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HomeMy WebLinkAbout062617_ca10Consent Agenda Commissioners Office JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Philip Morley, County Administrator FROM: Leslie Locke, Executive Assistant DATE: June 26, 2017 SUBJECT: AGREEMENT re: Insurance Binder for Crime Coverage; $14,943; Jefferson County Administrator; Travelers Casualty, Arthur J. Gallagher & Co. STATEMENT OF ISSUE: County Administrator, Philip Morley is requesting Board approval and authorization for the County Administrator to sign the binder as Risk Manager, on behalf of the County. ANALYSIS: The County's current crime policy will expire on June 30, 2017 and Arthur J. Gallagher has submitted a new three (3) year proposal with Travelers Casualty to cover crime coverage that also includes terrorism coverage. FISCAL IMPACT: $14,943 for three years, ending June 30, 2020. RECOMMENDATION: Staff recommends that the County Commissioners move to approve the insurance binder for Crime Coverage, and authorize the County Administrator to execute the three (3) year policy on the County's behalf. REVIEWED Philip Morley, County nistrator Date a� Arthur J, Elizabeth Miser Producer Arthur J. Gallagher Risk K 1501 Market Street Suite Tacoma, WA 98402 elizabeth_miser@ajg.com www.ajg.com © 2017 Arthur J. Gallagher & Co. Jefferson County Table of Contents Our Team and Commitment Service Team & Commitment Your Program Named Insured ...................... Marketplace Review ............... Changes / Developments....... Premium Summary ................ PaymentPlans..................................................................... Program Details................................................................... Crime - Travelers Casualty and Surety Co of America. Proposal Disclosures Proposal Disclosures........................................................... Insurance Company Ratings and Admitted Status .............. Client Signature Requirements Client Authorization to Bind Coverage ................................. Appendix Cyber Liability eRiskHub Features ....................................... Claims Reporting By Policy .................................................. Bindable Quotations & Compensation Disclosure Schedule Attachments Social Engineering Market Sheet 4 ..6 ..7 ..8 ..9 10 11 11 14 16 19 .21 .22 .23 2 Jefferson County Jefferson County Service Team Elizabeth Miser has primary service responsibility for your company. We operate using a team approach. Your Service Team consists of: Arthur J. Gallagher Risk Management Services, Inc. Main Office Phone Number: (253) 627-7183 Jefferson County Jefferson County Named Insured Crime Jefferson County Note: Any entity not named in this proposal may not be an insured entity. This may include partnerships and joint ventures. Jefferson County Marketplace Review We approached the following carriers in an effort to provide the most comprehensive and cost effective insurance program. Travelers Casualty and Surety Co of America Crime I Recommended Quote Jefferson County Changes / Developments It is important that we be advised of any changes in your operations that may have a bearing on the validity and/or adequacy of your insurance. The types of changes that concern us include, but are not limited to, those listed below: 1. Changes in any operation such as expansion to other states or new products. 2. Mergers and/or acquisition of new companies. 3. Any newly assumed contractual liability, granting of indemnities, or hold harmless agreements. 4. Circumstances which may require increased liability insurance limits. 5. Any changes in fire or theft protection, such as the installation of or disconnection of sprinkler systems, burglar alarms, etc. This includes any alterations to same. 6. Immediate advice of any changes to scheduled equipment such as contractors' equipment, electronic data processing, etc. 7. Property of yours that is in transit, unless we have previously arranged for the insurance. 8. Any changes in existing premises including vacancy, whether temporary or permanent, alterations, demolition, etc. Also, any new premises either purchased, constructed, or occupied. ❑ No Changes and/or Developments Signature: Title: Date: 8 Jefferson County Premium Summary The estimated program cost for the options are outlined in the following table: Quote from Travelers Casualty and Surety Co of America (The Travelers Companies, Inc.) is valid until Gallagher is responsible for the placement ofthe following lines of coverage: 6/30/2017 Crime It is understood that any other type of exposure/coverage is either self-insured or placed by another brokerage firm other than Gallagher. If you need help in placing other lines of coverage or covering other types of exposures, please contact your Gallagher representative. Jefferson County Payment Plans CARRIER LINE OF COVERAGE PAYMENT SCHEDULE PAYMENT METHOD Travelers Casualty and Surety Co of America Crime Three -Year, Prepaid Agency Bill (The Travelers Premium Companies, Inc.) 10 Jefferson