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Tesla Brings Driverless Technology—and Cybersecurity Concerns—to the Masses

Last week, Tesla Motors unveiled another first for the auto industry: starting immediately, the company will be delivering upgrades directly to vehicles via the Internet.

“We view it the same away as updating your phone or your laptop,” said CEO Elon Musk, as reported in the Wall Street Journal on March 19.

Remote updates for cars was not the only taste of the future that Tesla announced last week. Talk is buzzing even louder about the new “driverless” capability that Tesla’s cars will get this summer (via wireless download, of course). The New York Times says that once your vehicle gets the upgrade, you will be able to turn on an “autopilot” when on major highways.

Tesla’s move further disrupts the traditional way of business in the automotive industry—the direct-to-consumer updates eliminate yet another reason to buy and service through a dealer. The convenience potential to consumers is obvious, and everyone is excited about driverless technology finally being within reach. What could be the downside?

Enter that fear du jour, cybersecurity. Capitol Hill is considering the unpleasant potential of bad guys being able to hack your car’s sophisticated computer system.

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Last year, Senator Edward Markey (D-MA) sent a letter to 20 car manufacturers asking them about their vehicles’ reliance on wireless computing technology and, in turn, the vulnerability of their systems. In February, he published the companies’ replies, and they weren’t completely reassuring (the full report is here).

According to Wired, Sen. Markey found that “nearly 100%” of vehicles sold today use wireless connections that could be used to access “sensitive systems or [to] compromise privacy.” Combine these findings with the recent exposé on 60 Minutes—where a DARPA hacker demonstrated the ability to hack into a Toyota Prius and gain control of the vehicle’s braking and acceleration—and you have a pretty good understanding of why Sen. Markey is concerned.

Manufacturers that responded to the Senator’s inquiry gave mostly ambiguous answers about the cybersecurity of their products. Some said they encrypt information such as driving history and physical location, while others admitted that they don’t use encryption.

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The same is true for third-party testing of vehicle cybersecurity—some do it, but many do not.

Tesla was one of three companies that chose not to respond to Sen.

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Markey’s questions. Do concerned consumers have cause to worry? After all, last year, Chinese hackers publicized their successful hack of a Tesla, although they limited their efforts to unlocking the doors and opening the sunroof.

The company is generally tight-lipped, but Musk has said that he is committed to security. He recently stated at a tech conference that “one of the key areas of focus for the company is…protecting…self-driving software from malicious attacks.”

Let’s hope so. A breach of self-driving software would, of course, be a much bigger problem than the Chinese hack of the car’s more superficial systems. And the non-response to Sen. Markey’s investigation would then start to resemble a self-inflicted wound.

For more on the risks of computerized vehicles, see “Robots Take the Wheel” in the March issue of Risk Management.

Drug-Free Workplace in the Age of Marijuana

Advocates for the legalization of medical marijuana have had a busy year. Three states–Maryland, Minnesota and New York–passed legislation this year, while Florida, Ohio and Pennsylvania have pending legislation or ballot proposals. Additionally, in two states, Colorado and Washington, voters have approved recreational marijuana in addition to medical marijuana, with the issue pending in Oregon and Alaska.

These measures have prompted many employers to ask if there is growing societal acceptance of marijuana and other drugs and should they expect a possible increase in employees using drugs on the job.

New data suggests the answer to both of those questions may be yes. An analysis from Quest Diagnostics, which provides workplace drug testing to private and public employers, found that in 2013, the percentage of employees that tested positive for drugs increased for the first time in 10 years, fueled by a rise in marijuana and amphetamines. The analysis involved 8.5 million urine, oral fluid and hair workplace drug tests in the United States.

The cost of substance abuse, including alcohol, on businesses, in terms of employee absenteeism, occupational injury, and impaired reasoning and reaction time, is significant–more than 6 billion annually by some estimates.

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A survey sponsored by the National Institute on Drug Abuse found that drug-using employees are 2.

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5 times more likely to have absences of eight days or more, 2.2 times more likely to request early dismissal or time off, 3 times more likely to be late for work, and 5 times more likely to file a workers compensation claim.

