Will master Cyber policies be the next EPLI product for PEOs?

With two carriers now offering master PEO cyber programs, the question here is PEO’s be able to sell these as part of their overall package?

A recent 2017 RIMS survey has shown that 83 percent of organizations have a standalone cyber insurance policy (up 3 percent from 2016) and only 14 percent are utilizing the cyber coverage offered in their other insurance policies.

One reason for this statistic could be that Risk Managers want specific endorsements and add-on coverages that apply directly to their industry or are a result of a problem they’ve faced in the past.  This has been a crucial part of individual cyber policies over the past few years as the carriers try to keep up with the quickly evolving cyber space.

With the above in mind, it may be difficult for PEO’s to make this as part of their basic package as EPLI has become over the past decade.

I would like to note the PEO cyber program has one crucial endorsement, Social Engineering, that can be added on for an individual client company.  This has to be individually underwritten for each client company adding another layer for the PEO sales rep to cross-sell.

If you work in the PEO industry, please comment below with your thoughts of PEO’s offering cyber coverage to client companies. For more statistics from the RIMS survey please visit: http://www.insurancejournal.com/news/national/2017/08/25/462357.htm


-David Campbell

Risk Consultant at Libertate Insurance

Does your EPLI policy cover against employee harassment to a Third Party?

Most employers understand their Employment Practices Liability Insurance policy to cover against employee to employee or employer to employee harassment and discrimination.  But many of these employers could be liable for claims that they do not have coverage for under their current EPLI policy without the proper endorsements.  The most reoccurring of these claims have been third party claims against the behavior of your employee to the third party.  The language in a Lexington policy of an event resulting in a claim is: “allegation(s) of intentional or unintentional Discrimination, Harassment or any civil rights violations committed by an Insured and brought by a Third Party, whether such event against the Third Party occurs directly or through the Virtual Environment.”.  Their terminology for this coverage is Wrongful Business Environment.

So, we have coverage for your employee harassing or discriminating against a third party.  But what happens when the scenario is flipped and a third party discriminates or harasses your employee?  The employee would go to the employer or manager, and one of two things will happen: The employer will address the issue or the employer will ignore the issue.  In the first scenario, the employer and employee can work together on behalf of the employee to file a claim against third party’s employer.  Let’s hope they have third party coverage on their EPLI policy.  In the second scenario, where an employer fails to do anything, the employee can file a claim against the employer.  This would actually be looked at as a “hostile work environment claim” (your typical EPLI claim) and would be covered.  In this scenario, as well, the employee would also be able to go after the third party’s employer as well.


For more examples and details on this coverage, please visit: : http://www.propertycasualty360.com/2006/11/01/third-party-coverage-can-be-an-important-part-of-epli-policies

“Suppose a document messenger makes daily stops at a real-estate agency, where he greets the receptionist. After a number of visits, the messenger begins making suggestive sexual remarks. The receptionist complains to the owner of the business, who does nothing other than advise the receptionist to just tell the messenger to stop bothering her.

One day the messenger appears and makes suggestive remarks to the receptionist and even touches her inappropriately. Visibly shaken, the receptionist complains again to her boss, who takes no action. Not being able to endure the continuing harassment, the receptionist quits and sues her boss for emotional distress and failing to prevent an assault.

This is a clear example of an employer tolerating a hostile work environment, a typical EPL claim. The mere inaction of the employer makes him responsible. This also could be pursued as a third-party claim against the messenger’s employer.”


If you have any questions regarding your EPLI policy or would like a free audit of your current policy and coverage, feel free to reach out to David Campbell at dcampbell@libertateins.com or 407-613-5483.

The 72’nd Annual Workers’ Compensation Educational Conference – Orlando

Another year and another convergence of the who’s who in the field of workers’ compensation at the Marriott World Center in Orlando this week.  Known as the largest insurance conference in the country, the Workers’ Compensation Institute brings together “centers of influence” in law, medicine, claims adjusting, underwriting, brokerage, risk-bearing, managed care, regulation, legislation, staffing and of course coemployment.

Dating back over a decade, the Workers’ Compensation Institute and specifically Jim McConnaughhay and Steve Rissman have granted the PEO community a one day educational track.  Shortly thereafter, FAPEO and NAPEO threw their influence and sponsorship behind it.  Special thanks to the WCI, FAPEO and NAPEO for making this a success and bringing positive exposure to the PEO industry.

