Cyber risk insurance: New coverage for emerging risks

It seems you can’t turn on the news without hearing about a cyber-related crime or incident.

Criminals are increasingly using ransomware as a means of extortion. Ransomware is a form of malware, usually delivered by email phishing scams, that locks victims out of their critical data until they pay the criminals a fee. The FBI received more than 2,400 complaints about ransomware in 2015, with a reported loss of more than $24 million. Authorities believe the actual costs could be much higher because the crime is underreported. The Department of Justice estimates that these ransomware attacks now average 4,000 per day – that’s a 300 percent increase over 2015.

Headlines usually describe breaches of sensitive customer data suffered by large, well-known companies. In reality, most cyber-attacks are not high-profile cases but softer targets, such as small- to medium-size operations. No business or industry is immune to cyber risks. Lost or stolen mobile devices, improper disposal of paper records or deficiencies in system malware protection can lead to a breach or attack.

The good news is that insurance coverage is available that can be tailored to protect your business from cyber risks.


Small- to medium-sized businesses should consider coverage for:

response expenses, including forensic IT and legal reviews, notification to affected individuals, public relations expenses as well as fines and penalty coverage
third-party defense and liability
identity theft recovery
protection from computer attack on your network, including data restoration and re‑creation costs, system restoration expenses, loss of business income and public relations services
network security liability in case there is a breach of third-party business information, unintended spreading or forwarding of malware or a denial of service attack


If your business stores large quantities of sensitive information, for example, financial institutions, health care organizations or schools, ask about cyber defense coverage which may include:

cyber extortion coverage
electronic media liability coverage
access to online risk management and educational resources


With or without insurance coverage, you can take steps help prevent loss:

  • encrypt data
  • patch system vulnerabilities
  • shred sensitive documents
  • educate your employees on topics such as email phishing scams
  • develop and test contingency plans

    Speak to your  Ayres Group agent about the coverages that are right for you.

Play it safe during your hotel stay

Whether you travel for business or leisure, consider increasing your safety awareness when you stay in a hotel.

  • While most top properties are in safe areas, you may want to research before booking a room in an unfamiliar city or neighborhood to confirm. Call the community resource officer in the police jurisdiction responsible for the area where the hotel is located, or use free online research sites such as the FBI’s Uniform Crime Reporting tools or
  • Be careful about sharing your travel plans on social media. Make sure your settings are private; avoid making public posts to protect yourself while you are traveling and your home is unoccupied.
  • Choose a hotel that is adequately protected from fire. Check the U.S. Fire Administration’s Hotel-Motel National Master List to find hotels that have:
    • At least one single-station and hard-wired smoke alarm in each guest room
    • An automatic fire sprinkler system in each guest room if the building has four or more stories. More information about hotel fire safety is available in our blog, Planning a hotel or motel stay? Think about fire safety.
    • Pack a flashlight that you can keep on the hotel nightstand in case you need to escape in the dark.
  • Take only those valuables that you will absolutely need for the trip.
  • Limit the number of times you say your name and room number during the check-in process. At any given time, a number of people could be within earshot of the front desk.
  • Do not keep your room key in the envelope provided at check-in. Securely discard the envelope, which may contain identifying information, such as room number and last name.
  • Keep a close eye on your luggage while in the lobby.
  • Upon entering your guest room, verify that all sliding glass doors, windows and connecting room doors are locked and secure.
  • Inspect mattresses for bedbugs. Check the U.S. Environmental Protection Agency’s article on How to Find Bed Bugs to learn how to inspect a mattress and accurately identify a bedbug infestation.
  • When you are in your room, be sure to engage all locking mechanisms on your guest room door, including deadbolts, chain and safety bar.
  • Do not open the door to your hotel room to unknown persons. If you are not expecting a hotel staff person, call the front desk to verify his or her identity before opening the door.
  • If returning to the hotel late in the evening, use the main entrance.
  • Keep valuables locked in the room safe or inside your luggage.
  • Exercise discretion when providing your name and room number while in the hotel restaurant or bar.
  • Pay attention to cyber security if you use a computer or mobile device on hotel Wi-Fi systems. Don’t assume that the Wi-Fi connection is secure.
  • When available, use a hard-wired connection or a personal Wi-Fi hotspot rather than a public Wi‑Fi connection.
  • The Federal Trade Commission has posted a video with tips on how to keep your connections secure.

