New York Paid Family Leave

As you may have heard in the news, the New York State (NYS) Paid Family Leave (PFL) program was signed into law last year and will become available to eligible employees on Jan. 1, 2018. Covered employers will be required to provide all eligible full- and part-time employees with job-protected leave for qualified reasons, including:

• Bonding with their children during the first year of birth or adoption
• Taking family leave before the placement for adoption or foster care to proceed, if required
• Caring for a covered family member with a serious health condition
• Dealing with certain exigencies arising when a covered family member is called to active military service

The New York State Department of Financial Services (DEFS) has announced, "The amount of the per-employee payroll deductions, the maximum employee contribution for coverage beginning January 1, 2018, shall be 0.126 percent of an employee's weekly wage up to and not to exceed the statewide average weekly rate," which is currently set at $1,305.92. For employees who earn more than $1,305.92 per week, the NYS PFL deduction will be capped at $1.65 per week (0.126 percent of $1,305.92). The deduction percentages and caps may change annually: the deduction percentage may change on Jan. 1 and the cap may change on July 1.

NYS PFL insurance coverage is designed to be funded through employee payroll deductions; however, employers may choose to cover the premium payments and not deduct contributions from employees.

The number of weeks of leave available to eligible employees under the NYS PFL and the benefits paid will be phased in over several years. The phase-in schedule is:

In the initial year, eligible employees may take up to eight weeks of leave in a 52-week period for qualifying reasons and receive the lesser of 50 percent of their average weekly wages (AWW) or of the NYS average weekly wage.

PFL is set to enter a space occupied by other regulations — most notably FMLA. And while the two are intended to provide some of the same protections, PFL takes the basic concept behind FMLA several steps further.

FMLA, or The Family Medical Leave Act, has been in effect since 1993 when it was enacted to provide 12 weeks of unpaid job protections for eligible employees at covered employers. Originally introduced with the recommendation of 6 months of leave, it underwent revisions to ease the burden on employers and make accommodations for the types of businesses that would be affected.

Until recently, FMLA has been the only piece of legislation that allows employees to take unpaid time off from work for an extended period (12 weeks) without having to fear employer retribution or reduction or discontinuation of health care benefits.

As the benefits of providing protected time off to care for families have become more apparent in recent years – both economically and socially – many states, including California and New Jersey, have taken it upon themselves to expand on the protections offered at the federal level by FMLA.

Stay Safe During Hurricane Season

When a major storm is forecast, homeowners should take the proper precautions to maintain the safety of their families, minimize any potential damage to home and property, and prepare to address any damage if it does occur. A building or home doesn't have to be located in a high-risk area to suffer flood damage. In fact, nearly 20 percent of all National Flood Insurance Program claims come from outside mapped high-risk flood areas.

Consider These Preparation Tips

• Make sure you have a safety kit with basic requirements, including food, water, necessary medications and cash.
• Include extra clothing in case you have to evacuate.
• Have a stash of flashlights, charged cell phones, portable radios and extra batteries.
• Don't forget the first aid kit!
• Secure loose items outside of your home and business.
• If you have a backup generator, make sure it has fuel and is in working order.
• Identify the safest place to remain in your home as far away from unprotected windows and doors as possible.
• Locate important personal or business documents and store them in a waterproof place.
• Fuel all vehicles in case you need to evacuate. Power failures will render most gas pumps inoperable.
• Gather insurance policies (e.g., home, auto and medical) and relevant contact information.
• If you haven't already done so, document the contents of your home with digital pictures or video and create a room-by-room inventory, if possible.

Follow Post-Storm Safety Guidelines

• Clear debris where possible, wearing protective clothing and gloves.
• Check buildings for structural problems.
• If the area has been evacuated, wait for clearance from governmental authority to return.
• Don't attempt to cross flooded areas either on foot or by automobile.
• Avoid any downed wires and contact appropriate utility companies.
• Have any concerns with gas, electric, water or sewer lines checked by a professional.
• Discard potentially spoiled food.

Notify Insurance Carriers, If Necessary

• Notify your insurance carrier immediately if you believe you'll have a claim to file.
• Take photographs or video to document the extent of the damage.
• A separate hurricane or wind deductible may apply, depending on your coverage and the nature of the storm.

Keep in mind that flood damage is typically not covered under a homeowners' policy and may be limited on a business program. Before disaster strikes, make sure you and your family are prepared.

Stay Safe from Ransomware

News of ransomware attacks floods the news almost daily. WannaCry, Petya, CryptoLocker — it's hard to keep the attacks straight and for breach fatigue to not set in. Ransomware is malicious software (aka malware) used by attackers to encrypt portions or all of a network and demand an extortion payment to allow the victim access back into their network. Typically, attackers demand an extortion payment in untraceable currency, like Bitcoin, and provide a decryption key in exchange for payment. There are no guarantees that the key is correct, that attackers have vacated the compromised network, or that they won't come back and demand another payment later.