I am proud to participate on a panel Tuesday morning at 9:00 am with Andy Olwert (Next Level), Deb Hetzer (PEMCO), Phil Herron (Continuum HR) and Robert Barrett (Rissman, Barrett, Hurt, Donahue, McLain & Manganese’s, PA) titled “Accountability in the PEO Industry – Posting Wins for PEO’s and Their Claims Teams”.  More information on this data-driven session can be found on the WCI 360 site here:


Hope to see you Thursday morning and look forward to catching up with lots of old friends!

Insurance Nerd Day 2017!

…was yesterday and we did not celebrate it here on the Compass where we take that title as a compliment!

July 18 is Insurance Nerd Day

25% of insurance professionals will reach retirement age by 2018 and only 5% of college graduates are very interested in pursuing a career in the insurance industry.  That will create huge opportunity for newly-minted insurance nerds of all ages in the near future.  Data management and predictive modeling are going to make this industry far sexier in the years to come…


FBI: Cybercrime Losses Reached $1.33B in 2016, a 24 Percent Rise

Unfortunately, cybercrime isn’t going anywhere anytime soon.  Below is a brief update from the FBI on the topic.

FBI: Cybercrime Losses Reached $1.33B in 2016, a 24 Percent Rise

June 22, 2017 by Laharee Chatterjee

Losses from cyber crimes rose 24 percent in 2016 to over $1.33 billion, according to a report by the Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3).

The center, which was set up in 2000 to receive complaints of internet crime, received 300,000 complaints during the year from hacking victims.

Businesses lost $360 million to cyber criminals, who tricked them into wiring money using fraudulent emails that appeared to be from corporate executives and suppliers, according to the report released on Wednesday.

IC3 said it received 2,673 complaints last year from victims of ransomware, with losses totaling over $2.4 million.

In May, the WannaCry ransomware attack infected 300,000 computers in more than 150 countries, disrupting factories, hospitals, shops and schools.

Ransomware is a form of malware that encrypts data on infected machines, then typically asks users to pay ransoms in hard-to-trace digital currencies to get an electronic key so they can retrieve their data.


Cyber Insurance is quite possibly one of the most discussed and equally misunderstood concepts over the past several years.  If you own a business, you must ensure you are protected from cybercrime. Libertate Insurance has access to several markets one of which is a new PEO Cyber Master program.  Contact us today for more information.

Sharlie Reynolds, 305.495.5173 / sreynolds@libertateins.com

Engage PEO Hits INC 500/5000

It is with great pride that I announce that our friends at Engage have hit the INC 500/5000 for 2016!  Hitting the 5000 is a big enough deal but in the top 500 growth companies in the United States is a very special accomplishment.  Congratulations Jay, Midge and the rest of the Engage team!

“Inc. ranked Engage as the 127th fastest-growing private company in the country. The report notes that Engage’s three-year revenue growth exceeded 2,700 percent. Engage ranked as the fastest growing professional employment organization, second among all human resource companies, and 12th of all companies in Florida.”

Having started operations less then five years ago, Engage has grown its coemployee base to almost 25,000 employees at present.  With a focus on healthcare and human resources, the firm’s average client size is arguably almost triple the industry norm at over 60 employees.  With recent hirings of industry stalwarts Steve Scott and Craig Hill, it is my opinion that this is just the opening chapter for Engage.

Congratulations !



The American International Group (“AIG”) Decision

Bar none, there has been no more innovative and successful organization in the property and casualty insurance realm then AIG.  The following headline today:

AIG Chairman Defends Keeping Both Life and P/C Insurance Units – Insurancejournal.com

…amazes me to even be in consideration.  AIG did not just distribute the most product, they created the most.  Their entities provide the largest amount of “excess and surplus” (aka non-admitted) capacity then any other insurer times three in the country.

Not a life guy, so admittedly come from a position of not understanding how anyone with a right mind would ever consider selling the crown jewel of AIG – their property and casualty insurance portfolio.  It seems “investor activists” such as Carl Icahn have a different take:

“Icahn Renews Attack on AIG CEO Hancock; Insists ‘Drastic Shift’ Needed”


Icahn Renews Attack on AIG CEO Hancock; Insists ‘Drastic Shift’ Needed

Activist investor Carl Icahn has again called for American International Group (AIG)  to be divided into three separate companies and expressed doubt that AIG CEO Peter Hancock’splanned strategy presentation next week will satisfy his demand.

He said that if Hancock “fails to present a drastic strategic shift and instead is limited to only incremental changes such as small-scale asset sales and incremental cost cutting” then what “little credibility management now has will be lost.”

