  

As with most business operations, owners should always consult with their insurance representative when selecting cyber insurance. With any new policy, business owners should take the time to understand exactly what is covered under their insurance, how to manage their business operations to mitigate any security risks and what steps to take in the event of a breach.

3 Reasons to Use Online Marketplaces

Providing your employees with insurance coverage is one of the best ways for small business owners to support them. Employees with health insurance are happier, far more productive in the office and more likely to stay at a company if they are satisfied with their current benefits. In this digital age, online benefits marketplaces render finding employee insurance for your employees as modern and straightforward as searching for and buying other high ticket items such as automobiles or homes. There are resources at your disposal should you have any questions throughout the insurance shopping and purchasing process. Below are three reasons online marketplaces help small business owners choose health insurance:

Convenience

As a small business owner, you are exceedingly busy, and your time is valuable. In a recent Vistaprint survey, small business owners reported spending their time on administrative duties, project management, marketing, product development, design and countless other tasks that are essential to growing their businesses. Your hectic schedule demands that you be able to browse and shop from your laptop or tablet, comparing employee health plan options digitally to save time that you would otherwise spend filling out lengthy paperwork, scheduling meetings or playing phone tag. Sophisticated technology modernizes employee benefits shopping as you know it by removing any confusion or unknowns.

See also: 5 Health Insurance Tips for Small Business  

Breadth of Options

Most small business owners want to know they have considered a wide range of employee health insurance options before buying. You don’t want to sift through stacks of paper when considering your choices, but you do want to make sure you haven’t missed the best plan or plans for your employees. Research shows that 43% of individuals shop and purchase online. Look around the store the next time you are shopping and notice the number of people searching the price of a commodity prior to buying it. Employee benefits are no different. It is important to use the online resources available to you when providing your employees with benefits that suit both their needs and your budget.

Broker Support

The digital experiences offered by online insurance shopping marketplaces do not mean the death of the broker. People still benefit from having access to an expert in the field should they need any assistance. Even with the most streamlined of digital insurance shopping experiences, you may have questions and concerns along the way, especially because this is a high-cost decision that affects your employees directly. It is helpful to have a licensed broker to answer your questions, put you at ease and act as an ally who can assist you through the process. An online experience does not preclude you from having access to one of these valued resources. Licensed brokers are traditionally still made available to small business owners even online.

See also: 4 Trends to Expect in Health Insurance

Your employees and their health are important to you. Taking advantage of the ample resources provided by online health insurance marketplaces is the smartest and most cost-effective way to make sure your team is covered. You will save time overall and be presented with a variety of precise information faster, while still having access to support every step of the way.

Debunking 4 Myths on Healthcare for SMBs

Making healthcare available to your small business employees can be a daunting prospect. Procuring employee benefits can be costly and confusing to a non-expert in the field. However, it is essential to separate fact from fiction when considering providing your small business employees with the valuable gift of healthcare.

Here are four commonly believed myths about healthcare for small businesses:

My employees have medical issues; I probably can’t even afford to offer health insurance.

For small group health plans, prices vary based on employee age, location and carrier. The health of your employees is not a determining factor. Small business fully insured plans are “guaranteed issue,” which means that qualified employees, regardless of health status, can get coverage.

While employee benefits can be pricey, employers do not have to subsidize the entire amount. Depending on the budget, business owners can determine how much they are willing to contribute. Most employers contribute anywhere from 50% to 100% of the employee-only cost. There is a plethora of health plan options available for a wide range of budgets.

See also: What SMBs Want in Group Insurance  

Employee benefits are too hard to understand.

A study recently found that 4% of Americans couldn’t correctly define the four key health insurance terms necessary for a basic knowledge of healthcare (deductible, copay, coinsurance, out-of-pocket maximum). Even if you’ve never offered employee benefits before, lack of familiarity with healthcare-related language shouldn’t stand in the way of making sure your company is covered. Resources are available to help demystify insurance for small business owners. Licensed brokers are available in a variety of formats to answer any questions you may have. There is also a multitude of explanatory collateral easily accessible online for free breaking down health insurance terminology and preparing small business owners to purchase health insurance plans for their employees.

I can’t get insurance. I missed the open enrollment period.

Small business owners can make employee benefits available to their employees all year. For the majority of states, the open enrollment period for 2019 was from Nov. 1 to Dec. 15, 2018, with some jurisdictions (like the District of Columbia and New York) extending their deadlines to the end of January. However, the open enrollment periods only apply to individual plans and Medicare, meaning that you are not bound by the open enrollment periods. Most insurance companies offer effective dates on the first or the 15th of every month for new benefits.

I shouldn’t have to provide insurance to my employees if it isn’t legally required.

Under the Affordable Care Act (ACA), employers that have fewer than 50 employees are not legally required to offer health insurance. Employees with 50 or more full-time employees may face a penalty for not providing coverage. However, even if your small business isn’t bound by law to offer employee health insurance, doing so benefits your employees and their families — and your business. Employees are far more likely to choose and stay with a company if they are satisfied with the health benefits. In a recent AHIP study, 56% of American adults whose employers sponsored their health benefits reported that whether they liked their job’s health coverage was a key in deciding to stay at their current position, while 46% said health insurance was either the deciding factor or a positive influence in choosing their current position. Furthermore, employees who are insured are more productive while at work.

See also: Digital Insurance 2.0: Benefits  

No small business is too small to offer benefits. Under federal law, a small business must have at least one full-time equivalent employee other than the owner, spouse or family member to qualify as a small business and obtain health insurance. As long as your company qualifies as a small business under the ACA, you can provide your employees with healthcare.

There’s often confusion surrounding small business health insurance that may prevent a small business owner from taking the crucial steps to make sure the team is covered. Shopping for and purchasing employee benefits has modernized and become easier over time thanks in great part to continuously improving technology. With all of this information and technology at your fingertips, you can feel confident in taking the next steps to provide health insurance to your employees.