Crypto Crime: The Steps Insurance Companies Are Taking To Prevent Cryptocurrency Theft
Jacqueline Quintal is the current managing director and financial institutions practice leader at Aon. She works with financial institutions to address exposures as well as tailor risk transfer and consulting solutions in management and professional liability, cyber, property, casualty, environmental, lender placed insurance, health and benefits, due diligence, transactional solutions, operational risk, talent and compensation. In addition to working with traditional banks, insurance companies, asset managers, and other financial institutions, Quintal has a focus on emerging exposures for fintech firms. She is a frequent speaker at industry events and is the sole broker representative on the New York Department of Financial Services’ (DFS) State Insurance Advisory Board.
Christopher P. Skroupa: Briefly, what is blockchain? What is the impact of the disruptive technology, more specifically regarding its potential applications?
Jackie Quintal: Blockchain is, in its essence, a decentralized digital ledger on which transactions are recorded and verified, both chronologically and publicly. It’s tamper-proof and virtually instantaneous. The technology stores transaction data, for which no single, central party is responsible. For this reason, blockchain is a distributed ledger technology, or DLT. Benefits of this technology include increased transparency, faster transaction speed and improved efficiency. The technology is disruptive because of its potential to eliminate mass amounts of record keeping and to replace manual processes. Blockchain technology has a variety of use cases, both for financial transactions and in other industries including energy and utilities, healthcare, supply chain, transportation, and many more.
Skroupa: How does blockchain technology transfigure into cryptocurrency?
Quintal: Blockchain is the underlying technology that enables cryptocurrency, including its movement and exchange. Essentially, a cryptocurrency is a decentralized alternative to fiat currencies, which are backed by central banks. Cryptocurrency is a digital medium of exchange that uses technology to generate money and to secure and verify transactions.
Skroupa: Who are the key stakeholders in the cryptocurrency market?
Quintal: The cryptocurrency industry has several key stakeholders. This would include the exchanges upon which cryptocurrencies are traded, the miners who validate the transaction process, the custody companies who store cryptocurrencies for clients as well as institutions and the general public who conduct cryptocurrency transactions daily. Further, some central banks in emerging or unstable economies consider cryptocurrency as a viable alternative to or supplement for volatile currencies.
Skroupa: Why is it necessary to insure cryptocurrencies?
Quintal: Corporate insurance, of physical and intangible assets, along with protecting companies and their Board of Directors from regulatory exposures and shareholder litigation, has become a best practice across global industry. Insurance, deployed and structured correctly, serves as balance sheet protection and an efficient risk transfer. That said, there have been a considerable number of well publicized thefts of cryptocurrencies. As hackers become increasingly sophisticated, both in the established world of financial services and in a crypto context, it is valuable for firms to understand vulnerabilities, risk control and insurance solutions.
Skroupa: How can insurance companies underwrite the risk of theft of these assets?
Quintal: Insurance markets are starting to embrace the opportunity to insure cryptocurrency related exposures. This includes insuring theft of assets, offering protection to companies and their Boards of Directors, as well as addressing a variety of other business issues ranging from business interruption to errors and omissions, technology service obligations, and contractual issues.
Aon has been working with insurers to develop and refine innovative, risk transfer solutions for companies that transact in, hold or own cryptocurrencies with a focus on increasing the amount of available capacity and creating price competition. Important risk factors that underwriters will study include management team experience and expertise, security and storage protocols, financial crime concerns (e.g. Anti-Money Laundering and Know Your Client), relationships with legal counsel, accountants and banking partners as well as regulatory strategy.
Skroupa: What is the current outlook on cryptocurrency-related crime?
Quintal: There are no indications that cryptocurrency related crimes are abating; however, this is not materially different from fiat-related crime. It has been reported that in the first half of 2018, cryptocurrency exchange thefts (totaling $1.1 billion worth of stolen crypto) have tripled the amount of crypto thefts reported in 2017. Given this development, it is imperative that companies develop robust and state of the art security measures to protect their assets. It is just as important to insure against unforeseen disruptions and thefts.
Three Questions Professionals Should Ask About Professional Liability Insurance
In any industry, there are a variety of liabilities that a business can face. Among the different kinds of insurance plans that professionals can make use of, they might overlook professional liability insurance.
Many businesses make the assumption that their general liability insurance has them covered. However, general liability insurance can have a lot of gray areas and limitations in coverage. Business owners may need professional liability insurance when a customer files a lawsuit for a fault in quality of services rendered. In this instance, this insurance could help a business shoulder the hefty costs of their defense and the damages that are awarded in the event of a successful civil lawsuit. The following three questions are important for professionals to ask when considering professional liability insurance.
When Do You Need Professional Liability Insurance?
