Why do real estate agencies need cyber coverage?
The Basics: What You Need to Know
What does cyber liability insurance even cover? The short answer is it will cover events like ransomware or cyber extortion, funds transfer fraud, breach response costs from security failures, and other liability you might be obligated to pay because of PCI Fines, copyright/trademark infringement, or other regulatory penalties. Some real estate franchisors are now requiring their franchisee’s to purchase and maintain cyber liability insurance because of the increased risk. Small businesses across industries are facing increased threats. Long gone are the days when cybercriminals only target larger companies.
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Are you wanting to continue learning about cyber insurance coverage and how FirmSecured can help? Let’s break down cyber for real estate agencies a little further.
A breakdown of real estate cyber claims and coverages
A quality cyber insurance policy will include both first party coverages and third party liability coverages. First party coverages pay for damages to your own real estate agency, and third party liability covers other cyber expenses and costs for which your agency is liable.
So what are examples of first party cyber claims?
Think about how expensive it would be if your agency needed to find out to what extent you might have been affected by a security or data breach. Consider how much it cost to notify affected clients in accordance with the law. Just the legal advise required throughout this process alone is expensive. Cyber insurance will cover the breach response costs from security failures or data breaches.
They will also pay for — cyber extortion, when hackers demand payment from you because of ransomware. Companies have received demands for millions of dollars, often in the form of virtual currencies. Be careful here: some policies will pay these claims on your behalf. This is what you want. Other policies that insurance agents are selling to real estate agencies will only reimburse you. This can be a problem when dealing with a large demand, especially if it is in cryptocurrency. Chances are you don’t have a crypto wallet available with the funds needed. Even if you did, the cybercriminal could likely be a federal watch list. You don’t want to be caught making payments in cryptocurrency to someone on a federal watch list. You definitely want your cyber insurance company to handle on your behalf.
Now think about the financial effects of an interruptions of your agency’s computer systems through a security failure. Cyber policies can cover business interruption losses, such as operating expenses or the net profit that you would have earned if it had not have been for the breach. Your agency would likely need to take out other extra expenses necessary to try to avoid a loss, like hiring consultants or needing employees to work overtime.
Many cyber policies will also pay the costs necessary to restore or replace your software or data because of a security failure.
Third party liability includes coverage for defense costs (legal fees, investigation, appeal costs) as well as damages or judgements that you become obligated to pay legally. Why might your agency be obligated to pay? Common third party liability claims include PCI fines.
FirmSecured is powered by Veritas Risk Management, an independent insurance agency in Northeast Tennessee. Our team has access to almost all of the companies offering cyber insurance to real estate agencies. After gathering some basic information from you and hearing your cyber concerns and needs, we are able to present multiple cyber options in a easy-to-compare & side-by-side format. Our goal as advisors is to help you find the best cyber insurance company for your needs as an agency, with the strongest coverage at the most competitive price.
Ready to get started on cyber options?
Real Estate E&O Insurance
E&O insurance companies are not all the same!
While many agents might not yet be aware of the importance of cyber liability, most brokers are familiar with errors and omissions coverage. That said, there is tremendous variety between different E&O insurance companies in both price, and especially coverage. Many policies exclude, or provide significantly less coverage for common claims. To see if your policy covers discrimination, copyright, escrow, BPO, property management, agent-owned property, or bodily injury or property damage claims arising from professional services, schedule time to review your policy together. This list is just a few of the potential gaps you should be aware of in your E&O.
General Liability Coverage
Have all of your liability insurance with one trusted agency
If you are considering cyber or professional liability coverage from FirmSecured, feel free to ask us about providing general liability options as well. The coverage protects your real estate agency from a number of lawsuits and settlements. The policy covers many general businesses liability exposures, such as some bodily injury claims, personal and advertising injury, and damage to premises rented to you (to name a few). Get started on your real estate general liability options.
