Business Impacted by Small Portion of Fires, Yet Face 30% of Losses

infographic2

Data available from the United States Fire Administration (USFA) reveals some startling facts about where losses are more likely occur after a fire, as well as a few encouraging trends related to fires.

The positive side of this story relates to overall decreases in four key areas: number of fires, deaths, injuries and financial losses. Each category saw a remarkable decrease from 2005 to 2014, with the total number of fires dropping over 22% during that period. Deaths related to fires fell around 12%, while fire-related injuries dropped nearly 8%.

Somewhat predictably, monetary losses associated with fires were closely correlated with the number of fires. But although the dollar figure for fire losses dropped 21% between 2005 and 2014, there was a significant increase in 2007 and 2008, which consequently coincided with the housing market crash.

What can we infer from this? According to columnist Elliot Blair Smith with MarketWatch, falling property values are directly correlated with an increase in arson. Were property owners purposefully burning their own assets in a mass of insurance fraud? During that same period, USFA shows that property fires continued to decline. The data tells two opposing stories, but it is certainly plausible that those who did have fires reported significantly higher losses during that time.

Regardless of whether insurance fraud may or may not have happened during the housing crisis, it is clear that businesses and homeowners place significant value in property insurance. Business owners, in particular, face a huge portion of losses from fires: 29.9%, in fact, despite making up only 8.4% of all fires. For business owners, mitigation is usually meted out through commercial property insurance, with fire coverage a relatively standard named risk.

Interestingly, according to the USFA and FEMA, the number one cause for non-residential building fires is associated with cooking. This is likely due to the number of fires that occur at restaurants. Indeed, open flames are a leading cause of these fires, with the rather generic “Other Unintentional, Careless” title taking the number two slot. However, the second position does not mean that “Other Unintentional, Careless” is insignificant.

USFA research also shows that fires associated with “Other Unintentional, Careless” are on upward trend, with fine dollar losses spiking during the 2007-2008 housing crisis, as well as a noticeable spike in 2013. Most other fire causes also increased in fine dollar losses during the 2007-2008 period, including “Intentional” fires, “Heating” fires, and “Cooking” fires.

One of the larger reasons that commercial properties tend to absorb so many losses is due to businesses operating equipment consistently throughout the workday. As with any insurance purchase, a larger policy comes with increased costs. However, given the associated risks, particularly with fluctuating property values, it’s likely in most property owners’ best interest to purchase a recommended amount of insurance and have their property values regularly re-assessed.

$2 Billion in Insurance Claims Due to Severe Weather & Property Damage

15019639965-a0d68b36cd-o

The number and value of insurance claims increased in the first quarter of 2017 in significant part because of the numerous severe weather events that occurred in March throughout the U.S., some of which resulted in multiple casualties.

Aon’s catastrophe model development team, Impact Forecasting, has just released the Global Catastrophe Recap report. In the US, there were 6 major events that caused economic losses that exceeded $2 billion.

The month started with an outbreak of severe weather on March 6-10 that swept through the central parts of the US. Missouri, Iowa, and Minnesota among others, suffered the most significant tornado, wind and hail damage. The economic loss amounts at $1.7 billion but no human lives were lost. From this event alone, more than 200,000 insurance claims were filed.

A Week of WannaCry: the Impact of Ransomware & How Small Businesses Can Protect Themselves

Screen Shot 2017-05-18 at 3.48.27 PM

On May 12, cyber security professionals and many businesses around the world went into a frenzy. While both businesses and security professionals are familiar with—and currently working diligently to counter—the newest iterations of encrypting ransomware, a brand-new virus, WannaCry, created unprecedented shockwaves.

How WannaCry Spread Across the Globe

Like many other ransomware and other viruses in general, WannaCry infects system through spear phishing techniques. Typically this happens through infected emails that contain files hosting the virus. Once onto a system (Microsoft Windows only, in this case), WannaCry uses a system exploit to access and encrypt both local and networked files.

What made WannaCry unique, however, was just how quickly it spread. Between May 12 and May 15, WannaCry infected over 200,000 computers and systems, making it the fastest-spreading encrypting ransomware to date. Notably, WannaCry hit National Health Service computers in the UK, causing significant disruptions to healthcare providers in that country and, as of May 17th, had also infected hospital computer systems in the US. WannaCry has impacted computer systems in over 150 countries.

