MARKETING MAGAZINE

Volume 2, Issue 5                                                                                                             May, 2001

www.rehabmarketing.org

This is the only e-zine devoted to marketing and sales professionals working in rehabilitation businesses. We hope to bring you informative articles & resources that will help you in your daily efforts.

* * * * * * Toe Path Industries manufactures Floor Maintenance Pads, Utility Pads and Hand Pads. We offer wholesale and government pricing. For information contact Gina Proctor at 1-800-995-5068 or e-mail gina@schoarc.com . * * * * * * *

Think your organization is immune from e-risk? Think again. If industry giants like Yahoo, eBay, and Amazon.com can be hacked, if government institutions like the Air Force and Navy can be cracked, if high-security installations like the Pentagon can be infiltrated 250,000 times a year, how can your company remain safe from cyberattacks? Employee misuse and hacker abuse of e-mail and Internet systems can trigger costly litigation and protracted e-nightmares few employers are prepared to handle. From dot.com companies to brick-and-mortar businesses using the Internet to dispense information or sell products, few organizations have implemented comprehensive e-risk management programs to limit exposures and reduce e-liability. Consequently, many employers can expect to spend millions recovering from e-disasters. Employee use of computer resources opens all organizations to electronic risks. The most common and costly e-risks: (1) business interruptions caused by hackers, cyberthieves, viruses, and saboteurs; (2) six-figure litigation costs and million-dollar settlements stemming from inappropriate e-mail and Internet use; (3) claims against products or services advertised on the Web; (4) Web-related copyright and trademark lawsuits; and (5) patent infringement claims with defense costs averaging $1 million and judgments costing hundreds of millions of dollars. While the extent of e-risks is no surprise, the fact that few employers have taken steps to manage electronic risks is shocking. A survey sponsored by Assurex International, the world's largest privately held commercial insurance brokerage group, shows ineffective and inadequate e-risk management is rampant. The problem is not confined to small businesses lacking the financial, technical, or human resources necessary to implement comprehensive e-risk management programs. Some of the nation's largest employers are the least prepared to handle e-risks. The Assurex E-Risk Survey, conducted for Assurex by the Human Resource Institute of Eckerd (FL) College, polled Fortune 500 companies and national associations about e-risk management practices. The survey demonstrates few employers are taking steps to mitigate losses following e-disasters. The e-insurance experts at Assurex note that employers who think they can protect their assets simply by installing anti-virus software (98 percent of survey respondents), firewalls (96 percent), and encryption programs (69 percent) are kidding themselves. Computer security is just one part of e-risk management. Effective e-risk management incorporates e-insurance to mitigate e-risks and reduce liability costs after e-disaster strikes. Employers can control e-risks by purchasing e-insurance policies to reduce first-party losses and limit third-party claims. However, few organizations have established a comprehensive e-insurance program as part of their overall e-risk management efforts. That's a serious oversight, given FBI statistics pegging computer losses at $10 billion a year, thanks to hackers and other cybercriminals. The Assurex E-Risk Survey reveals over 21 percent of large employers' systems have been hacked, with another 40 percent experiencing an increase in attacks over time. Approximately 15 percent of organizations have suffered hacker attacks resulting in business interruptions lasting two hours to two days. Nonetheless, few organizations have purchased e-insurance products to limit their exposure following a denial of service attack or other e-disaster. Business Interruption Insurance policies are held by under 24 percent of businesses. Only 18% have Crime Loss Insurance. Fewer than 6 percent have Crisis Communications Insurance to cover PR costs following e-disasters. Less than 2 percent have Extortion and Reward Insurance to limit cyberterrorism losses. Most alarming: fewer than 13 percent of employers have Unauthorized Access, Unauthorized Use Insurance. This coverage, notes Assurex, should be considered by any organization with an Internet presence. Another surprising finding involves e-mail. Over 27 percent of large companies--more than a quarter of the Fortune 500 companies surveyed by Asurex--have defended themselves against claims of sexual harassment resulting from inappropriate e-mail and/or Internet use. Any organization with a corporate e-mail system is at risk. All it takes is one inappropriate or off-color e-mail message to trigger a lawsuit. Employment Practices Liability Insurance, which protects employers from workers' claims of discrimination or wrongful termination based on race, sex, age, or disability, is a must for any employer who grants e-mail access to employees. As the Love Bug and Melissa viruses have demonstrated, a computer virus can interrupt business, drain revenues, and destroy credibility. Not surprisingly, over 98 percent of employers have installed anti-virus software. Fewer than 13 percent, however, have purchased Computer Virus Transmission Insurance. That leaves 87 percent of companies ill-prepared to recover from a devastating virus attack. Where anti-virus software and other preventive measures sometimes fail, Computer Virus Transmission Insurance succeeds. Regardless of how a bug enters your system, Computer Virus Transmission Insurance helps cover the cost to restore the system to good health. Overall, few employers are taking advantage of the protections offered by many e-insurance products. The Fortune 500 companies and associations surveyed report owning the following: Electronic Data Processing Insurance that extends beyond general business liability policies (14 percent); Specialized Network Security Insurance (17 percent); Media Liability Insurance (22 percent); Patent Infringement Insurance (27 percent); Computer Software and Services Errors & Omissions Insurance (31 percent); Product Liability Insurance (42 percent); and Director's and Officer's Insurance (53 percent). Assurex considers Director's & Officer's (D&O) coverage essential for publicly traded dot.com companies exposed to allegations of SEC violations. When lawsuits alleging fiscal irresponsibility, mismanagement, violations of security laws, or other wrongful acts occur, corporations, directors, and officers may be at risk. D&O Insurance protects both corporate assets and the personal assets of directors and officers. Assurex advises companies using the Internet to dispense professional advice or sell services or products to consider Computer Software and Services Errors & Omissions (E&O) Insurance. Most in need are firms whose