|As an fyi, NAPEO has formed a Cybersecurity Task Force to better understand the exposures of PEO and how to mitigate them. A very timely and critical task force that I am very proud to be a part of – This is by far the most misunderstood exposure to PEO today. |
“NAPEO recognizes the critical business and compliance risks faced by our members concerning cybersecurity. Although many member resources such as PEO Insider and various conferences have featured helpful information and programs for members on this topic, NAPEO recognized more is needed and formed the NAPEO Cybersecurity Task Force to help fill that gap. The Cybersecurity Task Force is comprised of a cross section of professionals with expertise in insurance, law, technology and the business environment of PEOs. Its primary mission is develop a set of best practices which NAPEO members could use to strengthen their compliance efforts and minimize their legal and business risks. The Task Force’s first step will be to survey members to gain a deeper insight into the cybersecurity concerns and exposures of members, which will be used to help shape the best practices the task force will produce. For more information, please contact Farrah Fielder.”
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