Weathering the storm in an uncertain market

Tired of watching the stock market and seeing the value of your investments fluctuate on a daily basis? Consider purchasing a deferred or immediate annuity to protect and grow your savings into the future.

An annuity is a contract with an insurer that provides an income for life, a specified number of years, or a combination of the two. Annuities can offer diversity and safety when part of a holistic investment plan and can protect your principal and interest earned.

Before you purchase an annuity, consult with your legal, tax, investment and insurance advisers, just as you would before making any changes in your investment plan. Understand the differences between the types of annuities available.


Deferred annuities offer several advantages, including a guaranteed minimum interest rate for the life of the contract, tax-deferred growth, no up-front sales charges or fees and flexible withdrawal options. Another advantage is that if you die with remaining funds, a typical annuity bypasses probate and passes directly to your named beneficiary. Flexible payout options allow you to choose a monthly payment for the rest of your life; for a specific time period (called period certain); as joint payouts that can pay a survivor after your death; or a combination.


Immediate annuities require an upfront lump-sum payment for a guaranteed lifetime income amount. These payouts can be arranged to go solely to the owner or can have a provision to pay for a specified period of time or to another person. The important thing to remember with a life-only payout is that when you die, no further payments are made. When purchasing an immediate annuity, consider your life expectancy and the necessity of money being passed along to heirs if an unforeseen death occurs.

No matter if you choose a deferred or immediate annuity, guarantees of interest rates, income or principal are the main advantages to purchasing this type of investment. Safety and peace of mind go hand-in-hand with incorporating an annuity into an investment portfolio.

Reducing liquor liability before the first drop is poured

Failing to act responsibly when serving alcohol could be catastrophic for your business. You could be held accountable for any death, injury or damages caused by an intoxicated patron, resulting in expensive civil or criminal litigation, fines, increased insurance rates, loss of your liquor license – even the loss of your business. Safeguards can reduce the risk.

Consider that every two minutes a person is injured in a drunken driving accident, and driving while intoxicated cost the United States $132 billion in 2011, according to Mothers Against Drunk Driving. In 2014, alcohol-impaired crashes accounted for nearly one-third of all traffic-related deaths in the U.S., according to the U.S. Centers for Disease Control and Prevention. Golf courses, hotels, restaurants, craft breweries and other hospitality-related service businesses are especially vulnerable.

Educate your employees by taking these steps to jumpstart this very important conversation:

  • Train your employees in safe alcohol service. Responsible drinking begins with responsible service. Enroll your bartenders, servers and staff in an alcohol service certification program.
  • Always card everyone. No matter how old your patrons appear to be, everyone should present their IDs if they look 40 years old or younger. You never want to risk inadvertently serving a minor.
  • Create official protocol for handling inebriated guests. This gives, your employees the knowledge and confidence to respond to difficult situations in a consistent manner.
  • Develop a call-a-cab program. Establish clear policies about when to give a restaurant, bar, or hotel customer an alternative to get home safely. There are many ways to establish such a program, and it is a business decision; some restaurants, bars and hotels may already have an arrangement with a local cab company.
  • Don’t give away free drinks. This encourages overdrinking. Instead, try giving away free appetizers that will help slow the rate of alcohol absorption.

While avoiding liquor liability entirely may not be possible, having a plan in place to control your exposure can help protect your business, employees, patrons and the public.

Fire danger in the construction zone

Fires are a significant hazard on construction sites.

According to the National Fire Protection Association, there were an annual average of 830 fires in residential buildings under construction from 2007 through 2011, excluding one- and two-family homes. These fires caused an average of $56 million in direct property damage per year. Over those same years, there were an estimated 400 fires annually in large residential buildings undergoing major renovation, causing an average of $17 million in direct property loss per year.

But proper planning and monitoring can improve your chances of completing a project without incident.


