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Category Archives: Business

5 Things you Need to Know about NFTs

Non-fungible tokens (NFT) have taken the digital world by storm in recent years. From Snoop Dogg to high school students, people and their NFTs are making waves.

But what are they? And are they a fad or here to stay? CFC has answered the top 5 questions about NFTs.

What are NFTs?
An NFT is a blockchain held token that at its most simplistic is a certificate of ownership over an original item, typically (but not always) a digital asset, such as artwork, audio, videos or even memes. As digital assets are so easily shared, downloaded or copied this provides ownership to one person for the original. In real art terms think of it like the fact that anyone can own a print of Van Gogh’s, The Starry Night, but there is only one original. The NFT is akin to owning an original digital asset.

By definition, fungible means replaceable or interchangeable, so a non-fungible item is the opposite, meaning it is unique and cannot be replaced by something else. For example, currency (including cryptocurrency) is fungible as you can exchange £1 coin for another and you’ll have the same thing, but an NFT is one of a kind.

Are NFTs and cryptocurrency the same?
No. The confusion usually stems from them both being stored on a blockchain. Cryptocurrency is essentially a coin and operates more like traditional money and is native to a blockchain. NFTs are more like digital deeds and are created on a blockchain. The biggest differentiation between the cryptocurrency or coins is that cryptocurrencies have their own blockchains, whereas NFTs are built on an existing blockchain. So for example on the Ethereum blockchain, the cryptocurrency native to the chain is Ether but the Ethereum blockchain is the most commonly used blockchain for the creation of NFTs.

What is an NFT marketplace?
An NFT marketplace is a platform that allows the buying and selling of NFTs. It’s like any large ecommerce site, but just for NFTs. There are many marketplaces which provide the minting process, which is how an NFT is created and becomes live on a marketplace for sale. Compared to traditional online marketplaces, purchasing fungible assets can be more time consuming and costly. To be a part of the NFT marketplace users are required to have a crypto wallet to store their cryptocurrency after selling an NFT.

Can NFTs be copied?
It’s the token that is the valuable part of the NFT which cannot be copied. However, this does not mean the asset itself cannot. Think of the token as an artist’s signature on a famous painting, while the painting can be copied, it’s the artist’s signature (or token) which makes it authentic.

When did NFTs become so popular?
In 2014 a digital artist minted the first NFT, Quantum. Following this, various other games, and platforms started utilizing NFTs and popularity started to build. But it was 2021 which saw the biggest boom, with the likes of Bored Ape Yacht Club attracting the attention of Eminem, Paris Hilton, and Snoop Dogg. McDonalds created the McRibNFT for a Twitter campaign, and the Kings of Leon’s NFT provided fans with a limited-edition vinyl and front row seats to future concerts. And little old Quantum was sold for over $1.4 million in a Sotheby auction.

The digital transformation of collectibles through NFTs enabled brands to engage with customers in new ways. Companies across the tech and media sectors are finding unique ways to implement NFTs into their products and services – whether this be in their games to add player engagement, or as part of a marketing strategy on behalf of their customers. The virtual platform Decentral held its first fashion show including famous designer brands such as Dolce & Gabbana and Paco Rabanne.

From a brand perspective investing into NFTs may be an inventive way to engage with their users and to build a sense of community. NFTs can be used to raise funds for charitable causes and to deliver unique experiences to their customers.

Source: www.cfcunderwriting.com

Technology for Isolation Alleviation

The corona outbreak has illustrated just how important technology is in our lives. Whether it’s allowing you to work from home, stay in touch with loved ones that you can’t be with, or keeping you fit when you can’t make it to a gym – technology is so essential to the human experience – now more than ever.

CFC receives a variety of tech risks from start-ups to SMEs, but there’s certainly been an influx as we all grapple with life in lock-down.

