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Cyber Risks & Liabilities in 2021

By: Dan Reith BA(Hons) CAIB
Principal Broker
Reith & Associates Insurance and Financial Services Limited

Technology was forced to rapidly advance in 2020 due to the global health crisis, which found organizations scrambling to adapt to remote working. HR technology was no exception. With the implementation of virtual onboarding processes, the creation of fully-automated payroll systems and more, HR technology adjusted to the needs of organizations in 2020.

HR technology will continue to be vital for the advancement of companies in 2021 in the four areas mentioned below.

Digital Solutions for Remote Work

As organizations continue to navigate the virtual landscape, digital solutions are essential. Keeping an eye on productivity while still fostering collaboration is possible by managing workflows and streamlining processes. Integrating platforms that offer niche solutions for digital collaboration is key moving forward. Document sharing, online chats and video conferencing can help with keeping projects on track.

Software-as-a-Service and Cloud-based HR

Organizations with cloud-based systems already in place were able to seamlessly transition from the office to working from home. For those relying on outdated technology, the shift was a bit harder. In 2021, HR should include cloud-based and software-as-a-service (SaaS) solutions to stay on top of the evolving digital landscape. These solutions allow for comprehensive employee management online, including talent acquisition, virtual onboarding, performance management and payroll.

AI-powered Talent Management

Sage People found that 56 percent of organizations plan to adopt artificial intelligence (AI) into their recruitment process in the next 12 months, compared to just 24 percent who utilized the capability in 2020. AI-powered talent management can include resume assessments and candidate ranking. AI can also schedule and conduct video-based interviews that can predict how well a candidate will fit the role.

Digital Learning

Job seekers are prioritizing educational opportunities as they search for their next career move. Employers should attract talent by implementing online education platforms as an indication of investment in their employees’ careers. Digital learning solutions are overtaking classroom-based learning, and this trend will only continue into 2021.

What Is Internet of Behaviours and How Will It Be Prevalent Going Forward?

Internet of Behaviours (IoB) is the leveraging of data to influence behaviour. Organizations utilize available data to predict and influence human behaviour. Gartner predicts that by 2023, 40 percent of the global population will be tracked digitally in order to influence behaviour.

However, IoB is already here and prevalent in many areas of daily life, including:

  • Facial recognition
  • Location tracking
  • Big data

And while IoB offers several benefits (e.g., convenience of having synced digital devices), the collection of this behaviour-focused data leaves sensitive data at risk for cyberattacks. Property access codes, delivery routes, bank access codes and more are susceptible to cybercriminals.

Businesses should be vigilant and proactive in their cybersecurity efforts to ensure that data is secure and protected. Consider introducing cybersecurity training and awareness programs in your organization in order to stay ahead of cybercriminals.

TOP CYBER THREATS FOR 2021

As the world continues to rely more and more on technology, the need to address threats to cybersecurity becomes increasingly important. With 64 percent of organizations already having experienced web-based attacks, here are seven cybersecurity threats to be aware of in 2021:

  1. Phishing — Phishing occurs when a hacker tricks someone into providing sensitive information or accessing malware by using a false identity. This can happen through email, social media accounts and more.
  2. SMS-based phishing — This form of phishing, sometimes referred to as “smishing,” occurs through SMS text messages. The attack only happens after the link within the text message is opened. While emails are typically able to identify a phishing scam and filter it out, text messages with bad links can still come through.
  3. PDF scams — These scams occur when a PDF attachment in an email or messaging platform contains a link to malware or ransomware. Scammers know people are more likely to open a PDF attachment than a website link, especially if it’s been labelled as a statement balance or press release.
  4. Malware and ransomware — Malware and ransomware can lead to hijacked software, frozen systems, and lost and stolen data. Businesses often keep data on servers that are connected to the internet, and all it takes is one crack in a company’s cybersecurity for hackers to attack and access that data.
  5. Database exposure — Customer contact information, financial records and identity records are all susceptible to hacking and theft when servers aren’t properly protected.
  6. Credential stuffing — Credential stuffing aims to gain private access through the utilization of stolen login credentials. The most common occurrence of credential stuffing happens when the same login information is used for multiple websites and accounts.
  7. Accidental sharing — Accidents happen. But when accidents contain confidential and sensitive information, company cybersecurity can be at risk. This type of threat is usually the result of human error rather than a hacker or malware issue.

Experts predict that, by 2023, cybercriminals will be stealing nearly 33 billion records per year. Learn more about protecting your organization against these cybersecurity threats by contacting Reith & Associates Insurance and Financial Services Limited today.

Nikki Johnson No Comments

Contractors – Another Liability Exposure

By:  Dan Reith  BA(Hons) CAIB

        Principal Broker

        Reith & Associates Insurance and Financial Services Limited

As a contractor, you work hard to create a quality product and satisfy customer expectations while building a profitable business. However, no matter how careful you and your employees are during the course of business, mistakes can happen it’s a fact.  In today’s business environment, small disputes with customers over projects can quickly escalate into costly legal disputes.

Almost every contractor carries some form of general liability coverage. While these policies provide much-needed protection for bodily injury and property damage claims that occur as the result of a contractor’s work, they typically don’t account for all forms of negligence.

That’s where errors and omissions (E&O) insurance designed for contractors comes into play. Below, we provide a brief overview of E&O insurance and why it is a critical component to a contractor’s overall risk management program.

Why E&O?