Before beginning a construction project:

  • Review the construction site, contemplating adjacent exposures that may affect the project
  • Look at how accessible the site would be for firefighters and their equipment
  • Develop a site-specific fire prevention plan, educating employees about what to do in case of fire
  • Establish a Hot Work Permit program that requires operations involving any sparks, open flames or heat-producing activities to follow safety protocols before, during and after work has been completed.

Throughout construction, conduct thorough on-site inspections. Trained representatives of your project management team should inspect the site daily and retain all documentation. Inspections should include:

  • Active construction areas
  • Material storage areas, including special consideration for flammable items
  • Construction trailers and temporary structures
  • Site perimeter and adjacent property exposures
  • Mobile construction equipment storage areas
  • Per the NFPA, the leading equipment causes of construction fires are:
    • cooking equipment (40 percent)
    • heating equipment (29 percent)
    • torch, burner, or soldering iron (6 percent)
    • electrical and lighting equipment (6 percent)
    • shop tools and industrial equipment (5 percent)
  • All construction trailers, storage trailers and offices should be made of noncombustible material and be at least 50 feet away from the construction site and at least 30 feet from each other.
  • Fire department site access areas must be clearly identified, maintained and unobstructed at all times. Access to fire hydrants or qualified water supplies for firefighting must be readily available whether adjacent to or within the boundaries of the project site.
  • Store all combustible materials safely and consider ordering them as needed to minimize the amount on hand. Spontaneous combustion of paint solvents, oily rags and similar materials discarded with trash can lead to a major loss.
  • Establish and strictly enforce a no smoking policy throughout the duration of the project.
  • Provide fire extinguishers, rated not less than 2A, for each 3,000 square feet of the protected building area. The travel distance from any point of the protected area to the nearest fire extinguisher must not exceed 100 feet per Occupational Safety and Health Administration standards. When there are multiple levels, OSHA requires an extinguisher be placed near the staircase on every level.
  • Enforce good housekeeping in areas around permanent electrical installations, preventing accumulation of debris or combustible materials near live electricity. Temporary electrical equipment should have ground fault circuit interrupters.
  • Install and activate an automatic sprinkler system as soon as possible after the building shell has been completed.
  • Collect all demolition and construction material as soon as possible. Removal of discarded materials should be done by a qualified disposal service on a regular basis – daily, if necessary –to eliminate accumulation of refuse. Position dumpsters away from buildings. Use metal containers with close-fitting lids for rags. Avoid burning any refuse, but if unavoidable, burn at least 150 feet from buildings. Some jurisdictions prohibit open burning; remember to follow any local burning bans and observe any red-flag warnings in wildfire and forest fire areas.
  • Provide safe temporary heaters. Secure them on a solid base away from any woodwork and keep the floor free of all combustible material. Before leaving, be sure the heater is turned off.

Fire exposures are high and constantly changing throughout the course of construction. Key personnel on site must always know it’s their responsibility to follow fire control procedures. Contractors have a responsibility to make sure that a fire control plan is specific, adequate and – most importantly – executed.



Are you properly insuring your other structures?

There’s more to your homeowner policy than just coverage for the house you live in. It also provides coverage for other structures on your property.

These may include all structures and buildings not sharing a foundation with your house. Most insurance policies provide 10 percent coverage for other structures. For example, if you insure your home for $200,000 an additional limit of $20,000 applies to all other structures. Remember that if you have a total loss, you don’t receive $20,000 for each structure, but $20,000 total for damage to all other structures. A large detached garage by itself can exceed this amount in many cases.

So how do you know you have appropriate coverage?

If you have detached structures on your land, it is best to consult with your Ayres Group independent insurance agent to discuss options. A pool house, large barn, garage with living space, fence, freestanding deck and stable may fall into different categories, and your agent can help make sure you have the correct coverage to protect you in the event of a total loss.

While the chances of losing all your other structures at one time are small, you want to secure enough coverage to protect your investments. You may need more than the 10 percent standard coverage for appurtenant structures.

Also consider that many different types of structures could qualify for coverage on your policy, and it’s important to select the correct category based on usage. Your agent can advise you on the information you will need to provide to obtain the coverage that’s right for your situation.