As a managing partner of an insurance firm that works with professional liability insurance, I believe that if you’re on the fence about this insurance plan, it is vital to understand how these plans could help your business in times of trouble. Because human error is possible, professional liability insurance can give a business a bit more breathing room in cases where errors could negatively impact it as a whole.
Professionals typically consider this nsurance when there is a risk associated with their line of work. These risks increase the possibility of errors or faults in products and services and can result in financial losses or other harm by the business (the policyholder) to the injured party (the consumer). Recovering from a lawsuit that can take a toll on a business, and a professional liability insurance plan could soften the blow of various expenses.
Who Can Make Use Of Professional Liability Insurance?
Business owners and professionals who have a lot of interaction with their target market on a one-on-one level are often those who invest in this type of policy. It allows them to offer services on an “advice and recommendation” basis that includes the following different professions:
• Business professionals: Executive, management, marketing, education or even training consultants.
• IT professionals: Programmers, developers, contractors and IT consultants.
• Engineering contractors and technicians: Project engineers, CAD designers, gas and oil engineers and offshore rigs personnel.
• Job placement professionals: Recruitment consultants and agencies.
• Designers:Interior designers, graphic designers, web designers and others.
• Fitness professionals: Dance teachers, personal trainers, yoga teachers and other individuals.
• Tutors and teachers: Largely private tutors.
Based on my experience as an insurance professional, I recommend that anyone who could benefit from this insurance assess the risks their organization faces on a day-to-day basis while working with consumers, and consider if this insurance could prove to be an asset.
What Challenges Can Professional Liability Insurance Present?
Professional liability insurance plans are obligatory requirements for businesses to have in some states. Signing up for a policy is a simple process, but you will have to look for an insurance plan provider that offers one that is suited to your business. Moreover, you will want to carefully study the plan you are considering as the coverage can vary and may have some limitations.
One example of these limitations is that coverage doesn’t typically include criminal prosecution. Limitations of civil lawsuits are usually stated in the policy agreement, and can also make a marked difference in the amount of coverage offered.
Finally, there might be some confusion in finding professional liability insurance in your industry as it can go under a different name depending on your industry and specific role. While professional liability insurance is available for almost every industry, it might have a different name. For example, a professional liability insurance plan is also known as errors and omissions insurance (EOI). In the medical community, it is known as medical malpractice insurance, and in some other industries, it is also known as professional indemnity insurance (PII). While the circumstances vary greatly from one business type to another, these plans could help to ensure that any unfortunate setback doesn’t stunt the growth of your business.
The Best And Worst Travel Insurance Companies
Ask any expert to name the best and worst travel insurance companies, and you'll probably get a noncommittal answer. "It depends," they'll say, careful not to sound like they have a favorite -- or a least favorite.
But ask Michael Blank, and he'll tell you about his experience with Seven Corners Travel Insurance.
Blank recently set sail on a Celebrity cruise to the Middle East, India, and Southeast Asia. Along the way, both he and his wife contracted severe sinus infections, which sent them to the ship's infirmary. A doctor treated the couple with antibiotics and billed them $313. Blank completed a quick online claim form.
"Seven Corners paid right away," says Blank, a pharmaceutical research and development executive in Philadelphia.
Actually, that's the way it's supposed to work. The best travel insurance policies for your upcoming fall and winter trips offer extensive coverage. They also pay their claims promptly, according to customers, travel agents and experts. And the worst? Don't even get me started.
These are the worst travel insurance companies
OK, do get me started.
The absolute worst travel insurance companies aren't travel insurance companies at all. A few years ago, readers of my consumer advocacy site asked for help with their claims against a company selling something called travel "protection." The company billed itself as travel insurance without actually claiming to be insurance in a clumsy attempt to evade state regulators. It refused to honor what appeared to be legitimate claims.
In the end, one of the companys stakeholders tried to drag me into to court for writing about it. Fortunately, authorities caught up with the scam and shut it down.
Case dismissed.
By the way, if you want to read travel insurance horror stories, you can find plenty of them on my nonprofit consumer advocacy site.
Some travel companies, such as tour operators and cruise lines, also offer "protection" that isn't insurance. Coverage is limited (for example, they only offer credit if you have to cancel, not a refund). And the restrictions are significant. Since the company itself underwrites the "protection," the company's bankruptcy would render it useless.
Note: Some travel protection products are totally legit insurance products and worth considering. For example, BHTP's ExactCare Extra product combines fixed benefits with traditional coverage. It covers trip cancellation, trip interruption, medical coverage, emergency evacuation, but also flight cancellations and missed connections.