County Program Details Coverage: Crime Carrier: Travelers Casualty and Surety Co of America Policy Period: 6/30/2017 to 6/30/2020 Form Type: Crime Discovery Not Applicable Not Applicable Coverage: Additional Coverage: 11 Jefferson County Other Significant Terms and Conditions/Restrictions: Premium $14,943.00 ESTIMATED PROGRAM COST $14,943.00 12 Jefferson County Jefferson County Proposal Disclosures The following disclosures are hereby made a part of this proposal. Please review these disclosures prior to signing the Client Authorization to Bind or e-mail confirmation. Proposal IMPORTANT: The proposal is an outline of certain terms and conditions of the insurance proposed by Disclaimer the insurers, based on the information provided by your company. It does not include all the terms, coverages, exclusions, limitations and/or conditions of the actual policy contract language. The insurance policies themselves must be read for those details. Policy forms for your reference will be made available upon request. We will not be operating in a fiduciary capacity, but only as your broker, obtaining a variety of coverage terms and conditions to protect the risks of your enterprise. We will seek to bind those coverages based upon your authorization; however, we can make no warranties in respect to policy limits or coverage considerations of the carrier. Actual coverage is determined by policy language, so read all policies carefully. Contact us with questions on these or any other issues of concern. Compensation One of the core values highlighted in The Gallagher Way states, "We are an Open Society," and our Disclosure open society extends to the compensation Gallagher receives. In general, Gallagher may be compensated as follows: 1. Gallagher Companies are primarily compensated from the usual and customary commissions or fees received from the brokerage and servicing of insurance policies, annuity contracts, guarantee contracts and surety bonds (collectively "insurance coverages") handled for a client's account, which may vary from company to company and insurance coverage to insurance coverage. As permitted by law, Gallagher companies occasionally receive both commissions and fees. 2. In placing, renewing, consulting on or servicing your insurance coverages, Gallagher Companies may participate in contingent and supplemental commission arrangements with intermediaries and insurance companies. Contingent commissions provide for additional compensation if stipulated underwriting, profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by Gallagher with the particular insurance company and/or through the particular intermediary, not on an individual policy basis. Some insurance markets, including Gallagher -owned intermediaries, have modified their commission schedule with Gallagher, resulting in an increase in certain commission rates. These additional commissions, commonly referred to as "supplemental commissions" are frequently known as of the effective date of the applicable insurance placement, but some insurance companies pay this commission later and apart from when commission is normally paid at policy issuance. As a result, Gallagher may be considered to have an incentive to place your insurance coverages with a particular insurance company. Note: Upon request, your Gallagher representative can provide more specific market information regarding contingent and supplemental commission related to your insurance coverage placed through Gallagher. 3. Gallagher Companies may also receive investment income on fiduciary funds temporarily held by them, such as premiums or return premiums. 4. Gallagher Companies may access other facilities, including wholesalers, reinsurance intermediaries, captive managers, underwriting managers and others that act as intermediaries for both Gallagher and other brokers in the insurance marketplace. Gallagher Companies may own some of these facilities, in whole or in part. If such a facility is utilized in the placement of a client's account, the facility may earn and retain customary brokerage commission or fees for its work. 5. Gallagher assists its clients in procuring premium finance quotes and unless prohibited by law may earn compensation for this optional value-added service. 6. From time to time, Gallagher may participate in insurance company promotional events or training and development that insurers provide for Gallagher employees. 