Icahn says the split would let AIG to “shrink below the threshold for systemically important financial institutions” (SIFI) and avoid SIFI-related regulatory restrictions.

“[I]t is abundantly clear to me there is only one sensible path for AIG to follow: become a smaller, simpler company with a path to de-SIFI,” he said in a letter on his website. – Carl Icahn

So the greatest insurer in the past century has to disband its units because the federal government has given it the equivalent of the “franchise tag” in the NFL.  Really man?

Let’s look at their numbers…

AIG Consolidated Operating Financial Highlights ($ in Millions, Except per Share Amounts) 1Q15 1Q16 Inc. / (Dec.)

Operating revenues $14,590 $12,737 (13%)

Pre-tax operating income (loss):

Commercial Insurance: Property Casualty 1,170 720 (38%)

Mortgage Guaranty 145 163 12%

Institutional Markets 147 6 (96%)

Total Commercial Insurance 1,462 889 (39%) “…the p and c side”

Consumer Insurance: Retirement 800 461 (42%)

Life 171 105 (39%) Personal Insurance (26)

222 N/M Total Consumer Insurance 945 788 (17%) “…the life side”

Total Insurance Operations 2,407 1,677 (30%)

and today’s article out of the journal.,,,

Breaking up AIG is a huge mistake as well as continuing to drill the current CEO.  How does one run a company when he is is constantly under seige… They have already lost many top execs recently such as John Doyle (Marsh) and Russell Johnston (QBE) whom I amagine had to be frustrated with more time spent defending the company versus advancing it.  These two Industry stalwarts, with the help of course of their colleagues, allowed AIG the second chance in this writer’s opinion and to see them leave and press like this is saddening.  Let’s hope Icahn gets bought out…


By Sonali Basak and Emma Orr( | May 12, 2016 

American International Group Inc., which is shrinking under pressure from activist investors, is committed to retaining operations in both life insurance and property/casualty coverage, Chairman Doug Steenland said.

“We remain of the view that that is the right long-term position for AIG,” Steenland said Wednesday at the company’s annual meeting in New York. “Although, the specific components of what’s in each of those businesses may change.”

Billionaire Carl Icahn said last year that AIG is too big and should split into separate companies. Chief Executive Officer Peter Hancock instead is selling smaller units as part of a plan to free up $25 billion in capital to be returned to shareholders over two years. That has helped ease tension with activists including John Paulson, who was elected to the insurer’s board Wednesday along with a representative of Icahn’s firm.

Hancock reached a deal in January to sell a broker-dealer operation, and AIG’s mortgage insurance unit filed in March for an initial public offering. The CEO has also been cutting jobs.

“This is hard and sometimes painful work,” he said at the meeting. “We have much left to accomplish.”

AIG advanced 14 cents to $56.49 at 12:15 p.m. in New York. That compares with the closing price of $60.92 on Oct. 27, the day before Icahn disclosed a stake in the insurer and publicly called on Hancock to break up the company.

The Compass Brings You “The Cybersecurity Report”

The PEO Compass has developed a column that will be devoted to cyber security and cyber threats due to the ongoing development of threats and problems that can potentially effect all of us in our day-to-day lives, both in business and personally.

The Cybersecurty Report will cover varying topics that are both informative and current as to our current climate and the potential threats that can impact us from a time, financial, and credibility standpoint.

From cyber crime to data breaches, the ever evolving world of and never ending tenacity of cyber criminals expands and the effects can be catastrophic.

It is for this reason that we have established a strategic partnership and launched a cyber security platform called RiskMD Cyber.  The platform will encompass various risk mitigation and management techniques ranging from audit of current internal structure and security to insurance that will aid in the event of a breach or loss.

Our partner in this venture and the key contributor to the report is Stackframe.

Stackframe was founded in 2004 to leverage experience in building and maintaining sophisticated high-fidelity distributed simulation systems into other domains. Quickly gaining clientele in various diverse industries, StackFrame has matured into an organization capable of solving challenging technical problems in the areas of software development and information technology services management and was recently recognized as one of the 101 companies to watch in Florida.

StackFrame’s company culture has attracted a talented, impactful staff that thrive tackling the problems faced by modern businesses and organizations as they grow more connected to the ecosystem of services and technologies served over the Internet.

Currently employing 26 people and headquartered in Seminole County, Florida, StackFrame is well poised to assist organization of all sizes and continue growing in size and capability.

To learn more please visit http://www.stackframe.com/