A few years back, we created our Insurance and Risk Management Checklist to outline steps companies should take to evaluate their insurance and risk management programs, and to plan for the year ahead. Now more than ever, it is vital for companies to stay on top of these critical functions. Last year saw a rise in weather-related and other natural disasters, such as devastating wildfires, and as climate change continues, we can only expect such events to occur with more frequency, and businesses need to be prepared. In addition, we see more news reports every day regarding cyberattacks – from hacking into corporate networks, political parties, and individual email accounts, to attempts to infiltrate and do harm to our nation’s power grid and internet-connected products, such as home appliances, automobiles, and even medical devices. We also have seen a greater increase in ransomware attacks. Thus, while there continue to be substantial risks around data breaches, other cyber risks loom even larger, and cyberattacks may lead to substantial business interruption, property damage, and even loss of life or severe bodily injuries. Of course, we also are in the midst of a global pandemic creating even greater risks to individuals and businesses, making insurance and risk management of greater importance. Companies, both public and private, also face a more aggressive plaintiffs’ bar looking for new areas of attack; we also might anticipate a more stringent regulatory environment from the federal government. A holistic approach to insurance and risk management is needed in these evolving and uncertain times. So, here is an updated Insurance and Risk Management Checklist for 2021:
1. Identify all significant risks
- What are your physical risks?
- Is your building more susceptible to fire or explosions?
- Does your building contain hazardous materials that could spill or leak?
- Have you taken measures to prevent the spread of disease in the workplace?
- If your building is out of commission for an extended period of time, how would that impact your business?
- Do you have added risks from employees working in offsite locations?
- What are your location risks?
- Is your business in or near a location that is susceptible to fire, storm damage, or natural disasters (i.e., floods, hurricanes, tornados, or earthquakes)?
- What are your personnel risks?
- Do your employees have access to products, information, or money that is susceptible to embezzlement, theft, or fraud?
- Do your employees drive company cars and/or utilize their own vehicles for company business?
- What are your technology risks?
- Would you be crippled by a power outage?
- Do you or your vendors store Personally Identifiable Information and/or medical information?
- Do third parties have access to your computer systems?
- Do your employees have mobile devices and/or remote access to your systems?
- Are you managing your data and network security risks in the new remote working environment?
2. Take inventory of all of your coverages
Do you have all the insurance you need to cover your significant risks? Are your coverage limits adequate to protect the business?
- General liability insurance
- Errors & omissions liability insurance
- Directors’ & officers’ liability insurance
- Employment practices liability insurance
- Employee benefits liability insurance
- Fiduciary liability insurance
- Cyberliability and data privacy insurance
- Property and business interruption insurance
- Fidelity & crime insurance
- Terrorism insurance
- Insurance for the spread of communicable disease
- Are you comfortable with your deductibles or self-insured retentions?
- Are all of your affiliates insured?
- Are your officers, directors, and employees adequately insured?
- Do you anticipate any upcoming purchases, sales, and/or mergers or acquisitions?
- Do emerging risks such as global climate change, pandemic diseases, terrorism, and data and systems security need to be addressed in your planning?
- Did your risks change as a result of the pandemic?