7. Gallagher strives to find appropriate coverage at a competitive price for our clients. In order to achieve these goals, we gather and analyze data about our clients and their insurance coverage. This 14 Jefferson County Proposal Disclosures (Cont.) data and the resulting analytical tools help us better understand the current marketplace, more accurately predict future trends and offer tailored solutions to our clients. This data may also be provided to insurers pursuant to consulting service agreements from which we earn fees. If you have specific questions about the compensation received by Gallagher and its affiliates in relation to your insurance placements, please contact your Gallagher representative for more details. In the event you wish to register a formal complaint regarding compensation Gallagher receives from insurers or third parties, please contact Gallagher via e-mail at Compensation_Complaints@ajg.com or by regular mail at: AJG Chief Compliance Officer Arthur J. Gallagher & Co. 2850 Golf Rd., 8th Floor Rolling Meadows, IL 60008 TRINTRIPRA If this proposal contains options to purchase TRINTRIPRA coverage, the proposed TRINTRIPRA Disclaimer program may not cover all terrorism losses. While the amendments to TRIA eliminated the distinction between foreign and domestic acts of terrorism, a number of lines of coverage excluded under the amendments passed in 2005 remain excluded including commercial automobile, burglary and theft insurance; surety insurance, farm owners multiple perils and professional liability (although directors and officers liability is specifically included). If such excluded coverages are required, we recommend that you consider purchasing a separate terrorism policy. Please note that a separate terrorism policy for these excluded coverages may be necessary to satisfy loan covenants or other contractual obligations. TRIPRA includes a $100 billion cap on insurers' aggregate liability. The TRIPRA program increases the amount needed in total losses by $20 million each calendar year before the TRIPRA program responds from the 2015 trigger of $100 million to $200 million by the year 2020. TRIPRA is set to expire on December 31, 2020. There is no certainty of extension, thus the coverage provided by your insurers may or may not extend beyond December 31, 2020. In the event you have loan covenants or other contractual obligations requiring that TRINTRIPRA be maintained throughout the duration of your policy period, we recommend that a separate "Stand Alone" terrorism policy be purchased to satisfy those obligations. Actuarial The information contained in this proposal is based on the historical loss experience and exposures Disclaimer provided to Arthur J. Gallagher Risk Management Services, Inc.. This proposal is not an actuarial study. Should you wish to have this proposal reviewed by an independent actuary, we will be pleased to provide you with a listing of actuaries for your use. 15 Jefferson County Insurance Company Ratings and Admitted Status Travelers Casualtv and Suretv Co of America A++ XV I Admitted If the above indicated coverage is placed with a Non -Admitted Carrier, the carrier is doing business in the state as a surplus lines or non -admitted carrier. As such, this carrier is not subject to the same regulations which apply to an admitted carrier nor do they participate in any insurance guarantee fund applicable in that state. *The above A.M. Best Rating was verified on the date the proposal document was created. K iun,g LeWlSanu L,,ategaroars 1111101 A++, A+ 1111 &Lfwa Tor (fn $000 of FSC I FSC 11 FSC 111 FSC IV FSC V FSC VI FSO VII FSC VIII Re orfLd F'Dfimyhaber3' Surpfuz Up 10 t,4C5! t,45n5 to 2,0100 2,400 to ra,^ODC 5,45n4 to Q,44r4 0,004 tp 25,044 25,044 tg 50,444 544„444 tg 00,00rD 91DO'D44toi544,444 Ftu3 Condfamnat FSC IX FSC X FSC XI FSC: 11 FSC XIII FSC XIV FSO XV R'e ervL Funds) 253,9CC 105W,000 5+50,9r5C to 750,0010 7:50,000 to 1,00, 000 t,DW,440 to 1, X544,444 t,250,000 two 1,5444,45n4 t,54^Lr4,WrJ1 to 2,000,000 2,000,=D or niona A, A- Exoelll v: 5,++, S+ Good; ®, B_ Fahr C++, C+ fear -1,11 nail C, C- Weak iD Foor E Unden Regrallalory SLTerw 15,110 n F IrtnLiquidation Best's Insurance Reports , published annually by A.M. Best Company, Inc., presents comprehensive reports on the financial position, history, and transactions of insurance companies operating in the United States and Canada. Companies licensed to do business in the United States are assigned a Best's Rating which attempts to measure the comparative position of the company or association against industry averages. A Best's Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance obligations. It is not a warranty of a company's financial strength and ability to meet its obligations to policyholders. View the A.M. Best Important Notice: Best's Credit Ratings for a disclaimer notice and complete details at http://www.ambest.com/ratings/notice. Best's Credit Ratings are under continuous review and subject to change and/or affirmation. For the latest Best's Credit Ratings and Best Credit Reports (which include Best Ratings), visit the A.M. Best website at http://www.ambest.com. See Guide to Best's Credit Ratings for explanation of use and charges. Copies of the Best's Insurance Reports for carriers listed above are also available upon request of your Gallagher representative. Best's Credit Ratings reproduced herein appear under license from A.M. Best and do not constitute, either expressly or impliedly, an endorsement of (Licensee's publication or service) or its recommendations, formulas, criteria or comparisons to any other ratings, rating scales or rating organizations which are published or referenced herein. A.M. Best is not responsible for transcription errors made in presenting Best's Credit Ratings. Best's Credit Ratings are proprietary and may not be reproduced or distributed without the express written permission of A.M. Best Company. Gallagher companies use A.M. Best Company's rating services to evaluate the financial condition of insurers whose policies we propose to deliver. Gallagher companies make no representations and warranties concerning the solvency of any carrier, nor does it make any representation or warranty concerning the rating of the carrier which may change. 