But in a sense, the worst travel insurance may be none at all. Too many travelers are turned off by the negative stories and bogus "protection" policies and decide to skip travel insurance altogether. It's a decision they often regret when they have to cancel their trips and can recover none of their money.
Good travel insurance can cover you when medical insurance won't, particularly for international travelers. It protects against trip delays, offers rental car coverage, and covers lost luggage and accidental death. Finding a great travel insurance plan and buying travel insurance doesn't have to be difficult.
The best travel insurance companies
Every year, I survey my readers on the best travel insurance companies. Here are last year's winners. (I'll start the polling again in October, so stay tuned.) But in the meantime, I hear from thousands of travelers about their insurance experiences. Not all of them are positive, but many are. They merit a second look at about the halfway point through this year.
Here's my current list of the best major travel insurance companies, based on reader feedback and the latest consumer surveys:
Allianz Global Assistance
Allianz Global Assistance is the largest travel insurance company. It's owned by Allianz SE, the world’s largest diversified insurance company. Thanks to the scale of its parent company, Allianz can offer better insurance at a lower rate. The company typically works fast on claims and resolves most complaints quickly and to the customer's satisfaction. Just in case it doesn't, I publish the names of its customer service executives on my advocacy site.
Jim Angleton, who runs a credit card company in Miami, remembers a recent flight from the Middle East to Miami. With a hurricane bearing down on South Florida, his airline canceled the flight and told him to wait four days. "We ran and got the last four business class tickets on Emirates," he says. Allianz quickly reimbursed him for the tickets.
"In today’s crazy travel world and climate it is very important -- almost a must -- to have trip insurance," he says.
Amex Assurance
Talk about squeaky clean. I've received virtually no complaints about Amex Assurance products, which in and of itself is a powerful endorsement. Amex offers all kinds of protection and insurance policies, and you don't have to be a cardmember to qualify for coverage. If you run into problems, I always publish the Amex executive contacts on my advocacy site, too.
Generali Global Assistance
Generali Global Assistance's predecessor, CSA Travel Protection, has long been a recognized name in travel insurance. And Generali's parent company, The Europ Assistance (EA) Group, has been around since 1963. Generali says its success is "built on the foundation of trust." Based on the few cases we receive on my consumer advocacy site, they live up to their promises. I've had an opportunity to work with Generali on several stories since I published my last list. It has a true customer-centric corporate culture, which is great. (And just in case they forget, here are Generali's executive contacts.)
Seven Corners
Seven Corners is privately held and headquartered in Carmel, Ind. Blank's experience, as described earlier in the story, is not unique. This low-key specialty benefit management company specializes in doing business with agencies of the U.S. government, foreign governments, and corporations. Their cases tend to get resolved quickly and with a minimum of publicity. Here are the Seven Corners executive contacts, in the unlikely case you're the exception to the rule.
Travelex
Travelex is owned by Cover-More Group, one of Australia’s largest insurance providers. I can count on one hand the number of Travelex cases we get. The company offers solid coverage and processes claims quickly. A vast majority of its customers are pleased with their travel insurance policies, which is as much as anyone could expect. Here are the Travelex executive contacts.
Christine Dailey, who works for a construction company in Los Altos, Calif., reported her positive experience with Travelex. She'd purchased coverage for a three-week European cruise.
"I had a fall on Portuguese cobblestones during a shore excursion and fractured a finger," she says. "Incurred $910 in medical treatment by the ship’s doctor."
At home, her health insurance covered her medical care. But not abroad. Travelex didn't harass her with a lot of paperwork requirements for her claim. "I received payment in full within three weeks," she says.
Travel Guard
If you've never heard of Travel Guard, you probably know AIG, its parent company. Like the other insurance companies on this list, it has a sterling reputation for delivering insurance coverage to travelers. I've had several dealings with Travel Guard since I published my last list of insurance companies. Travel Guard processed its claims quickly and followed up to make sure the customer was happy. I'm impressed by their professional attitude and have absolutely no reservations about recommending a Travel Guard policy. Here are the Travel Guard executive contacts.
Travel insurance doesn't solve everything
A few words of warning: While these are the best travel insurance companies, they're not perfect. Too often, they oversell their products with large-print hyperbole, only to have fine-print restrictions that severely limit their coverage. The biggest: limits on pre-existing conditions. That's a problem mostly created by their underwriters, who are trying to limit their exposure. You have to read the fine print very carefully to avoid getting stuck with a useless policy.
Also, there are items even the best travel insurance company won't cover. That's one reason many of the travelers who contact me buy more than insurance. For instance, they'll pay $270 for a one-year medical evacuation membership like MedjetAssist. Medjet has access to a fleet of more than 250 private air ambulances that can evacuate hospitalized members. Or they'll sign up for International SOS, which provides global security to companies.