A good example is a barn. Barns can be built in many different ways from a variety of materials. By providing accurate information on usage and construction, you can be assured that your property is protected.

If your other structure is being rented, is used for a business or was not reported, you are most likely not adequately insured. Your agent has the expertise to guide you.

Finally, don’t forget to assess how much insurance protection you need for personal property housed in your other structures. For example, a home woodshop in your barn could have valuable equipment you’ll want to protect. Ask your agent for advice.

The best way to look at it is to think of insuring your other freestanding structures the same way you would your home. You want 100 percent coverage for each structure in the event of a loss. Replacement of these structures is typically less expensive than a home, but those costs can add up and represent a significant loss.


Remember insurance as college students head back

Back-to-school time is a good time to review your insurance if you have a student headed back to college. Remember to talk to your Ayres Group insurance agent for advice to make sure your student’s car, electronics and other belongings are covered. Some coverage may extend from your own personal insurance policies, but individual circumstances can vary. Your agent will know how to help.

As the summer winds down, millions of college students will be heading back to dorms or apartments all across the country. If your child is among them, you probably have made sure that your student has the necessary bedding, shelving, futons and electronics for a successful year.

But have you considered whether these items will be covered if lost or stolen?

Remember to check with your insurance agent before your child returns to school to see whether your personal homeowner policy extends your homeowner contents coverage to your child’s possessions in a dorm room or apartment. Your agent can also advise you whether or not your homeowner liability coverage may also extend to your child while living away at school.

Are you planning to send your child to school with a car? Your agent may need to amend the address to reflect your child’s address at school. This is known in the insurance industry as the “garaging location,” whether or not a garage is involved. Keep in mind that distance from home may be one factor in the premium cost for your policy.

And even if your college student will not keep an auto at school, it’s important to keep your agent in the loop. The child may be rated differently, possibly resulting in a savings of premium for you. When your student is no longer a year-round member of your household, he or she does not have full-time access to the vehicles on the policy.

Sending a child off to college or university can be an exciting and challenging time for parents. Ease your mind by talking with your Ayres Group insurance agent to ensure you and your child have the proper coverage while away at school.


Renting a home while on vacation? Check your policy

Many families enjoy the convenience of renting a beach home or mountain cabin for a vacation getaway. But the last thing you want to think about while on vacation is being liable for damage to that rental home or to worry about your personal belongings.

Most homeowner policies provide two important coverages to consider when on vacation: personal property coverage and liability coverage. Before you rent a vacation home, check to see how your policy would respond in the event of a loss. In some cases, you may need to purchase additional coverage.


A homeowner, tenant or condominium policy protects against losses to your personal belongings, up to the limit provided by the policy. This coverage generally applies if your belongings are damaged while at your own home, in your car or while on vacation.


Most homeowner policies also include coverage for liability from bodily injury, property damage and personal injury (for example, false arrest, malicious prosecution, libel, slander, invasion of privacy or wrongful eviction)

Accidents happen, and you don’t want to be caught off guard if you or a family member were to break a window or damage property belonging to the owner of the vacation home. Knowing how your policy will respond ahead of time will help you better plan for the unexpected.

Most homeowner policies exclude coverage to property rented to an insured unless it was caused by water, fire, smoke or explosion. Policies generally offer coverage up to $1,000 per occurrence for damage to property of others. This limitation applies to the personal property usually kept in the vacation home that the insured does not own, for example, the furniture, appliances, linens and dishware that are available for use while renting that home.

But even if your homeowner policy excludes these coverages, there are options to secure comprehensive coverage for property damage to the rental vacation home. Many companies that manage vacation rental homes allow the customer to purchase insurance coverage with the rental contract.

Remember to review coverage options available when deciding what home to rent for vacation, and know what you are responsible for in the event of a loss.

Also, if you have a personal umbrella policy, most personal umbrella policies will provide property damage liability coverage for a loss, without a deductible. The coverage on the personal umbrella policy is not limited to water, fire, smoke or explosion. If you have a personal umbrella policy, it may not be necessary to purchase the insurance coverage through the vacation rental company.