16 Jefferson County Insurance Company Ratings and Admitted Status (Cont.) BEST'S FINANCIAL STRENGTH RATINGIUII DE - (FSR) A. Best's Financial Strength Rating (FSR) is arca independent'. opinion of an Insurers financial strength and ability to meet its ongoling insurance policy and contract obligations, An FSR its not assignedto specific insurance policies or contracts and does not address any other risk, including, but not limited to, an Inquirer's claims. payment' policies or procedures; the abet ty of the insurer to dispute or deny claims payment on grounds of misrepresentation or fraud; of any spocific liability contractually borne by the policy or Contract holder. An FSR is not a racommendation to purchase, hold or terminate any insurance policy, contract or any other financial obligation issued by an insurer, nor does. It address the suitability of any particular policy or contract for a s'pe'cific purpose or puurchaser, In addition an FSR may be displayed with a rating Identifier, modifier or affilllation code that denotes a unique aspect of the opinion.. Bei Financial Strength Rating (FSR)Scale RatiangRating Fisting Category Cate goriiers Symbols Notches* Definitions Superior Aa A++ Assigned to insurance companies that have, In our opinion, a superior ability to meet their' ongoing insurance obligations, Excellent A A- Assigned to insurance companies that have, in our opinion, an exceulent ability to meet their ongoing insurance obligations. Good B+ B4 1, Assigned to insurance companies That have, iii our opinion, a good 'ability to meet their ongoing insurance obligations, Fair B B- Assigned to insurance companies that have, In our opinion!, a fair ability to meet their ongoing insurance obligations. Financial strength is vulnerable to adverse changes in underwriting and economic conditions. Marginal! �C.r Cn+ Assigned 'to insur'a'nce companies, that have, i!n our opiinioni, a marginal abiiity to meet 'their ongoing insurance obligations, Financial strength !is vulnerable to adverse changes in underwriting and economic conditions. Weak C C'., Assigned to Insurance companies that have, in our opinion, a weak ability to meet their ongoing insurance obligations. Financial strength is very vulnerable to adverse changes in underwriting and economic Conditions Poor..... D.,.... Assigned to insurance companies that have, lin our opinion„ a poor ability to meet their ongoing insurance oblig;ations... Financial strength isextremely vulnerable to adverse changes in undorwnfurug, and economic conditions, Each Best"s ,F"inanciaf Strahrg'th Pia tong Category from "Aa" to "'C7" includes a Plating Notch to retiact a gradation of financiaf'gtrength t eli'm tho Catargory, A Rating Notch is expressed with either a second plus *+'" or a minus ,�•" FSR Non -Rating Designations Designation Designation Symbols Definitions Status assigned to insurance companies that are publicly placed under a slgnlhcant farm ol't>aguutatory supervision controlf or restraint including B cease and desist orders, conservatorship or rehabilitation, but not liquidation - that prevents conduct of nonronal ongoing Insurance operations; an impaired iinsurer. F Status assigned to insurance companies that are publidy placed in liquidation by a court of law or by a forced liquidallon, an impaired insurer. Status assigned to rated insurance companies to suspend...., the outstanding FSR when sudden and significant events impact operations. and 5 rating Implications cannot be evaluated due to a lack of timely or adequate information; or In casas where continued maintenance of the previouslly pulkyhshed rating opinions is in v!iollation of evolving rogulla!tary requirements. NR Status assigned to insurance companies that are not rated may include previously rated Insurance companies or insurance companies that have never beenrated by AMERS. Rating DlecicsttFte - Use and Umitatlt it A Best's Credit Rating iSCR) is a lorward.