Here are some of the tech risks CFS is seeing which seem to have particular relevance in a COVID era:

Checkout-less shopping

Maintaining social distancing while in your local supermarket is a tough call at the moment, but some retailers are using artificial intelligence to operate stores without checkouts, so there’s no more queuing and no unnecessary groups of people! With onsite cameras, cloud services and sensor technology, all you need to do is download the app, scan in, grab those essentials and walk out!

Digital events for seniors

Borne out of the awareness that isolation can be especially tough for seniors who may already live a relatively solitary life, this app hosts digital events for elderly people. The app is helping to combat the loneliness epidemic with book clubs, regular religious and worship events and yoga – the perfect way for the elderly to stay connected during social distancing.

Social gaming

What better time to become a gamer?! eSports is becoming the fastest growing form of entertainment in the world, with over 550M viewers expected industry-wide by 2021!  This games developer is creating titles across a multitude of platforms including augmented reality, virtual reality, consoles, mobile, PCs, and interactive television.

Internet discovery platform

A new way to share content with friends and strangers – this platform finds the internet’s hidden gems using in-depth machine learning. Move over annoying algorithms that forever show you dog photos after that one accidental click! The platform recommends content (for example recipes, decorating, astrology, fitness) that the user may like due to their chosen interests, it also allows the user to save and share their favourite finds for others to discover. Browse corners of the internet the usual social platforms skip over – or let other users do the work for you!

Treasure hunt

This business is diversifying its proposition for 2020’s stay home world. Usually this tech company offers an augmented reality application that enables the user to go on treasure hunts around public spaces. With public engagement on hold, they’re providing fun adventures to play among family and friends in the form of escape rooms. Users are tasked with finding hidden codes, perform fun tasks and solve riddles. This should keep the kids busy for a little while!

Fitness from home

The gym may be closed, but no one wants to walk out of lock-down twice the human they walked in!  Now is the perfect time to try some new fitness regimes.  This app is packed full of instructional videos for yoga, HIIT, barre and quick 7-minute fitness work outs. Let’s get physical!

Sports engagement for kids

Using the app, kids can learn, practice and develop new sports skills. The app is designed to inspire youth with a virtual coaching and engagement platform. App users can also upload videos of themselves performing the skills for other children to learn from.

We will see some amazing new technology emerge as a consequence of the coronavirus era, as technology continues to respond to our changing lives.

Source: www.cfcunderwriting.com

Biotech Exposures During the Research & Development Life-cycle

There are many types of life science companies involved in the research and development (R&D) of new drugs and medical devices, but they generally fall into two camps, biotechnology firms that develop the drug or device, and service organizations who help bring those products to market.

The exposures that biotechs and service organizations face will evolve throughout the R&D process, and how quickly each company moves through this journey will depend on their individual product but can take anywhere from a few months to a few years.

CFC has outlined the phases of the R&D process to help you talk to your life science clients about the key exposures they face as they discover, develop and test their products.

Click here to download the full infographic below.

Source: www.cfcunderwriting.com


“Reading the Policy” Means Reading Every Word

Every insurance professional has had experience with small policy language changes that have big effects (usually negative) on coverage. Sometimes it’s a single word—added, deleted, or altered—that fundamentally changes the way a policy will respond to a given loss exposure, and those language differences are obviously the hardest to deal with, or even to find.

Take a look, for example, at this phrase from a modified commercial general liability (CGL) policy “aircraft, auto or watercraft” exclusion: “… the ownership, nonownership, maintenance, use or entrustment to others of any auto.…”

The term nonowership, of course, has a long tradition in commercial automobile insurance. It provides liability coverage for automobiles the insured does not own, hire, lease, rent, or borrow but that are used in connection with the named insured’s business. It includes autos owned by employees, partners, or members of their households used in connection with the business. So, it’s not a strange coverage term … in an auto policy. But remember, the policy under discussion is a CGL policy.