As a result, most businesses have comprehensive drug-free workplace programs in place, and 57% of American businesses required all job candidates to pass a drug test in 2011, according to the Society for Human Resource Management. Due in part to these workplace efforts, substance abuse by workers subject to testing declined incrementally over the past decade, giving hope that the epidemic of drug use and misuse was abating.

But the Quest Diagnostics report suggests those gains may be reversing. The positivity rate for 7.6 million urine drug tests in the U.S. workforce increased 5.7% in 2013 over 2012 rates, the first time the positivity rate for combined national workplace urine drug tests has increased since 2003.

As human resources executives work to implement and maintain drug-free workplaces, additional findings in the analysis offer valuable insights into current trends in workforce drug use:

  • Marijuana continues to be the most commonly detected illicit drug, according to the Quest Diagnostics analysis of urine drug tests. Marijuana positivity in the combined U.
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    S. workforce increased 6.2%, to 1.7% in 2013 compared to 1.6% in 2012. These increased positivity rates are consistent with findings from the 2012 National Survey on Drug Use and Health (NSDUH), which showed an increase in self-reported past-month marijuana use between 2007 and 2012–both among those respondents subject to employer drug testing and those not subject to such testing.

  • Amphetamines positivity continues to increase, continuing a multi-year trend. Combined U.S. workforce data in urine showed a 10% year-over-year increase in amphetamines positivity in 2013 compared to 2012. Of note in the U.S. general workforce, methamphetamine positivity in urine drug tests increased 27%; oral fluid methamphetamine positivity increased by 50%, and the positivity rate in hair testing jumped by 55%, suggesting that the higher incidence of methamphetamine identification in drug seizures by law enforcement is starting to be reflected in workplace testing. Amphetamines positivity rates are now at their highest levels on record and methamphetamine positivity rates are at their highest levels since 2007, across all specimen types.
  • Oxycodones positivity declined for the second consecutive year. Although the rate of opioid prescribing–the amount of opioids distributed and the average prescription size–all increased markedly in the United States over the past decade, the Quest Diagnostics Drug Testing Index report showed oxycodones positivity declined 8.3% between 2013 and 2012 and 12.7% between 2012 and 2011 in the combined U.S. workforce. Four states experienced double-digit declines in oxycodones positivity rates in both 2013 and 2012: Florida, Massachusetts, New Jersey and Ohio. Hydrocodone positivity remained at 1.3% between 2012 and 2013.
  • Despite double-digit increases in marijuana positivity in the two states with “recreational” use laws–Colorado and Washington–analysts at Quest Diagnostics cautioned that it is too early to tell whether the new statutes are correlated with increased positivity. Marijuana positivity rates in Colorado and Washington increased 20 and 23%, respectively, in the general workforce between 2012 and 2013, compared to the 5% average increase among the U.S. general workforce in all 50 states. However, both Colorado and Washington experienced dramatic increases and declines in marijuana positivity rates in the years prior to legalization, suggesting that multiple dynamics are affecting testing results in both states.
  • While the Quest Diagnostics Drug Testing Index report indicates that workforce drug use increased last year, HR managers have a variety of tools at their disposal to ensure safe and healthy workplaces, including vigilant oversight, strong zero-tolerance employment policies, employee drug screening, stigma-free mental health counseling and employee assistance programs. Preventing substance abuse in the workplace keeps employees safer and healthier, and leads to higher productivity, lower costs and a healthier bottom line.

Insider Threats Missing from Most Cybersecurity Plans

When it comes to damaging cyberattacks, a horror movie cliche may offer a valuable warning: the call is coming from inside the building.

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According to PwC’s 2014 U.S. State of Cybercrime Survey, almost a third of respondents said insider crimes are more costly or damaging than those committed by external adversaries, yet overall, only 49% have implemented a plan to deal with internal threats. Development of a formal insider risk-management strategy seems overdue, as 28% of survey respondents detected insider incidents in the past year.