Simply put, general liability policies are not adequate to protect against E&O claims, necessitating additional coverage. In fact, most general liability policies exclude claims related your work, your products and impaired property, creating significant insurance gaps.

Making E&O insurance even more crucial, contractors are particularly vulnerable to claims of negligence following unintentional damage to an insured party, impairment of property, damage to products or similar incidents that can occur without warning during a project. Even simple complaints have the potential to escalate into costly legal disputes.

What’s more, courts often rule against contractors in claims related to errors and omissions and, without the proper protection, general contractors would have to cover the damages out of pocket.

E&O policies can help contractors close gaps in their insurance coverages, providing coverage for claims related to the following:

  • Failing to complete projects according to specifications
  • Negligence in providing professional services
  • Poor, incorrect or incomplete work
  • Errors and oversights

Strong E&O policies can protect you and your business following a claim, helping you cover expenses related to court costs, lawyer fees and settlements. It should be noted that E&O insurance may not extend to your subcontractors, and you should encourage them to secure their own policies.

Sample Claim

To further understand the benefits of E&O insurance consider the following example. A window and doors contractor was hired by a developer to install all of the windows on a new apartment complex. While most of the work was completed to specification, the contractor incorrectly measured some of the windows. Accordingly, the windows in many of the units did not lock properly. The windows in these units had to be removed and reinstalled.

With E&O coverage, the contractor would not have to pay for those expenses out of pocket. What’s more, had the client sued the contractor over this work, the contractor’s E&O insurance would have covered awarded damages and defense costs within the limit of the policy.

Securing the Policy That’s Right for You

As a contractor, there are a variety of insurance products to consider. To ensure you are accounting for all of your unique risks—and to secure a policy that is tailored to meet your specific business needs—it’s important to work with a qualified insurance broker.

Contact Reith & Associates Insurance and Financial Services Limited today to learn more.

Nikki Johnson No Comments

Contractors & Pollution Liability – The Risk Is Real

By:  Dan Reith  BA(Hons) CAIB

        Principal Broker

        Reith & Associates Insurance and Financial Services Limited

Contractors, no matter what industry they work in, face environmental risks stemming from operations on a daily basis. For most contractors, a single pollution incident or loss can seriously damage their operations, balance sheet and even reputation. Making matters worse, pollution incidents can be sudden or occur gradually over time. The reality, however, is most contractors do not appreciate the reality of the risk and chose not to protect themselves or their customers.

While many contractors assume that environmental claims will be covered under their commercial general liability (CGL) policy, the unfortunate reality is the most CGLs contain pollution exclusions that leave contractors uninsured in the event of a pollution incident.

The solution: contractors pollution liability (CPL) insurance to ensure they have the right coverage in place to remain secure and profitable.

CPL Coverage Basics

CPL policies provide contractor-based insurance for third-party coverage for bodily injury, property damage, defence, and cleanup as a result of sudden and gradual pollution incidents arising from contracting operations performed by or on behalf of the contractor. CPL insurance is intended to provide coverage to all types of contracting operations, including contractors who are involved in building construction and environmental firms that remediate polluted sites.

CPL policies are offered on either a claims-made or occurrence basis. What’s more, CPL policies are non-standard, meaning each policy is different and can be modified to cover the various needs of the contractor purchasing the policy. Policies can be offered on a project or blanket program basis.

In some instances, CPL policies can also be used to cover losses from civil fines, penalties and punitive damages.

Covered Pollution Incidents

Contractors should keep in mind that CPL insurance policies differ in regard to the types of pollution incidents that are covered. Two important considerations when evaluating CPL insurance policies are:

  • Whether or not the policy will respond to gradual releases of pollutants, as opposed to sudden and accidental releases; and
  • The types of substances that are considered “pollutants” under the terms of the policy.

Generally, policies that cover both gradual and sudden releases of pollutants provide contractors with a broader scope of coverage. In addition, policies that provide a broad definition of pollutants are considered superior to those that contain a narrow definition. Accordingly, it is important that contractors work with their broker to find a CPL policy that is tailored to their needs.

CGL Pollution Exclusions

A primary reason why contractors obtain a CPL policy is due to the various pollution exclusions contained in most CGL policies. The pollution exclusions found in most CGL policies take one of two forms, either “absolute” or “total.”

CGL policies with an absolute pollution exclusion remove coverage for most pollution events that would occur in the course of an insured’s business operations. However, despite its name, an absolute pollution exclusion may preserve coverage for certain incidental pollution damages, products and completed operations liability, and certain off-premises work.

However, more commonly, CGL policies include a more restrictive “total pollution exclusion.” This type of exclusion effectively removes coverage for any event the insurer characterizes as a pollution incident.

Contractual Requirements

Contractual requirements serve as another motivating factor that lead many contractors to obtain a CPL policy. In many instances, project owners and general contractors will require contractors to obtain pollution insurance that meets certain, predetermined standards. From this perspective, having a CPL insurance policy in place can serve as an upfront sales tool during the bidding process that enables contractors to qualify for opportunities when such coverage is required.

Finding the Right Policy

Regardless of specialty, all contractors should be mindful of the pollution risks associated with their work. A CPL insurance policy can provide much-needed security in the event of a pollution incident, even in the most unlikely of circumstances.

CPL insurance is not only good for business, but it also provides peace of mind in industries that are full of surprises and risks. Reith & Associates is available to work with your organization to find the CPL coverage that is right for you.