Ransomware has a lot of variants online and attackers consistently find new vulnerabilities to launch further attacks. Attackers have breached municipalities and businesses of all shapes, sizes and industries, in some cases stealing data after penetrating the network and in some cases, just using their access to extort victims. In essence, ransomware attackers can make money simply off of their ability to simply access a business network; it doesn't have to steal the data on the network to be "effective" or profitable.

So, what should you do if your organization is the victim of ransomware? Beware! There are countless examples of highly trained attackers using ransomware as a screen or diversionary tactic. They may launch a ransomware attack after covertly stealing terabytes of W-2 data, customer information, trade secrets, invoice data, etc. — data they ultimately use to make far more profit. In such a two-pronged situation, the business owner thinks it was a simple ransomware attack, pays the ransom and – voila – the attacker has quietly stolen the crown jewels right from under the CEO's nose. Months later, the CEO realizes profits are down and then hires an outside incident response firm, only to realize that the attackers are 6 months ahead of being caught.

There are a lot of great resources out there that offer some solid advice when it comes to protecting yourself and your organization from ransomware and other cyberattacks. Here's another, more systems-based approach to add to your defense arsenal.

• Standardize Your People, Process and Technology. These three big buckets should be standard. Train your people with the best practices, know your organization's processes for securing your networks and responding to breaches, and make sure your technology is updated and audited regularly for evidence of malicious activity. You don't want a months-old hack haunting you because you didn't see it in the first place.
• Invest in Patches and Updates. Invest in updates and patch your organization's software regularly. Implement a policy and clear, thorough guidelines for regular updates to ensure holes are patched across your enterprise.
• Employ Multi-Factor Authentication. Why stop at one point of entry when you can have two? Where you can incorporate multi-factor authentication, do so. Use two-factor authentication for remote entry to your network, such as employee VPN access, to strengthen your defenses.

Event Cancellation – A Lesson in Terrorism Coverage for the Sports & Entertainment Industries

The purchase of event cancellation insurance plays an integral role in the planning and overall risk assessment of sporting and entertainment events. The serious financial consequences involved as a result of the unavoidable cancellation, postponement, abandonment, interruption or relocation of an event can be devastating. Losses such as ticket refunds, lost sponsorship revenue, irrecoverable expenses, advertising costs and lost merchandise revenue can be protected under an event cancellation policy.

The insurance landscape for event cancellation coverage is dynamic, with underwriters keeping a watchful eye on potential new perils. World events such as the Zika virus outbreak and the recent terrorist attacks in London and Paris have a direct impact on the availability and pricing of this coverage. An increase in terrorist activity worldwide has created growing concern among event cancellation underwriters. If this type of activity continues to rise in frequency, rates for terrorism coverage will increase and terms and conditions will become more restrictive. Sporting events and concerts involve stadiums and venues where thousands of fans are gathered, which makes them prime targets for terrorists.

There are several options for terrorism coverage for the insured to consider when purchasing event cancellation insurance. Each option carries a different premium rate. For example, the "TRIA" terrorism option provides the least coverage and is limited to acts of terrorism certified by the U.S. government. This option is limited in scope, and the insured is only protected to the extent that the carrier is reimbursed by the U.S. government. The broader, "Full Terrorism" coverage option is also available and can include coverage for threats of terrorism. Be mindful of any limitation on time or distance which narrows coverage. "Full Terrorism" coverage may be enhanced by including coverage for acts of terrorism involving "nuclear, chemical and biological" weapons. This option provides the broadest terrorism coverage available in the marketplace.

In addition to terrorism, perils typically insured under an event cancellation policy may include:

Communicable Disease – In light of the outbreaks in recent years of Zika and Ebola, this peril should be insured under an event cancellation policy.

Adverse Weather – Outdoor sporting events and concerts, for example, face the challenges presented by extreme weather, such as heavy rain, hurricanes, snowstorms and high winds. Adverse weather can also cause travel delays due to airport closings that may result in the cancellation or postponement of an insured event.

Civil Authority – Local authorities could shut down the event venue or prevent access to the venue due to concerns for public safety.

National Mourning – National tragedies such as the death of the President of the United States or other head of state could cause the delay, interruption or cancellation of an event.

Non-Appearance – The non-appearance of a performing artist or a percentage of the participating teams can be insured against.

Nuclear Radiation & Contamination – A leak at a local nuclear facility that causes the cancellation of the event can be insured.

For more information, contact Leigh Ann Rossi at 516-327-2869 or lrossi@bwd.us.

Artificial Intelligence and Our Futures

Self-driving cars? Chat bots that can pass the Turing test? With the continuing advancement of modern technologies, you're probably aware of the increasingly relevant concept of artificial intelligence, or AI — the development of a computerized system which can, through sophisticated algorithms, replicate and carry out tasks that are complex enough that they usually require human input. Examples of AI-possible tasks include decision-making, speech recognition and reviewing samples of information.