Before your vacation getaway, contact your local Ayres Group agent to review your coverages. Then you can relax and enjoy!

Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent.


The benefits of working with an independent agent

After a lot of saving and planning, my sister and her family bought their dream home. Sadly, a storm damaged their roof, and she’s had difficulty resolving her claim. Her family did not purchase their insurance through an independent agent. I encouraged her to give her carrier the opportunity to see things through, but I also suggested that once her claim is resolved, she might consider an independent agent to help her better determine the right carrier and insurance products for her family’s needs.

My sister and her husband are busy with their jobs and kids, and it never occurred to them to research insurance options. After their recent experience, they are coming to understand that how your insurance company treats you when you have a claim matters.

My sister hadn’t considered why it’s advantageous to partner with an independent insurance agent and actually didn’t know the difference between independent and captive agents (agents who represent one company). Like many people, she hadn’t thought about the various ways of buying insurance and the differences among them. It’s easy to compare the concept to buying shoes for her kids.

Quality: My sister wants the highest quality shoes that she can afford for her children. After all, those shoes are what will protect their feet and carry them on all their daily adventures. Likewise, you want the best insurance products your money can buy to protect your belongings, and an independent agent can offer them to you. Independent agents are business owners who select the most desirable carriers, apply to represent them and sell their insurance products. So when agents represent a carrier, it’s because they believe in the carrier enough to associate their own business’ name and reputation with it.

Selection: Instead of going to a store that carried only one brand of shoes, my sister would go to a store that offered a variety of quality brands with different features and styles. Similarly, an independent agent offers a selection of products to meet clients’ needs, whether the clients’ focus is on claims service, specialized coverages or even cost. Independent agents ask questions, listen and make recommendations – maybe your child will soon be old enough to drive, you have a special collection to protect or you plan to buy a rental property. Whatever your situation, your agent has options to match you with the appropriate carrier and insurance products.

Knowledge: My sister would never guess at a size; she’d ask an informed employee for help measuring her children’s feet to make sure they got the appropriate fit. She would ask about wear and durability and get the facts from the sales person who knows the products better than anyone. In the same manner, independent agents know the benefits of each carrier and nuances of each product and can provide you with the details to help you make informed decisions. You can be confident that your independent agent has the expertise you are looking for.

Obviously, insurance is far more important and complex than shoes! But if my sister would put the effort into making sure she bought the best shoes for her children, doesn’t it make sense to apply a similar process to ensure the right protection for her home and autos?

It’s easy to “check the box” and buy online. Voila – you have insurance! But partnering with an independent agent can help you make sure you have the right amount and type of insurance coverage from a carrier that he or she trusts to protect what matters most to you.

For more information contact The Ayres Group

Insurers help employers make workplaces safer, avoid potential fines

Employers can protect their workers and avoid costly fines by implementing workplace safety programs, and their insurers may be able to help. Insurance company loss control consultants can help implement safety programs, provide training and connect employers with resources to make their workplaces safer.

Now is a good time to request this support, as employers who violate workplace safety regulations will find that fines are about to get a lot more costly.


The Occupational Safety and Health Administration is increasing its civil penalties for all employer violations of workplace safety regulations effective August 1, 2016 – the first such increase since 1990.

The federal Bipartisan Budget Act of 2015 sets criteria for OSHA to increase its civil penalties. The first adjustment in 2016 is considered a one-time catch-up adjustment, and fines could rise approximately 50 to 80 percent.


Employers should note that once the catch-up adjustment is implemented in August 2016, OSHA’s civil penalties will not remain stagnant. By law, penalties must increase annually. Beginning in 2017, annual inflation increases will be calculated based on the Consumer Price Index.


About half the states have OSHA-Approved State Plans for workplace safety enforcement with maximum penalties set by state law. These are unaffected by the Bipartisan Budget Act. However state plans must be at least as effective as OSHA, so states are likely to increase their civil penalties.


While an OSHA citation can be costly, the health and safety of employees is on the line when safety standards are not enforced in the workplace.

For assistance with implementing a safety program, training and other measures, please contact your local Ayres Group Agent