-looking independent and objective opinion regarding an insurer's, is'suer's or financial obligation's relative creditworthiness, The opinion represents a. comprehensive analysis consisting of a. quantitative and qualitative evaluation or loWancesheet strength, operating performance and business profile or, where appropriate, the specific nature arid) details of a security. Because a BCR Is a forward-looking opinion as of the date it is released, itcannot be considered as a fact or guarantee of future credit quality and therefore cannot be described as accurate oar inaccuerate. A BOR is a relative measure of risk that. Implies credit quality and is assigned using a scale with a defined population of categories and notches. Entities or obligations assigned the same BCR symboll developed usinTg the same scale, should) ino't be viewed as completely identical in terms of Credit quality. Alternatively, they are, alike in category (or notches within a categoro, but given there is a prescribed progression of categories land notches) mood in aassigning'the ratings of a much larger population of enl.ities or obligations, the categories (notchesg cannot mirror the pireciise subtleties of risk that are inherent within similarly rated entities or obligations. . While a BCR reflects the opinions of A.M. Bent Rating Services., IInc. (AMBRS) of !reiateve creditworthiness, it Is rapt an indicator dr prediicior of defined Impairment or default probability with respect to any specific insurer, issuer' or financial dblligationi. A BCR is riot investment advice nor should It be construed as a consulting or advisory service„ as such, itis not intended to be utilized as a recommendation to purchase, hold or terminate any insurance policy, contract, security or any other financial obligation" nor does, It address Cher suitability of any particular policy or contract for a specific purpose or purchaser. Users of a BCR should not rely on lit in making any investment derision, however, if used, the BCR must be considered as only one factor. Users must make their own evaluation of each investment decision. A BCR opinion is provided on an "as is" basis without any expressed or implied warranty. In addition a BCR may be changed, suspended or withdrawn at any time, for any reason at the sole discretion of AiPIBRS. BCRs are distributed via the ARfIBRS websila at. '.rawwe..ul irtnce;:yt.ucuihl. For additional l iinformation, regarding the development of a BCR and other rating -related information aril diefinitions, including oullooks, modifiers, identifiers and affiliation erodes, please refer to the report titled "ilnd n'.Luiding Best's Credal R"stiivgps" available at no charge on the AMB RS websita. BCRs are proprietary and may not be reproduced without permission. Copyright 0 2016 by ft.W (Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED, Version 090116 17 Jefferson County Jefferson County Client Authorization to Bind Coverage After careful consideration of Gallagher's proposal dated 6/13/2017, we accept the following coverage(s). Please check the desired coverage(s) and note any coverage amendments below: The above coverage may not necessarily represent the entirety of available insurance products. If you are interested in pursuing additional coverages other than those addressed in the coverage considerations included in this proposal, please list below: Client Initials It is understood this proposal provides only a summary of the details; the policies will contain the actual coverages. We confirm the values, schedules, and other data contained in the proposal are from our records and acknowledge it is our responsibility to see that they are maintained accurately. We agree that your liability to us arising from your negligent acts or omissions, whether related to the insurance or surety placed pursuant to these binding instructions or not, shall not exceed $20 million, in the aggregate. Further, without limiting the foregoing, we agree that in the event you breach your obligations, you shall only be liable for actual damages we incur and that you shall not be liable for any indirect, consequential or punitive damages. By: Print Name (Specify Title) Signature Date: 19 Jefferson County Arthur J. Gallagher& Co. 'flie dangers of data breaches are far reaching, and the severity of these is being felt at all levels. You hear about the large rge. ones like A ntherriJarget and Sony, b tit in reality any organization that houses valuable information is a potential target from a range of vulnerabilities such as hackers for rogue employees. As an Arthur.j. Gallagher & Co. client, ),oil will receive complinientary access to the Gallagher cRisklitib; a dynarnic cyber risk managcnient tool that can help your organization be more proactive in asscssing your cyber rials posture. All Gallagher clients have access tt) the Gallagher eRiskHUb, and if You have not registered for access we recommend you do so today. "I"o access the Gaflaghei° eRislicihib twviP� A. Navigate to https//erisklhub.conVgailagher 2.Cornplete the new user registration at the bottom of the page. You pick your own user ID and password. The access code is 08167 .After registering, you can access the hub immediately using your newly created credentials in the member login box located in the top right of the page. Key eatwms of the GaIHaghejdrcall a lub�� • Gallagher Cyber Risk Due Diligence —A six -step process designed to walk our clients through a simple thought-provoking framework to encourage organizational communication, establish clear direction, and