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It is always possible that your agency – or one of the third-party service providers (TPSPs) the agency works with – will be victimized by cyber criminals. If that happens, the New York financial services cybersecurity regulation requires you to notify the state Department of Financial Services (DFS.) While you're attempting to limit and repair the damage, these are some questions that might come up: What is a “cybersecurity incident"? The regulation defines that term in two parts. The first is “cybersecurity event," which has a very broad meaning. It is “any act or attempt, successful or unsuccessful, to gain unauthorized access to, disrupt or misuse an information system or information stored on such information system." Any of these could be a cybersecurity event: - Someone enters the wrong password three times while trying to log into your network and gets locked out.
- Someone sends your office a phishing email.
- Someone outside your agency calls an employee and asks for their network password.
The DFS is not interested in hearing about most of that stuff. They want to hear about “cybersecurity incidents." These are cybersecurity events that: - Have occurred at your work location, at any company related to your agency by ownership, or at a TPSP. and
- Impact your agency and require you to notify a governmental body such as the state police; or
- Have a reasonable likelihood of materially harming any material part of your normal operations; or
- Result in the deployment of ransomware within a material part of your computer systems.
If it affects you, one of your affiliates, or one of your TPSPs, and it either requires you to notify the authorities, will likely substantially harm any crucial parts of your operations, or results in extortionists shutting you down, you must report it to DFS. When do we have to report the incident? “(A)s promptly as possible but in no event later than 72 hours after determining that a cybersecurity incident has occurred at the covered entity, its affiliates, or a third-party service provider." The clock starts ticking when your office has determined that an incident occurred. That could be when your technology people confirm that your systems were hacked, or it could be when a TPSP informs you that it has suffered a breach. How do we report an incident? The regulation requires the covered entity to make the report electronically on the DFS portal (https://myportal.dfs.ny.gov/). It's the same portal where your agency makes the annual compliance filings and where agencies and individuals submit exemption filings when appropriate. How do we fill out the report? DFS has provided instructions on how to complete it. What happens after we submit the report? If DFS decides to investigate the matter, they may contact your office for additional information. Understand that, if the incident occurred to one of your insurance carriers, any agency significantly impacted by the incident is required to report. That means DFS may receive a large volume of notifications. It is possible that they might not contact every agency that notified them. What happens if we do not report an incident? The regulation states that any “failure to act to satisfy an obligation" is considered a violation. DFS has authority to penalize violators. Anything else we should do? Create the strongest cybersecurity program you can reasonably afford to reduce the odds that you will ever have to make this report. Your time is better spent serving your clients than repairing the damage a cyber-attack can cause. Where can I get more information? Three good sources: |
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Question from a Big I New York member: “Does a grocery or supermarket selling beer need Liquor Legal Liability Coverage? In my mind, and I may be very wrong, a bar serving liquor needs it as they have a responsibility not to serve people who look or sound intoxicated. Can you make a cashier working in a supermarket or grocery assessing customers if they are intoxicated before checking out wine or beer liable for an injury?"
Answer: In my opinion, yes, it needs Liquor Liability Coverage. Reasons: -
They sell alcoholic beverages. If an injury or property damage occurs as a result of a person's intoxication, the person suffering the injury or damage may sue anyone involved in the chain of sale. For example, customer buys a case of beer at a supermarket, drinks a quarter of it in a couple of hours, and opens fire on a cable guy who has come to service the home. Cable guy sues everyone including the supermarket that sold the beer. This is not hard to imagine actually happening.
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Section I—Coverages — Coverage A Bodily Injury and Property Damage Liability in the ISO
Commercial General Liability Coverage Form,
CG 00 01 04 13, as amended by
New York Changes – Commercial General Liability Coverage Form,
CG 01 63 04 17, excludes Liquor Liability Coverage for a named insured who is in the business of selling alcoholic beverages. Specifically, it states the insurance does not apply to BI or PD “for which any insured may be held liable by reason of … contributing to the intoxication of any person …"
- The Insuring Agreement under that coverage states, “We will have the right and duty to defend the insured against any 'suit' seeking those damages even if the allegations of the 'suit' are groundless, false or fraudulent. However, we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply." The insurer is obligated to defend the insured against the lawsuit
only if the insurance applies to that BI or PD, and it
does not apply to BI or PD for which an insured
may be held liable by reason of contributing to a person's intoxication.