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In the recent report “Managing Insider Threats,” PwC found the most common motives and impacts of insider cybercrimes are:

Insider Cybercrime Consequences

These threats can come from a variety of sources, from employees to trusted business partners who are given extensive access. Even after the costly lesson from the Target breach about the risk of contractors with system access, only 44% of respondents in PwC’s survey have a process for evaluating third parties before engaging in business operations with them, and just 31% include security provisions in contract negotiations.

To fortify against the risk, the firm recommends that organizations use a phased approach to build an insider threat management program over time.

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This should be formed with an eye to compliance with the National Institute of Standards and Technology (NIST) framework, which highlights the key functions: Identify, Protect, Detect, Respond, and Recover. To explain how and when to tackle these, the report explains:

building an insider threat program

Haulers of Crude Finding Coverage Scarce

HOUSTON—The recent spike in oil and natural gas production has led trucking companies to grow so quickly that they sometimes scramble to find qualified drivers. This has meant tightening coverage with a limited number of carriers and a market in “disarray,” Anthony Dorn, a broker with Sloan Mason Insurance Services, said today at the IRMI Energy Risk and Insurance Conference.

“Carriers have taken a bath on construction risks,” he said. “Only nine carriers will write crude hauling.”

There is a huge need for risk management in trucking right now, he added. “A lot of these are fly-by-night companies. They are running with drivers that have no experience, they are getting violations from the DOT left and right for not having licenses and adequate brakes on their trucks and they are running on dirt roads that aren’t made for 100,000 pound units,” Dorn said. “It’s a very risky place for underwriters. If we don’t do something as agents and as risk managers there will be fewer carriers.”

The recent downturn in the oil and gas market has also been a game-changer for some companies. Dorn predicts a “cleaning of the crop” of truckers. Inexperienced companies with new drivers will “fall by the wayside. What we are going to be left with are companies that are well-run with proper safety procedures in their fleet.”

Once that happens, he believes more carriers will enter the market. “But as of now, in general the whole market is in disarray,” he said.

He noted that agencies such as the Department of Transportation have vehicle reports available online, which insurers now frequently access when considering whether to take on a trucking company as a risk. He suggested that companies looking for coverage also check these reports and work closely with their risk managers and safety directors to correct any problems, such as drivers without adequate experience.

“There is a huge opportunity out there right now for risk managers to approach these companies and tell them, ‘If you don’t have a risk manager to help with your losses, you are not going to be able to find insurance.’ Right off the bat, I’d say 50% [of trucking companies] are declined as soon as they walk in the door,” Dorn said. As a result, he has seen companies declined by every insurer and forced to form a new LLC or even shut down.

Loren Henry, also a broker with Sloan Mason, said that another thing they are seeing as oil prices drop is companies formed to haul salt water for hydraulic fracturing looking to other opportunities. “They start hauling agricultural products and paper products, whatever there is that is not oil and gas related,” he said. “That is typically not going to be covered under their auto policy.

” He advised fleet owners to be aware of this and communicate any changes to their broker to find out specifically what is covered.

“We have had some losses recently, where a company made a shift from what they were hauling because they had lost some saltwater accounts. They were hauling cattle and they had a loss and it wasn’t covered because it is not in the policy language,” Henry explained.

“I don’t know where all these water-haulers are going to go,” Dorn added. “You’re going to see massive fleets go on sale and you’ll get huge discounts on trucks. You are going to see some transitions.”

Dorn added that one of his clients is now hauling salt water with half of his trucks and cattle with the rest. He advised his client to form another LLC for the cattle-hauling if he expects to get insurance coverage, as insurers would cover one or the other, but not both.

Asked whether companies are hiring risk managers and if they are also listening to their advice, he said, “Yes, especially after they get their premium. When they go from $5,000 a unit to $12,000 a unit their ears perk up pretty quick. They are willing to do almost anything to get that pricing down. It’s sad because companies are actually being put out of business because their premiums are too high.”

He expects the next year to see a lot of changes. “A lot of companies will go by the wayside,” he said. “A lot of smaller companies will be gone—they will sell their trucks or be bought out by bigger fleets.”