highlight priorities to better understand your cyber risk profile. • Security & Privacy Training—An overview of best practices for creating an effective security training program for your employees. • News Center—Keep up to date on what is going on in the world of cyber risk through handpicked articles, feeds and bliogs. • Learning Center—An extensive collection of white papers, articles, webinars, videos and bldg posts on a variety of topics. Looking for something specific'? Try the search box in the top right of the page to search the entire Gallagher eRiskHub. • Risk Manager Tools—A collection of tools with many different purposes such as researching known breach events, calculating your potential cost of a breach event and downloading free sample policies your organization can use as templates. • eRisk Resources—Infoirmatioin an third -party vendors that can assist your organization with improving your overall cyber risk. If you have, any (ILIC.Stions about the Gallagher eR:JskHub, please reach out to Adani Corti ni at adam cotfiniE ?)ajgxom or the eRiskHub support staff at support@)eriskhub.com. 'm H wj)" I 1l1 Jefferson County Claims Reporting By Policy The reason you buy insurance is to protect yourself against possible claims. That is why ARTHUR J. GALLAGHER RISK MANAGEMENT SERVICES INC. places such great emphasis on prompt and efficient service for its clients. AJGRMS performs four major functions in the claims process: 1. We advise you on procedures to take in handling the incident; 2. We file the claim with your insurance carrier when possible; 3. We follow up on the claim to assure adjusters are assigned and the claim is settled as quickly as possible; and 4. In cases where disputes arise, we work with the insurance company claims management to be sure all policy conditions have been met. Some insurance contracts require you to report losses directly. If this is the case it will be included with your outline. Your Responsibilities in Event of Loss: Your insurance policies detail specific duties that you have in event of loss. These duties will vary from one policy or type of coverage to the next. All contracts require timely reporting. Failure to do so may jeopardize coverage. The following basic guidelines remain fairly constant: 1. Call AJGRMS as soon as possible. Ask to speak directly to the Claims Department, which is staffed by SHON O'FALLON. He will take the necessary details, advise you how to proceed, and process the claim. 2. Remember that for physical damage claims (automobile collision, fire loss, etc.) the insurance company has the right to inspect the damage before they authorize repair. Therefore, do not, except at your own cost, voluntarily make any payment, assume any obligation, or incur any expense. When you call AJGRMS, the claims staff can advise you how to proceed. 3. When a loss involves any criminal acts, notify the police and obtain a case number. For auto accidents in Washington State it is no longer necessary to complete a Washington State accident report if\ the police investigated. However, for any accident with damages exceeding $750 and not investigated by the police a report must be filed. 4. Immediately forward to AJGRMS any demand, notice, summons, or other process received by you or your representatives. Remember AJGRMS wants you to be pleased with our insurance service. If you have any questions or concerns with claims adjustment, or a dispute over the settlement, be sure to call us at 253-627-7183 or 425-586-1075. 22 Jefferson County Bindable Quotations & Compensation Disclosure Schedule Client Name: Jefferson County Some carriers pay Gallagher supplemental or contingent commissions in addition to the policy commission. Contingent commissions are typically contingent upon performance factors such as growth, profit, volume or retention, while supplemental commissions are not. These supplemental or contingent commissions may range from less than 1 % up to 10% of the policy premium. Please refer to the Compensation Disclosure or contact your Gallagher representative for additional information. 1 If the premium is shown as an indication: The premium indicated is an estimate provided by the market. The actual premium and acceptance of the coverage requested will be determined by the market after a thorough review of the completed application. A verbal quotation was received from this carrier. We are awaiting a quotation in writing. 2 The commission rate is a percentage of annual premium excluding taxes & fees. Gallagher is receiving % commission on this policy. The fee due Gallagher will be reduced by the amount of the commissions received. 3 We were able to obtain more advantageous terms and conditions for you through an intermediary/ wholesaler. 4 * The non -Gallagher intermediary/wholesaler did not provide their compensation information for this proposal. The usual and customary compensation to a wholesaler/ intermediary ranges from 5% to 12%, but we cannot verify that range is applicable in connection with this proposal. 