What brought attention to WannaCry in particular, outside of its fast spread and healthcare interruptions, is the particular exploit tools that it uses. Of the two tools used (DoubleStar and EternalBlue) a lot of attention focused on the EternalBlue exploit tool. This tool specifically was a stolen exploit tool developed by the National Security Agency (NSA). Given the EternalBlue tool was designed to exploit a vulnerability in Microsoft Windows, the company was quick to criticize and place blame for the effectivenewss of the WannaCry virus at the NSA’s feet.

In a blog post, Microsoft President and Chief Legal Officer Brad Smith wrote, “An equivalent scenario with conventional weapons would be the U.S. military having some of its Tomahawk missiles stolen. And this most recent attack represents a completely unintended but disconcerting link between the two most serious forms of cybersecurity threats in the world today – nation-state action and organized criminal action.”

As the WannaCry story continues to develop, some experts have pointed to a distinct possibility that North Korea is behind the attacks. According to the New York Times, evidence for this comes from the fact that the design of the virus is similar to attacks made against Sony Entertainment prior to the release of its controversial comedy film “The Interview,” which has as its main plot the assassination of North Korean leader Kim Jong-un. Cyber security company Symantec was able to source the Sony Entertainment attack back to North Korea, and the company has stated that its current investigations of an early WannaCry variant shows some similarities.

Low Effectiveness Given Reach and Potential

As effective as WannaCry has been at infecting computers, however, its actual success as ransomware has been less than stellar. To date, the ransomware has only managed to extract around $60,000 from victims in the several days since the attack launched. By comparison, one of the most successful ransomware viruses, Cryptolocker, infected fewer than 250,000 machines in roughly a year’s time from its release to eventual isolation, but managed to extract around $27 million in ransom payments.

Most encrypting ransomware now demand payment in Bitcoin, a secure digital payment method that allows cyber criminals to hide their tracks and avoid having their identity traced back via the payments.

WannaCry’s effectiveness was also significantly hampered by several flaws in its design. Shortly after its release, a 22-year-old cyber security professional and blogger discovered a kill switch written into the virus’s code. That kill switch checked to see whether a gibberish website existed online and, if not, proceeded with encryption. By registering the gibberish website, the original WannaCry variant was severely slowed. New variants arose with a different (quickly registered) kill switch, and without the kill switch.

What this particular issue with WannaCry reveals is just how far reaching and dangerous encrypting ransomware have become, and businesses are more commonly targets of these viruses. Although many companies that get infected choose to pay up, many others do not, resulting in lost data or expensive data recovery.

How Can Small Businesses Protect Themselves?

It’s increasingly important for businesses to learn how to protect themselves against this type of eventuality. One method is to ensure the company utilizes solid, effective data backup. Whether online cloud backup or on-site physical backup, such systems are often necessary to ensure continuance after an attack. Additionally, it’s important for businesses to have an effective incident response plan in place in case an attack occurs. Those plans should also be updated regularly to meet the changing needs and types of disasters that can happen.

Company security and IT professionals should also ensure systems are updated with the latest system patches and that effective malware prevention software is installed on company systems. In the case of WannaCry, the system exploit was patched over a month and a half before the WannaCry virus was released. The only systems that were impacted were those owned by companies and individuals who had failed to install the patch in a timely manner.

Finally, the issue of losing both client and proprietary data speaks volumes to the vast importance of cyber insurance. The monetary value of data only increases every year. The loss of such data due to a cyber attack can result in financial losses at best and, at worst, the complete loss of the business due to the high cost of the disaster. With encrypting ransomware like WannaCry growing more common and more sophisticated, every method a company can use to protect its data and finances should be considered.

Top 7 Industries with Most Occupational Injuries and Illnesses

infographic3

The U.S. Bureau of Labor Statistics recently recorded an incredible 2.9 million private industry workplace injuries and illnesses, as well as over 750,000 in the public sector. While these numbers (which exclude fatalities) mark a continued decrease in the overall number and rate of workplace injuries, there are also some particularly interesting findings within the data.

First, and perhaps one of the most surprising, is that individuals working for local governments are almost twice as likely to suffer a nonfatal workplace injury or illness than their private industry counterparts. Secondly, the vast majority of private sector cases were injuries (95.2%). Between public and private industries, however, certain types of jobs were far more likely to be the source of such incidents.

Majority (84%) Small Businesses Risk Errors, Opportunity for Automation

A good number of small businesses still maintain significantly offline operations. A new study from Wakefield Research and Concur shows that up to 84% of small businesses still use manual processes to run their daily tasks. This is relatively high considering that the world has greatly become digitalized. Today, automated systems are easily available, often at reasonable cost. It may be cool sending a handwritten note to appreciate faithful clients; but scribbling your invoice on a piece of paper could leave you vulnerable to errors.