- The Insuring Agreement in the ISO Liquor Liability Coverage Form,
CG 00 33 04 13, as amended by New York Changes – Liquor Liability Coverage Form, endorsement CG 26 03 04 17, states:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "injury" to which this insurance applies
if liability for such "injury" is imposed on the insured by reason of the selling, serving or furnishing of any alcoholic beverage.
We will have the right and duty to defend the insured against any "suit" seeking those damages even if the allegations of the "suit" are groundless, false or fraudulent. However, we will have no duty to defend the insured against any "suit" seeking damages for "injury" to which this insurance does not apply. We may, at our discretion, investigate any "injury" and settle any claim or "suit" that may result. … If the store carries this policy, the insurer must pay for the store's legal defense even if the lawsuit is stupid. That's the real value of the policy for this type of operation. It may be unlikely that a court would hold them liable, but it's highly likely that an enterprising plaintiff's attorney will name them as a defendant in a lawsuit. This policy makes the difference between whether the insured must foot the bill for the lawyers to defend it or an insurance company does. That's why I think the store needs the coverage – to pay for its potential legal defense, not so much because it may be held legally liable. If the store sells beer, it's vulnerable to potential lawsuits. ISO rules say to refer to the individual insurer for the applicable rates, but I note that there is a separate classification for “Package Stores and other retail establishments selling alcoholic beverages for consumption off premises." I would expect the rates to be lower for this classification than for the others.
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Question from a Big I Connecticut member: "I was hoping you could provide clarity for me and a client of ours. They’re a general contractor and will be taking on a project which requires an Owners and Contractors Protective Liability (OCP) policy. How would this impact our General Liability and Workers' Compensation policies which are currently in place ? Would we include the sub costs for the project requiring the OCP as part of our GL sub costs for rating purposes? I suspect the WC payroll should include payroll associated with the OCP project, but it would feel like double dipping from a rating standpoint if we also have to include the sub costs on the GL policy. My carrier underwriter is not able to provide an answer, unfortunately. She just doesn’t know and I’ve been going back/forth for a few months trying to obtain clarity for my client."
Answer: With regard to the Workers' Compensation payroll, the OCP coverage form (ISO form CG 00 09 04 13) has a Workers' Comp exclusion (see SECTION I – COVERAGES BODILY INJURY AND PROPERTY DAMAGE LIABILITY, Exclusion 2.e.). Therefore, the existence of an OCP policy has no effect on the rating basis for the WC policy. Regarding the CGL coverage, I disagree that it is double-dipping to charge for the project cost in determining the premiums for both CGL and OCP policies. It's important to keep in mind that that your client will not be the named insured on the OCP policy. Rather, the project owner is the named insured; your client is the contractor charged with furnishing the policy. The OCP coverage form states: Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. … SECTION I – COVERAGES BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. … b. This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence" and arises out of: (a) Operations performed for you by the "contractor" at the location specified in the Declarations; or (b) Your acts or omissions in connection with the general supervision of such operations; (2) The "bodily injury" or "property damage" occurs during the policy period … In this situation, coverage applies to BI and PD only if it is caused by an occurrence and arises out of operations performed for the project owner by your client. Nowhere in the form does it say that the “contractor" (defined as “the contractor designated in the Declarations") is an insured. In this situation, the project owner is an insured and your client is not. The insurer has the “right and duty" to defend the project owner (but not your client) against a lawsuit seeking damages because of covered BI and/or PD. If your client is named as a defendant in the lawsuit, they must seek coverage and defense under the CGL policy. The project owner has coverage under your client's CGL policy only if the policy grants additional insured coverage to the owner. Assuming the owner is not an additional insured, this is how the coverage looks:
 Since both the CGL and OCP policies will conceivably provide coverage, the insurer is justified in using the same premium basis for both.
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New York's new law on retail worker safety took effect last week. If your agency writes the Workers' Compensation insurance for any small retail stores, you may want to point them to newly published materials from the state Labor Department. Passed by the state legislature and signed into law by Gov. Kathy Hochul in 2024, the Retail Worker Safety Act took effect for most retail stores on June 2. It applies to all New York State employers who employ 10 or more employees to work in any store that sells goods directly to the public at retail. It does not apply to employers who primarily sell food to be eaten on-site. It also does not apply to service providers such as insurance agencies. All covered employers must: - Adopt a retail workplace violence prevention policy.
- Provide employees with retail workplace violence prevention training.