professional advice, services, or products--if flawed--could cause financial loss to the consumer. No employer is immune from e-risk. You cannot be present in every office every hour of the day. You cannot rely on employees to exercise sound judgment 100 percent of the time. And you should not discount the damage hackers and saboteurs can cause. The best advice, according to the e-insurance experts at Assurex: Consult an insurance broker with e-risk management and cyberinsurance experience, then establish an insurance and computer security program to help reduce electronic exposures and lessen the likelihood of costly litigation. To help employers identify e-risks and assess e-insurance needs, Assurex offers the following comprehensive list of e-insurance products. Cyberinsurance Products Limit E-Commerce Exposures - Computer Virus Transmission Coverage: In spite of anti-virus software, computer viruses can enter your system. Computer virus transmission coverage protects against losses that occurs when, for example, an employee opens an infected attachment or downloads virus-laden software that crashes the system and erases files. - Extortion and Reward Coverage: Imagine receiving notice a hacker is planning to crash your server, shut down operations, and violate the privacy of employees and customers unless ransom is paid. Insurance is available to respond to Internet extortion demands and/or pay rewards to help capture saboteurs. - Unauthorized Access, Unauthorized Use Coverage: If a hacker gained access to your Web site and stole data or funds, this policy would cover you for failure to protect against third-party access to data and financial transactions. - Specialized Network Security Coverage: Internet transactions generate risks related to the handling of private information. Let's say you operate an on-line employee benefits program in which clients record salaries and benefits. If security were to be breached and clients were harmed when employees learned salary package details, you could be sued for failure to protect confidential information. Specialized network security coverage responds to that liability or any breach of network security and resulting losses. - Media Liability Coverage: Companies using the Internet as a sales and marketing tool are exposed to intellectual property risks, including copyright and trademark infringement. Media Liability insurance coverage protects against losses if you are sued for intellectual property infringement. - Patent Infringement Coverage: Patent claims are the most expensive liability claims, with defense costs averaging $1 million and judgments sometimes running in hundreds of millions. Premiums are expensive too, ranging from $20,000 to $200,000 or more, because the opportunity for infringement on the Net is so much greater than in the traditional business world. Patent insurance is available to cover defensive and offensive costs. Offensive coverage is particularly important for smaller dot.coms and e-commerce companies that may find themselves battling Internet giants over patent infringement issues. - Computer Software and Services Errors and Omissions Coverage: Companies using the Internet to dispense professional advice or sell services or products should consider Computer Software and Services Errors & Omissions (E&O) coverage. Most in need are firms whose professional advice, services, or products--if flawed--could cause a financial loss to the client. Traditional Insurance Products Help Limit E-Risks - Employment Practices Liability Insurance: Employment Practices Liability Insurance (EPLI)--which protects employers from workers' claims of discrimination or wrongful termination based on race, sex, age, or disability--is a must. If just one employee sends an off-color joke, racist remark, sexist comment, or pornographic photo via the organization's e-mail system, the company could face a legal battle with other employees who feel harassed or offended by the inappropriate message. EPLI also protects against third-party liability claims filed by outsiders offended by messages on the organization's e-mail or Web site. - Director's & Officer's Coverage: When lawsuits alleging wrongful acts (mismanagement, fiscal irresponsibility, or violations of security laws) occur, corporations, directors, and officers may be at risk. For public dot.coms exposed to allegations of SEC violations, Director's & Officer's (D&O) coverage is a must. Public and private dot.coms should consider D&O coverage to protect corporate assets and the personal assets of directors and officers. - Product Liability Insurance: If selling products over the Internet, purchase product liability insurance to cover your risk should the products you sell on-line cause a third party bodily injury or property damage. Typically included in an overall General Liability policy. - Business Interruption Coverage: If your computer system goes down and prevents you from conducting business and generating revenue, you will suffer a loss of dollars, credibility, productivity, and customers. Conventional business interruption insurance can help mitigate losses. - Crisis Communications Coverage: What would you do if hackers crashed your system and put you out of business for a period of time? If a key employee were arrested for soliciting sex with minors via the company's Internet system? With a crisis communications insurance policy in place, you would have funds available to hire PR pros to handle media relations. While crisis communications insurance is not for everyone, it may make sense for high-profile dot.coms and larger organizations with an Internet presence. - Crime Loss: On-line banks, payroll companies, and others who operate as repositories for financial assets can buy insurance to protect against the electronic theft of funds. - Electronic Data Processing (EDP) Coverage: EDP policies offers broader coverage for computer equipment damage than normally found in a general business property policy. EDP policies cover hardware and software replacement, as well as computer extra expenses to hire technical experts and others to work overtime to re-capture data. Assurex International is the world's largest privately held commercial insurance brokerage group. Assurex is owned by more than 65 of the largest independent insurance brokers in the United States and Canada. In addition, Assurex maintains affiliate relationships with Assurex Synergy Group Partners in more than 55 foreign countries. With local brokers in every major city of the world, Assurex is positioned to deliver seamless global insurance and risk management services wherever clients have assets at risk. Independent Assurex brokers employ more than 12,000 professionals on six continents and generate annual premiums in excess of $12 billion. Visit Assurex online at www.assurex.com. Courtesy of ARA Content, www.aracontent.com , e-mail: info@aracontent.com # # # EDITOR'S NOTE: Assurex President and e-insurance expert Thomas W. Harvey is available to discuss e-risks and e-insurance solutions. To schedule an interview, contact Nancy Flynn at 614/451-8701 or e-mail Nancy@ePolicyInstitute.com .