Do you own a small business that functions relatively manually? It is probably time to consider upgrading to an automated system for simple processes. Manually running your business is not the worse idea on earth. However, it can add up to a lot of stress entering data into a log file or Excel spreadsheets. Also, you risk making errors that could be devastating to the business. And if stress and the vulnerability to errors are not reasons enough to make you consider upgrading your business, think of all the time and energy spent, it adds up.

CoverWallet Awarded “Best InsurTech Solution” at Benzinga Global Fintech Awards

bz_award_image

CoverWallet is excited to announce that we were awarded the title of “Best InsurTech Solution” at this year’s Benzinga Global Fintech Awards! Thank you again to our customers, supporters and all of you that believed in us as we continue to reinvent how small business insurance is dealt with.

Each year, the Benzinga Global Fintech Awards showcases the companies with the most innovative technology, who are paving the future in financial services and capital markets. The competition was steep, but CoverWallet’s insurance management platform put us ahead of the pack.

Amongst this year’s set of respected judges were:

  • Mazy Dar, CEO of OpenFin
  • Matt Hatch, Partner & Americas FinTech Leader at Ernst & Young
  • Conor Moran, Enterprise Business Development Director at Foursquare
  • Tricia Rothschild, Chief Product Officer at Morningstar
  • Ed Skolarus, Chief Digital Officer of Investor’s Business Daily
  • Vicki Walia, Head of Digital Investment Solutions at Alliance Bernstein
  • Alexander Wong, Managing Director & Head of Venture Capital, D. E. Shaw

Our co-founder and COO, Rashmi Melgiri, accepted the award on behalf of the company.

award

Since our launch in 2016, CoverWallet has been working to help small businesses across the nation to better understand, buy, and manage their insurance. Millions of small businesses in the U.S. face risks every day, and we at CoverWallet are proud to serve them through educational resources, simplified quoting, and our unique insurance management platform.

Check out CoverWallet and find the best insurance to protect your business. It just takes a few minutes to get a quote.

Unpredictability of Workers Compensation for Small Business Owners

 

workers compensation

Broadly speaking, companies are responsible for their employees’ wellbeing at the workplace and in any other locations where the employee carries out job-related tasks. Given this, many states have passed laws that make workers compensation mandatory. The purpose is to reduce litigation related to work accidents and protect employees by requiring companies take workers compensation.

While workers compensation is valuable in various ways, one must realize that it can put a strain on companies, especially those that operate in certain industries where work-related incidents are more frequent. Add on top of this the unpredictability of insurance costs in states like New York, and businesses can be burdened even further. This issue should not be overlooked as entrepreneurship is a major engine for the economy and it is therefore desirable to create the proper conditions for businesses to grow and prosper.

CoverWallet Launches Scholarship!

CoverWallet’s Small Business Scholarship is aimed at students in undergraduate or graduate programs, as well as those students who will be attending such programs in the coming year.

Students must submit a short essay highlighting their favorite local business and the risks they face. We want students to take an entrepreneurial mindset and consider the challenges of running a business.

To determine your eligibility and apply, click here.

Top 10 Workplace Injuries & How to Protect Your Business

Workplace Injuries

Thousands of employees are injured while working every year, ranging from minor injuries to severe or life-threatening ones. In a recent workplace safety index, it was determined that businesses spend in excess of a billion dollars every week on disabling workplace injuries. These direct costs include worker’s compensation increases, medical expenses, and loss of wages.

As a business owner, it is your responsibility to provide a safe work environment for those you employ. Educating yourself on the most common types of workplace injuries and ways to prevent them is the first step to making that responsibility a reality.

If a Small Business Employee Gets into an Accident, Who Has to Pay?

Car accident insurance

Business owners are generally not alright with having to pay the tickets their employees get when driving a company vehicle. Unless there is a written agreement in place, the business may have to pay the ticket if it was issued against the company’s vehicle. On the other hand, if a speeding ticket was issued against the driver, then the driver would generally have to pay it.

Who is liable for an accident?

If an accident occurs when an employee is driving a company car, it’s key from an insurance perspective to establish which party was liable. A core part of this is determining if the employee act within the scope of employment. In other words, did the employee get into an accident while taking care of business related issues or was he driving the car for his own personal use?