As a real estate firm or broker, you know the importance of protecting your clients’ sensitive personal data.
As the threat of cyber-attacks continues to rise, you must also safeguard your business from potential breaches, as well as your liability for third-party wire fraud and other expensive real estate cyber claims.
This is where cyber liability insurance comes in. Because cyber is a new coverage for many real estate broker/owners, many are not sure exactly how much cyber insurance costs.
As some common real estate franchises are requiring that their local offices purchase cyber, the cost of cyber insurance is now a pressing question for many brokers.
Average Cyber Insurance Rates | Based on GCI
Cyber insurance rates have changed over the past few years due to an increasing number of large claims, and the rate of cyber insurance for real estate firms and brokers will vary depending on factors specific to your brokerage.
Typically, for $1 million cyber insurance limits, a real estate firm with $1 million in revenue can expect to pay between $1,000 and $2,700 annually for cyber insurance.
A real estate firm with $5 million in gross commission income (GCI) will probably pay anywhere from $2,000 to $6,000, and a firm with $10 million in revenue would pay between $3,000-$8,000 for cyber insurance.
A $20 million revenue firm should probably budget between $4,000 and $10,000 for cyber insurance, and brokerages doing over $100 million in GCI can expect to pay between $10-$25k+ for cyber each year.
Of course these figures are rough estimates, so the actual cost may differ based on the specific needs and risks of your real estate agency, franchise (if applicable), etc.
Once you have an idea of what you will need to budget, an independent insurance agency (like our team at FirmSecured) can help you get multiple cyber options from a number of insurance companies.
Factors Influencing Cyber Insurance Prices
Your firm’s previous claims history is a factor that can influence the cost of cyber insurance. If your firm has had cyber incidents in the past, this may indicate that you are at a higher risk of future attacks, leading to higher premiums.
Current risk management practices can also impact the cost of cyber insurance. For instance, if you have implemented multi-factor authentication (MFA) on all emails, you are likely to have a lower rate. MFA is an extra layer of security that can help prevent unauthorized access to sensitive information.
It is crucial to provide accurate information when applying for cyber insurance. Insurance companies require detailed information about your cybersecurity measures and risk management practices to assess your level of risk and determine your premium accurately.
Providing inaccurate or incomplete information may result in a denied claim or even policy cancellation. Here’s an interesting story of where partially misleading statements about MFA on a cyber insurance application resulted in a lawsuit.
Is the Cost of Cyber Insurance Worth it?
It is important to remember that the cost of cyber insurance should be seen as an investment in the long-term security and stability of your business.
Cyber claims can easily reach six-figures, and even a tenth of a percent of revenue for $1 million in cyber coverage can make the difference between surviving a cyber-attack and going out of business.
Work with a Knowledgeable Agent
In conclusion, cyber insurance rates or cost for real estate firms and brokers can vary widely depending on factors such as industry, revenue, previous claims history, and risk management practices. It is essential to evaluate your specific needs and consult with an experienced insurance agent to determine the appropriate level of coverage for your business.
Many insurance agents are still unfamiliar with cyber insurance, particularly for the real estate industry. So be sure you are working with an insurance advisor who knows both real estate and cyber insurance well.
Investing in cyber insurance can provide your business with the necessary financial support to recover and continue operating after a cyber incident. Do not put your real estate firm, agents, and clients at risk.
To get started on cyber options, complete this questionnaire, and our team will be in touch with multiple cyber liability insurance options for your agency. Also want to discuss your errors & omissions or general liability coverage? We can help with that too!