More detailed information is available on our web site - www.rehabmarketing.org

ARM Notes:

You might have noticed that our web site name has changed to www.rehabmarketing.org . We feel that this name reflects our new national emphasis. (Note: Your old www.nysarm.org link will still work).

Remember to submit job postings, equipment for sale, trade or to buy to the ARM web site for a free listing. E-mail them to info@nysarm.org.

The ARM web site is viewed by thousands of prospective customers for your products and services. Think about placing an ad on our site or in this publication. It’s only $200 per year plus a one time design charge. Send email to info@nysarm.org for the complete advertising price schedule. Also try to keep your listing on our site up to date.

Please feel free to join our on line discussion group. Some of the topics in our archives are "Forming a for-profit subsidiary"; "Models for Affirmative Businesses" and more. If you aren’t a member of the discussion group you can join by going to ARM’s website (www.nysarm.org ) & clicking on the appropriate link on our home page.

We all have contact with agencies who are not members of ARM. You are encouraged to ask these agencies to join our organization (and to join yourself– if you haven’t already done so). WE NEED YOUR SUPPORT.

This month we have decided to feature some member’s web sites.

www.arc-alameda.com - The ARC of Alameda County, Oakland, California

www.cviarc.com - Champlain Valley Industries, Plattsburgh, NY

www.oih.org - Ohio Industries for the Handicapped, Columbus, OH

www.arcotsego.org - The Otsego County ARC, Oneonta, New York

Check our web site out for more member’s sites.

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21^st Century Marketing Solutions provides the following services to rehabilitation businesses:

Contact Steve Susman for more information at (315)475-0815 or email: susman@21centurymarketing.com . Check out our web site at www.21centurymarketing.com

This e-zine is published once a month. I hope to have a mix of original content and outside content. If you would like to write an article for this e-zine please or have any comments or suggestions, contact or email Steve Susman at susman@21centurymarketing.com.