Why Real Estate Professionals Need Cyber Insurance

Here are some statistics affecting the real estate industry:

  • According to the FBI, scams targeting the real estate sector rose 1,100 percent from 2015 to 2017 and monetary losses increased 2,200 percent.
  • The FBI also reported that in 2017 nearly $1Billion in transactions were targeted and more than 9,600 (over 26 a day) victims reported financial loss. It increased in 2018 with May having a record number of victims.
  • eSentire, a cyber security company, reported in the 2nd quarter of 2018 the real estate industry had the second highest malware events.

Cyber related events are relatively new, but are becoming more frequent and complex. Errors and Omissions policies exclude cyber related threats, leaving you unprotected. Below are the major categories that are excluded in other policies, but are covered by ours.

Wire Transfer Fraud/Social engineering

The use of fraudulent wire instructions to trick persons involved in a transaction to wire money to a scammer. These are normally due to an email account that’s been compromised. Determining the source of the breach is difficult, so victims go after everyone involved in the transaction to recoup their lost money.

Actual Case:
Real estate buyer follows a false wire instruction and sends $300k to a fraudster. By the time the error is discovered the money has disappeared. Buyer then sues their real estate agent.
Forensic investigation reveals no breach on the agent’s computer or email account.
Jury finds against the agent and awards $300k to the buyer.
Even if the jury found in favor of the agent, the investigation and defense cost over $100k.

Data Breach

Most real estate professionals have sensitive client info that cyber criminals target. If there is a breach, or possible breach like the loss of a phone or computer with sensitive customer data, states laws may require notification and, in some cases, credit monitoring. Responding to these events can cost thousands and if not handled correctly can result in heavy fines, not to mention ruin your reputation.

Multimedia Liability

Adding pictures to your website, sharing a prior inspection, or using existing photos for a listing can trigger claims of copyright infringement. Also, writing descriptions of an area or using data obtained from the internet can start defamation, plagiarism, and other claims. Attorneys and others have bought Intellectual Property rights then go after people using them. Our policy will defend the claims, and pay for damages.

Cyber Extortion/Ransomware

This is when malware affects your computer files. Cyber Extortion threatens to release your, or your client info, and ransomware encrypts and locks your files, unless you pay a ransom. Both are also on the rise and target small and large businesses.

24/7 Cyber Response Team

Time is money. Trying to recover from a cyber breach can be daunting and time consuming. We have experts 24/7….no waiting for regular business hours. We know if it happens you need help at that moment and experts are there for you. The goal is to minimize the damage and get your business back up and running quickly.

How can you protect yourself, and your clients from online schemes? Education and taking basic security measures can help. Here are some basic security steps:

  • Dual Factor Authentication: Requiring a text code to change your email and other passwords
  • Enabling auto-updates for your operating system
  • Use DNS Services with advanced security or subscription virus software
  • Warning your clients of wire fraud in writing

Doing these simple steps will also qualify you for an insurance discount with us. Not sure how to do these? We have videos to help, you just need to meet the requirements within 72 hours of purchase.

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Insurance to Our Clients