New risks in the virtual world

April 12, 2022

During the first few months of the pandemic, the phrase the new normal was everywhere and it was meant to describe what things would be like going forward. It was meant to describe what we have always done, but would be done differently than it had in the past.

For the insurance industry, that means that we have left the pro-rata wheels, legal pads, calculators and five-drawer file cabinets in the past and have moved forward with comparative raters, e-signatures, scanners and cloud-based client management systems. While the who we serve has stayed the same, the how has changed forever.

A duty to protect

One of the most sacred trusts we have as independent insurance agents is the personal information our current and prospective clients share with us. Gone are the days when we primarily—and almost exclusively—communicated through Yellow Page ads, billboards, banners in the Little League outfield and flyers handed out in neighborhoods.

Today’s data is exchanged in bits and bytes via email, texts and tablets and then stored electronically where the chance for it to be accessed by unauthorized individuals is at an ever-increasing risk. With post-pandemic processes in place for staff working at home or in hybrid positions, the days of safely storing pieces of paper that contain sensitive client information away in locked file cabinets is a quaint memory.

New processes can prevent E&O claims

While all of this may have you thinking, “It’s like a typical errors-and-omissions class, I never want to write business for another client,” the reality is that the ways that we collect, store and discard sensitive information needs to change with the times and tools available.

Agency staff needs to have an awareness of emails that may contain malware or weigh the dangers versus convenience of accessing public Wi-Fi when inputting sensitive client data into management systems or comparative raters. Processes and procedures should be developed for updating information on our websites or for deciding exactly who should be writing or responding to posts on our social-media accounts. Having an awareness of these possible pitfalls—and then creating standards and procedures to mitigate and minimize occurrences—will assist your agency in avoiding associated E&O risks.

Setting a good example

The way that agents protect their clients’ data is an important example to be set for why our clients should protect their clients’ information with cyber liability and data breach protection.

With so much of business being conducted electronically and containing personal, credit and health information, insurers’ need to protect their clients’ data has never been more important. As insurance agents, we need to ensure that our clients understand what is at risk and review the key insuring agreements and deductibles to determine what their risk appetite is.

You can learn more

National elections. Autonomous vehicles. Home-security systems. Online shopping. Video conferences and online school classes. With so many of our everyday actions taking place in the digital world, cyberliability has taken on an even greater importance in the world of insurance. What is the risk to your personal and commercial insurance clients when it comes to having their digital identity and information compromised and what can be done to protect them? To learn more, attend Cyber Liability & Data Breach: Don’t Be Compromised!, taught by John Fear, CPIA, CISR, at PIA’s Long Island Regional Awareness Program in Woodbury.

And, you can learn more about identifying cyberrisks and implementing new procedures to protect sensitive information and to avoid E&O claims when you attend Errors & Omissions—Real Risks in a Virtual World, taught by Fear, at PIA’s Long Island Regional Awareness Program in Woodbury. This course will look at the increasing risk to individuals and businesses and what can be done to raise awareness to the need and develop a risk assessment plan to protect them.

This continuing-education courses have been approved for NYCE credits. For more information or to register for the event, see PIA’s Long Island RAP event page.

About the author…

John Fear

John Fear, CPIA, CISR, has worked in the insurance industry for over 30 years and has conducted hundreds of workshops and sales training sessions. Those experiences have given him the knowledge and insight into real-life solutions that improve sales and maximize operational efficiencies for agencies.

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