23 Jefferson County �� " "^°~°"-~-"-""~'J �����~�U �����~������~��� �-��U U � ���������������� �����~���� ��n n � � �- �� �� �� � �� n n^�^�n n n�� n ���� n n ��n .�^�nnn^�n n COVERAGE HIGHLIGHTS What is social engineering -fraud? When anemployee isintentionally mis|edintosendingmoney ordiverting apayment based onfraudulent information that is provided tothem inawritten orverbal communication such as anemail, fax, letter mreven aphone call. 11 Jow does this happen? Ifyouthinkthiswmn'thappentoyourorganizaion-think again. This surprisingly successful fraud happens every day tm unsuspecting employees asthey can receive message that appears tmbefrom alegitimate vendor, client mrsupplier that contains avariety mfrequests and information. In many cases, the fraudster has infiltrated anemail conversation and has been able tmobtain the client, vendor mrsuppliers signature section tmmake itappear even more legitimate. Some even amend phone numbers inthe email panel, smacall back tmaphone number would be directed tmthe fraudster, who would mfcourse verify the information. 11 Jow often does this happen? Targeted attacks mnbusinesses have risen 9l%over the last year/And ithas been reported that there are over l00,000 social engineering attacks launched each dayz Who caimbe a target? Businesses mfall sizes are affected bytargeted attaohs': ~ 34%mflarge businesses ~ 3l%mfmedium businesses ~ 30% of small businesses And many companies have been targeted at least once within the past year': ~ lin5small businesses ~ l in 2 large businesses 'Synnantec 2014 Internet Security Threat Report 'Hillard *cm,zeThe Front Line Report 'Synnantec 2014 Internet Security Threat Report 'Synnantec 2uwInternet Security Threat Report Over IMEMEM Attacks on businesses last year ~~~~~~~~~~~ 100,1000 rose social engineering attacks 91 IYC launched each day ~ ~ ~ All size businesses � are affected � ~ ~ ~ medium small 311% 30% Why yourbusiness needs protection Even well-managed businesses with proven best practices of employee training, partner background screenings and financial checks and balances can beinfiltrated. Fraudsterscongainthe confidence mfanemployee byposing asavendor, supplier mrclient and instruct him mrher tmdivert money. Most companies don't even realize adeception has occurred until they are notified bythe real recipient who never received alegitimate payment. And once discovered itcan betoo late. Therefore itisimportant tmunderstand the threat and beprepared tmprotect your business financially. That is why Travelers is offering asocial engineering fraud endorsement for VYrap+wand Executive C6ohce+wFidelity and Crime coverages. Traditional Fidelity and Crime coverage policies often limit losses tofraud schemes that abusiness is unaware of and isnot anactive participant inthe scheme. This endorsement specifically extends cmveragetmindudeinstancesmfsmda| engineering fraud perpetrated by perceived vendors and/or clients. Amanufacturer received anemail that appeared tobefrom one mfits vendors, requesting that apayment due tmthem be sent tmadifferent bank account number due tmanongoing audit. The payment was made tmthe new account number, and when the manufacturer received apast due notice and called the vendor, itwas uncovered that the vendor's email accounts had been hacked, and the email that was sent with payment instructions was, infact, fraudulent. Anattorney, contracted tmcollect funds for aclient, successfully secured payment and put the check in atrust account. The client requested awire transfer ofthe funds due tothem and the attorney initiated the transfer, believing that the check would be honored, only tmfind out later that the check was counterfeit. Anorder was made toaretailer for 1,000 laptops, and payment was received bythe retailer. Afew days later, the retailer received anemail requesting arefund, canceling the order, and also providing revised account information for the refund. The retailer issues the refund, and later receives aninquiry from the original client, astmthe whereabouts mfthe laptop order they paid for. The client's email system was hacked, and the refund request was fraudulent. Why Travelleirs? ~ We've provided effective insurance solutions for more than 150 years and address the needs of a wide range of industries. ~ VVeconsistently receive high marks from independent ratings ~ With offices nationwide, wepossess national strength and local presence. . Our dedicated underwriters and claim professionals offer extensive industry and product knowledge. -�����U���� ����� �'����U'tw ����� �~�'���� ��������� . . ~^, . .. . .~~ ..�� ~~ Crime coverage. 7��|�����[� ����������|���������]�^[�^���[���[�^���[�������[��������������������^s^� �����|����r)�C�,c��r�, Idw TRAVELERSJ Available through the Vyrap+w and Executive C6oica+w product suites. Travelers Casualty and Surety Company of America and its property casualty affiliates. One Tower Square, Hartford, CT 06183 This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations. @ 201sThe Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company mthe