A knowledgeable CGL insured doesn’t expect to have coverage for liability arising out of the ownership, maintenance, or use of autos. But that same insured will expect to have CGL coverage in connection with auto-related exposures when some unrelated third party—for whose activities the insured does not otherwise have any legal responsibility—is the owner, operator, or user of an auto. (The use of vehicles by an independent contractor doing work for the insured is a common example. In such situations, the insured’s liability arising out of the nonownership of an auto is an important feature of CGL coverage, although few people would be likely to describe the exposure using that term.)

In this instance, the CGL insurer that was excluding coverage for the “nonownership of any auto” was one that markets its policies to firms with large land holdings, industrial operations, or retail establishments with substantial vehicular traffic. Warehouses, industrial sites, timber operations, quarries, and entertainment venues are examples. These risks typically have heavy traffic on their premises and perhaps personnel directing traffic in and out. An exclusion applicable to the “nonownership” of autos wipes out general liability coverage for these common exposures.

The modified exclusion in question was imposed in the middle of 1 of 23 pages of endorsements to a standard CGL policy. While it resulted in a material, and important, reduction in coverage, it could easily have gone unnoticed by an insured—or that insured’s insurance professional—unless every word of the policy and its endorsements were read carefully.

Source: International Risk Management Institute, Inc. (IRMI)

Contingent Business Interruption Insurance

Just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Standard business interruption policies are vital in these instances, providing protection against a variety of common interruptions, including natural disasters, equipment damage and vandalism.

But what happens when one of your suppliers or customers experiences an interruption that derails your operations? To help address this concern, contingent business interruption (CBI) insurance is crucial.

What is CBI Insurance?

Unlike traditional business interruption insurance that compensates the policyholder for a loss resulting from damage to its own property, CBI insurance lets businesses transfer the risk of certain losses to the property of a third party. CBI insurance is an optional extension of business interruption insurance that reimburses lost profits and extra expenses resulting from an interruption of business at the premises of a customer or supplier. Coverage is typically triggered by physical damage to a customer’s or supplier’s property, or to property on which the insured company depends.

In the policy itself, the covered third party property may be specifically named, or the coverage may simply blanket all customers and suppliers. There are a variety of scenarios where this type of coverage is useful:

  • When an insured business depends on a single supplier or a handful of suppliers for materials. In these instances, CBI insurance can help the insured stay afloat should they experience a break in the supply chain.
  • When a business relies on a single or a few key customers to purchase goods or services. For instance, if a natural disaster affects your primary customers and they are no longer able to purchase your goods, CBI insurance can provide coverage for lost revenue.
  • When a business depends on a nearby attraction or neighbouring commercial operation for customers. For instance, if your business is located next to an amusement park that attracts new customers to your store and that park closes down, CBI insurance can respond in kind and help keep your doors open.

When in place, CBI insurance can help employers cover ongoing expenses—like payroll and rent—should the insured’s revenue stream be impacted by interruptions at a third party. In many cases, it is not necessary that the customer’s or supplier’s property be totally shut down to trigger CBI insurance.

CBI coverage is provided for a covered loss during the “period of restoration.” This is a time frame specified by the insurer and relates to the reasonable amount of time it should take for the affected property to repair any damages and resume normal operations.

Evaluating Your CBI Needs

To truly understand your CBI insurance needs, it’s important to assess your exposures. CBI exposures will differ depending on the industry you operate in, but are most common in manufacturing, retail, hospitality and professional services.

Prior to meeting with your insurance broker and securing coverage, ask yourself the following:

  • If there is a temporary production stoppage at one or more of my suppliers, can my business survive? How long?
  • How much of my company’s operations rely on another entity?
  • Do I have alternative suppliers in place should an interruption occur?
  • Do I rely on one or a few customers to purchase the bulk of my products? Do I rely on a neighbouring business to attract customers to me?

To get started or to learn more about CBI insurance, contact your insurance broker today.

© Zywave, Inc. All rights reserved



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