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Federated Insurance’s Wendy Kelley (left) and Tyler Nohr. Photo by Mike Miazga/ASA

Wendy Kelley and Tyler Nohr, of ASA Association Partner Federated Insurance, recently gave an eye-opening presentation to attendees of the Western Suppliers Association annual meeting in Napa, California, with a particular focus on cyberattacks and employment practices, specifically non-ADA-compliant company websites.

“Commercial insurance is an ever-changing landscape with new risks and exposures every year,” Kelley explained.

Kelley said an overlooked area is harassment and discrimination toward a company’s customers, vendors or other non-employee groups. This third party harassment and discrimination can include non-ADA (Americans with Disabilities Act)-compliant websites.

“We are seeing a surge of these claims currently,” Kelley said. “Accessibility options need to be added to websites to assist those consumers who need special tools to gain equal access to the information or products you offer on your website. Talk to your website specialist for more information on this ADA-compliance requirement.”

Kelley added harassment, discrimination, wrongful termination, retaliation and hostile workplace claims also are all on the rise.

“Business owners are smart to incorporate clearly defined human resources policies that state a no-tolerance policy for any of these behaviors in the workplace,” she said. “The policy should be communicated during onboarding and reviewed annually with every employee.”

A procedure for employees to safely report if they have experienced any workplace harassment also needs to be established and any violation quickly investigated and documented, Kelley noted.

“We are seeing increasing claims involving the workplace,” Kelley said.  “Make sure you ask your current agent about this coverage. It is not included in your general liability policy. These claims are very prevalent and having the insurance in place before there is a problem is crucial. Without solid HR policies in place, exposure for high-dollar claims becomes very likely.”

Cyberattacks

Kelley and Nohr noted over the last few years, COVID has created a more online community than ever before, shedding a spotlight on cyber liability and cybercrime.

“Unauthorized users (hackers) are very sophisticated, and the increased amount of security breaches is causing much pain as customer and employee information could be collected and distributed for financial gain,” Kelley said.

However, data breach is just scratching the surface of Cyber exposure, Kelley explained.  

“We are seeing more and more losses related now to social engineering,” she said.  “With social engineering, computer networks can be hacked and malware released within the system that watches patterns of emails, observes calendars for owners and key people and gathers other valuable business information.”

The malware can be present in the network without anyone knowing for as many as 60 days or more before anyone notices that the system has been hacked, Kelley said.     

“The malware is able to imitate emails, create false requests for wire transfers or send fraudulent invoices to or from the business network,” she said. “No one knows what other tactics the unauthorized users will launch and how extensive the damage to a business could be.”

Kelley said a first step is knowledge and seeking protection.   

“Cybercrime is a moving target and while there might not be coverage for every scenario, it is very important that you protect your business by having the best network security available for your business and exploring cyber insurance coverage options,” she said.

Auto liabilities

Kelley and Nohr also talked to attendees about auto liability claims. “The cost of bodily injury lawsuits has skyrocketed,” Kelley said. “More than ever, people are distracted while driving and accident-related lawsuits are reaching unprecedented levels.”

Kelley explained the insurance industry is seeing nuclear verdicts and settlements that were once predictable have become unpredictably high. “What would once settle for $100,000 will now settle for $1 million or more,” she said. “Business owners need to protect themselves by focusing on risk management practices that become their culture.”

The use of a solid driving policy, screening drivers and not allowing marginal drivers to drive are all best practices to prevent accidents, Kelley noted. The use of GPS, cameras, tracking systems and telematics are becoming not only the norm, Kelley continued, but expected if a company has a fleet of vehicles on the road.

“Defense is your best offense, and setting expectations with your driving standards and the methods you use to ensure your drivers are operating vehicles safely will not only make you more defensible if an accident does happen, but also will save lives,” Kelley said. “It is imperative business owners understand how to better protect themselves using risk management and keeping your fleet as defendable in court as possible.”

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