The benefits of Cyber Liability Insurance for Real Estate Agents

Life as a real estate agent is busy, always on the go and juggling multiple clients. You are often being pulled in multiple directions while staying focused on helping your clients get through what is regularly a stressful and complicated transaction. Now you have a new thing to worry about, cybercriminals. The real estate industry has been targeted by cybercriminals as a lucrative opportunity to steal information and money. There are two ways to help combat this new risk:

  1. Increase your cyber awareness for yourself and your clients to help avoid becoming a victim.
  2. Purchase a cyber liability policy to cover you in the unfortunate event of a breach.

If you are reading this blog post, you have begun #1. This blog, www.maximumcyberliability.com is designed to be a repository for useful risk management information that can help real estate professionals stay informed and increase one’s cyber awareness.

The 2nd way, owning a cyber liability policy, is a long-term commitment to having professional resources on your side when the cybercriminals come knocking. It is our opinion that unfortunately, it is WHEN not IF they attempt to hack your systems, so let’s talk (in plain English) about the benefits you receive from a cyber liability policy:

1) Breach Liability: What is a breach? A breach (short for data breach) is a security incident in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an unauthorized individual. Liability? The state of being legally responsible for the what the bad guys do with the information they have stolen from you to harm someone else. There are 2 situations that come top of mind when thinking about breach liability for real estate agents: Wire Fraud at Closings and Social Media Postings.
a.  Wire Fraud at Closings: We hear this happening often when an agent’s email is hacked and the bad guys find out everything about a closing and use that information to get the buyer to transfer money to the wrong bank account controlled by them. The hackers send an email to the buyer or to the buyer’s agent or to another trusted 3 party involved; which appears to originate from a trusted source such as your email, everything is accurate except the wire transfer information.
b.   Social Media: As we use the web and social media more and more, real estate agents run the risk of causing personal injury as well as copyright/trademark infringement which includes: invasion of privacy, public disclosure of private facts, libel, slander, plagiarism or negligence. To ensure you are covered under policy conditions, we recommend that all agents who are active on social media become officially part of the agency’s communication department and are trained in appropriate procedures and protocols.

2) Breach Rectification: This is a benefit of coverage that provides resources to help handle a breach in progress as well as clean up after it has stopped. You have access to a team of professionals which starts with a Data Breach Coach. (click here to find out what this is) , second is the cyber forensic professional needed to perform a structured investigation to determine what happened to which devices and what information was taken and hopefully figure out by whom. The 3rd element is the effort to comply with the various regulations required to notify your clients including credit protection services. Each state has their own laws which determine: what constitutes a breach, definitions of personal information, timing & method of notice, etc.

3) Digital Crime: This is coverage that mostly benefits the agency more than the agent. In this section, there is protection in case the agency has been deceived into sending their own money or money in escrow to the wrong account (akin to wire fraud mentioned above but in reverse) as well as if the bad guys directly transfer out money from the accounts without your participation. There is also coverage for Cyber Extortion which is when hackers take information or restrict access to systems and demand a ransom or else.

The important take away from any well-crafted cyber liability policy is that it aids the agent and agency during and after a cyber event as well as provides legal protection in the event of a lawsuit for 1st party and 3rd party losses.