Industries within the business world – including the insurance industry – are beginning to look into AI as a means of improving their workplace efficiencies by delegating simple tasks and procedures to AI devices like IBM's Watson. Businesses use AI today for chat bots for customer service and data analytics, among other applications. AI is still in the early development stages, though, and the complexity of services and tasks that can be carried out by these systems is still limited.

Where Does AI Fit into the Daily Insurance Workplace?
There are successful cases where insurance companies like Ageas, Zurich and AIG have employed AI for their claims and underwriting processes, for example. Such activities involve providing quotes, processing payments and answering policy questions. Again, the technology isn't fully developed yet — but where AI could greatly increase office efficiency is by taking over some of the simpler, more repetitive and mundane. Think of all the time that could be saved using a chat bot when a claimant calls to check in on the status of a claim! Or how raw computing power might improve predictive analyses and the ability to fully utilize the data in a company's system. AI could theoretically plug in data for a specific client, compare them to the industry's set of data and generate a premium quote through predictive algorithms for underwriters based on certain percentages of profitability. From there, AI could run a trend analysis on the client's loss runs and provide a set of loss-control initiatives and best practices for you to review before reporting back to the client.

What About Job Security?
This isn't likely to be an issue. What AI brings to the value chain for insurers is the ability to free up your employees' time for tasks that aren't complex or sophisticated — tasks that can be automated and don't require human interaction. Relaying information through chat bots and analyzing data seems to be the trend on the use of AI for now, but it'll be interesting to see where this development leads and what it can do not only for the insurance industry but for the business world in its entirety.

Meanwhile, it's likely that artificial intelligence will only play a support role to insurers, relieving certain stressors by lightening the workload and increasing the speed and accuracy of data integration. It seems that AI will be utilized heavily as a tool for companies like AIG, whose new CEO plans to use it as their primary underwriting tool. AI will probably even make its way to Wall Street for banking transactions.

There's much AI can do to improve our lives at work and at home, but at the end of the day, nothing can truly replace the warm connection of the human relationship aspect when conducting business.

From Yelp to Yikes!

There's an uptick in the number of patients who Google health care providers' names for possible past practice issues. This becomes more probable when a patient has had a poor experience while receiving clinical services or dealing with administrative staff. What patients find on the Internet plus their personal experience with staff can be used in social media reviews that can ultimately affect how consumers choose their health care services. That's why it's more important than ever for health care providers to:

• Hire wisely
• Perform thorough background checks
• Research the providers' pasts
• Work to promptly address patient concerns

Keep your brand, reputation and income safe by listening to patients and hiring right.

What Is Business Interruption Insurance and Why Is It So Important?

Most businesses protect their assets with property insurance. They protect the buildings they rent or own, their contents and inventory. They look to protect themselves from a number of perils, including storms, vandalism, lightning and fire, to name a few. But what happens to the business when it needs to temporarily close while repairs are ongoing? Business interruption insurance – or business income coverage – could be the difference between survival and shutting down permanently.

What Is It?
Business income is a coverage designed to protect loss of income suffered by a business when it's forced to slow or suspend its operations due to a covered loss to its damaged property. This is important for a business while it recovers, as it continues to pay for lost earnings and ongoing expenses while it's down.

How Does It Work?
Business interruption coverage begins after the physical loss and ends when the business should have resumed operations with reasonable speed. Like a standard property policy that has a deductible, most time element policies have a similar provision called a waiting period. Instead of a dollar amount, it's a certain time period, such as 72 hours, after which the benefits are paid. Some points to consider would be if there was an interruption due to a utility interruption that occurred away from the company's premises. Also, what if there was damage to the property of a key supplier to the business? These situations could cause a business to suffer financially and should be included in a business income policy.

How Much Coverage Should Be Held?
It can be difficult to calculate the exact dollars lost by a company due to the suspense of operations, decreased productivity and the extra expenses it may incur to get back to business. The insurance carrier will analyze various financial statements for certain periods prior to the loss, so it's important that good records are kept. These could include profit & loss reports, tax forms and payroll records. Worksheets are available to help determine the proper amount of coverage to carry. These allow the business to look at past revenues and expenses to predict future estimates. The business should also think about:

• How long will it take to repair or rebuild the operations?
• Will there need to be a relocation?
• Is there additional time needed after re-opening to generate the same level of revenue as there was prior to the loss?
• Is there any equipment that requires a long time to replace?
• Are there any additional expenses that would be incurred to speed up the recovery?

The Bottom Line
Unfortunately, businesses don't know they're underinsured until it's too late. Business Interruption insurance could be the only reason that the company recovers fully or fails. To look at options for your business, please contact an NFP Property & Casualty agent.