Employers with 500 or more retail employees in New York will be required to provide employees with silent response buttons to request security assistance. They will also be required to train employees in their use. This requirement takes effect on January 1, 2027. The department has published resources to help employers comply: The law does not require your insurance agency to do anything for compliance. However, it may apply to some of your business clients. It may be a helpful service to make those clients aware of the requirements and point them to the department's resources.
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| In politics, persistence and perseverance pay off. Today, the State Senate followed the lead of the Assembly and passed legislation repealing the NYC “Anti-Arson" application! Big I New York will urge Governor Hochul to act quickly on this important insurance industry reform.
Despite this relic from the 1980's having long outlived its usefulness, the bill remained stuck in the State Senate, allegedly due to opposition from a single member of the Fire Department of New York. For years, Big I New York and the industry at large repeatedly called to end its use, citing the duplicative and burdensome nature of the form. With New York City finally lifting opposition, the stage was set for the Senate to follow the lead of the Assembly and pass the bill.
As frustrating as the legislative environment can be, this victory exemplifies the importance of taking the long view toward building legislative relationships, education, and advocacy. Thank you to members who regularly engaged in calls to action and legislative meetings on this topic. While we anticipate the Governor will support the bill, we will proactively engage with her office to encourage her signature, at which point the law goes into effect. Please do not make any process changes until notified to do so by individual carriers.
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One question that comes in from time to time is whether a liability insurance policy (either personal, commercial general, or auto) must cover the loss in value of damaged property in addition to the cost of repairs. This comes up a lot with high-end cars, such as the Ferraris, Corvettes, and Maseratis of the world. The car gets hit by an at-fault driver. The car's owner sees the resale value of the car plummeting and wants the other driver to pay for that. So, does the at-fault driver (and therefore the driver's insurance company) have to cover that loss of value? No. The courts in New York and Connecticut have arrived at similar answers to this question, and they won't make sports car owners happy. The New York State Court of Appeals (the state's highest court) addressed the issue in 2002 in Fisher v. Qualico Contracting Corp.: “As recognized in our case law, however, replacement cost and diminution in market value are simply two sides of the same coin. Each is a proper way to measure lost property value, the lower of the two figures affording full compensation to the owner." Similarly, the Connecticut Supreme Court ruled held in a 1951 decision, Whitman Hotel Corporation v. Elliott & Watrous Engineering Co.: “The ultimate measure of damages in a case such as this is the diminution in the value of the plaintiff's property caused by the defendant's tort. It is, however, well established that such diminution in value may be determined by the cost of repairing the damage, provided, of course, that that cost does not exceed the former value of the property and provided also that the repairs do not enhance the value of the property over what it was before it was damaged." Therefore, in both states the owner of the damaged property is entitled to the cost of repair or the reduction in the property's value, whichever is less. This is obviously not good news for owners of damaged luxury cars, but the courts have been clear. Don't expect liability insurers to pay for diminished value.
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Support Our Industry, Serve Our Communities: The insurance industry was built on one powerful idea: coming together to protect and support one another. That’s the spirit behind the GIVE Movement, and we’re inviting you - and your agency - to be part of it.
What Is the GIVE Movement?: Led by the Big “I” National Young Agents Committee (YAC), the GIVE Movement is a week-long initiative from June 1–10 dedicated to community service, charitable giving, and acts of kindness. It’s a nationwide call for agents, agencies, and carrier partners to give back, serve others, and share their impact using the hashtag #TCAgentsGive.
Whether it’s organizing a food drive, volunteering, fundraising, or simply supporting a cause you care about—your involvement makes a difference.
The spirit of the GIVE Movement doesn’t stop on June 10. We encourage year-round service and generosity in every form.
One of the most powerful ways you can contribute is by donating to the Bobby Salmon Big “I” Relief Fund. This fund offers direct financial support to independent agents and industry professionals affected by catastrophic events—when insurance alone isn’t enough.
When disaster strikes, this fund helps our colleagues and their families get back on their feet. It’s a reflection of what this industry is all about: standing by one another when it matters most.
🔗 Donate to the Bobby Salmon Big "I" Relief Fund
As future leaders in our field, young agents have a unique opportunity to shape what service and leadership look like in the insurance world. And in an industry where time is tight and schedules are full, GIVE Week offers a focused, high-impact way to give back - together.
Getting involved doesn’t have to be complicated. Every action - no matter how small - adds up when we act as one. |
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