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In Cybersecurity– A Good Offense is the Best Defense

2021 has been a watershed moment for cybersecurity incidents, as cybercrime has become a frequent headline, and cyber criminals have thrived on unsuspecting and/or unprepared businesses and institutions. For example, the Solar Winds attack exposed sensitive data from top companies like Microsoft as well government agencies[1], and the Colonial Pipeline attack substantially disrupted the petroleum supply chain[2]. We have seen an almost 20% increase in data breaches and attacks since last year.

Changing Laws and Expectations:

In response to these threats, President Biden issued an executive order in May 2021 to overhaul the federal regulations governing cybersecurity policies that are applicable to government agencies and federal contractors. This is only a first step; it is likely that states will implement similar policies.

In the private sector, larger companies such as financial firms and healthcare organizations have already implemented mechanisms to protect sensitive business, customer, and patient data, given compliance regulations and requirements. While large companies may be ahead of the curve, many are still unprepared given the sophisticated and ever-changing cyber security landscape.

For small and medium sized businesses (SMBs), the challenges are even greater. The U.S. National Cyber Security Alliance found that 60% of small businesses went out of business within six months of a data breach or cyber security attack. Moreover, many SMBs contract with the government and/or larger corporations, which are increasingly shifting the risks of data breaches and cyber security attacks onto smaller entities through indemnity provisions in their contracts. Therefore, SMBs often face significant first-party and third-party risks.

SMBs often believe they are not targets because of their size. A 2019 Cyberthreat Study found that 60% of senior SMB decision makers believed that they were unlikely to be attacked[3]. On the contrary, SMBs are easy marks for cybercriminals because their systems are data-rich and vulnerable. While 62% of cyberattacks hit SMBs in 2020, only 43% had any type of cybersecurity defense plans. It’s likely that these numbers only grew worse in the last few years given the number of employees working remotely.

Protect yourself and remain compliant:

So, the question is what can SMBs do to protect themselves? To begin with, SMBs should implement proactive solutions to prevent attacks and safeguard data such as:

  • initiating employee cybersecurity training;
  • preparing or updating policies and procedures governing information security practices;
  • instituting managed and monitored patching; and
  • implementing multi-factor authentication (MFA).

These are basic steps that can help minimize these risks. Additionally, SMBs should consider sitting down with legal counsel and their insurance broker to evaluate first-party and any third-party risks in the event of a data breach or cyberattack.

Get covered:

One of the most effective ways to mitigate your risk to a cyberattack is to obtain cyber insurance coverage. Cyber insurance is not one-size fits all. Cyber coverage needs to be tailored to your business and to the risks in your business. Otherwise, a cyber policy may provide little to no coverage for first-party or third-party harm in the event of a breach.

For SMBs with existing cyber coverage, you should expect to see premium increases of between 60-100% of your current premiums given the rising incidents. For SMBs that have no implemented MFA, monitored patching, or compliance and training programs, your premiums could go up even higher. Many underwriters may reduce coverage or even cancel existing coverages if technical and compliance policies, like those noted above, have not been implemented.

For SMBs without cyber coverage, you should consider discussing coverage with your broker before your upcoming renewal. Insurance companies are implementing stringent underwriting requirements for cyber coverage, which will require the implementation of technical and compliance policies.

As we move into 2022, SMBs should examine their existing systems, policies, and insurance coverages to ensure that they are protected if and when a cyberattack or data breach occurs.

If you have any questions about whether your cybersecurity risks, and whether your business is protected, please contact BMD’s Cybersecurity Practice Leaders, Kyle Johnson at kajohnson@bmdllc.com or Brandon Pauley at btpauley@bmdllc.com.

[1] https://www.businessinsider.com/solarwinds-hack-explained-government-agencies-cyber-security-2020-12

[2] https://www.bloomberg.com/news/articles/2021-06-04/hackers-breached-colonial-pipeline-using-compromised-password

[3] https://www.keepersecurity.com/assets/pdf/2019-CybersecuritySMB-Infographic-branded.pdf

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.