Cyber Liability / Data Breach Insurance
for Real Estate Professionals
In the old days, most people wouldn't have considered real estate and title agents as hot targets for Cyber Liability crimes, but times are changing. Today's reality, though, is that real estate professionals maintain and store the exact types of personal information that cyber criminals want most: Social Security numbers, credit and debit card numbers, bank account information, and driver's license numbers.
Combine this wealth of sensitive information with the fact that most real estate and title agents rely on computer and web-based systems to do their job, and you start to see why more and more small-business owners in the real estate industry are opting to carry Cyber Liability Insurance.
Cyber Liability Insurance (also called Cyber Risk Insurance and Data Breach Insurance) is a type of small business insurance that covers the cost of dealing with the fallout of a data breach. In its 2013 Cost of a Data Breach report, the Ponemon Institute estimates that the per-record cost of data breach is $188 . The same report estimated that a single data breach incident costs businesses an average of $5.4 million.
Read on to learn why cyber criminals tend to target small businesses — and what your real estate or title agency can do to prevent the financially disastrous consequences of data breach.
Why Are Small Businesses Susceptible to Data Breaches?
Real Estate and Title Agents: Why Are Small Businesses Susceptible to Data Breaches?
Did you know that 50 percent of all targeted cyber attacks in 2012 were aimed at businesses with fewer than 2,500 employees? Those numbers are from Symantec's 2013 Internet Security Threat Report [PDF] , which also concluded that businesses with fewer than 250 employees experienced the greatest increase in cyber attacks that year.
So why are small businesses so susceptible to data breaches? One word: unpreparedness.
Many small-business owners — including real estate and title agents — still don't believe that cyber risk is a real threat for their business. Your real estate office might have some of the information that a cyber criminal is looking for, sure, but wouldn't a larger business be able to provide more of it?
Maybe — but that larger business probably also has sophisticated anti-data-theft protections and procedures that small businesses may not be able to afford. Most cyber attacks are what researchers call "crimes of opportunity." If it's easy for hackers to gain access to your data, then they're bound to do it.
Cyber criminals can compromise your information in a variety of ways. For example, they can…
- Load malware or spyware onto your computer system.
- Crash your servers and cause data loss.
- Hack your email accounts.
- Hijack your business's website.
These are only a few examples. But many of them can be prevented by basic information security procedures. (For more information about cyber risk and how real estate agents can prevent data theft, read "Top Cyber Liability Risks for Real Estate Agents" on our blog.)
But sometimes cyber crimes and data breaches happen despite your best security efforts. This is where Cyber Liability Insurance steps in. Read on to learn how this small business insurance policy can protect your real estate or title business.
Cyber Liability Insurance Protects
How Cyber Liability Insurance Protects Real Estate and Title Businesses
Cyber Liability Insurance protects your real estate or title business after a data breach incident is detected. Sometimes detection can take weeks or months — which is one reason why data breaches tend to cost so much.
Most small businesses aren't able to shoulder the financial consequences of a data breach on their own. Cyber Liability Insurance covers some of the biggest expenses associated with recovering from a data breach to relieve the financial burden on small businesses.
Since lost or stolen data cannot be retrieved, replaced, or repaired in the way physical property can, Cyber Liability Insurance works a bit differently than other insurance policies. It cannot help you "undo" damage, but it can help you "control" the repercussions. Cyber Liability Insurance helps pay for a variety of expenses, including…
- Cyber extortion expenses. Sometimes cyber criminals hold your information "hostage" until you pay them. This is called "cyber extortion" and your insurance policy can help you pay the ransom.
- Legal expenses. After a data breach, your affected clients might decide to sue your business. Even if those lawsuits never reach a courtroom, you'll still have to pay for legal counsel and possibly a settlement.
- Notification of affected parties. In most states, the law requires businesses to notify affected partied after a data breach. Depending on the number of individuals involved, this could end up costing your business a significant amount of time — and money.
- Credit monitoring services. You may want to offer affected parties credit monitoring services in order to regain their trust and repair your relationship. Your insurance policy can help you pay for these services.
- A marketing campaign. After a data breach, your reputation may be tarnished — which is why your insurance policy helps you finance a marketing campaign to restore your image in the community.
Cyber Liability Insurance can be purchased as a standalone policy, or it can be bundled with other policies, such as the Business Owner's Policy.
Cyber Liability Insurance Quotes