Cyber Liability Coverage for the Digital World
Globally, cyber crime is rapidly approaching conventional crime in terms of costs and damages. Recently, cyber attacks on real estate professionals have been on the rise, particularly in the form of wire transfer fraud.
What is Wire Transfer Fraud?
Wire transfer fraud is when transaction funds are transferred into a fraudulent account. In most cases, wire instructions are being changed by someone posing to be with the real estate firm.
How is this occurring?
Criminals are dropping flash drives with software viruses outside of real estate offices hoping agents will plug them into their computers. The infected computer can then be hacked and the emails monitored.
Criminals are also hacking email accounts of real estate firms, and/or agents, and monitoring their sales activity. They then send false transfer instructions from that email account to steal funds. The firm/agent can then become liable because they failed to protect their e-mail account.
In one case, a hacker from China gained access to a broker’s e-mail account, monitored the sale of a commercial property, and just prior to the close, sent an email from the broker’s account advising of a wire instruction change. The money went to an offshore account and was not recovered. Don’t let this happen to you.
5 Effective Tips to Maximize Cyber Security
Good news! The majority of cyber-crime can be combatted simply by remaining vigilant and knowing what red flags to look out for.
- Secure Internet Servers
Ensure that all e-mails, documents, and communications are sent, received, and stored on protected servers. If you’re using third-party servers/e-mail software, make sure the company you are using is reputable and secure.
- Discard Suspicious Technology
Don’t use flash drives that aren’t yours or that have been out of your possession for any length of time. Exercise caution even when using a colleague’s or client’s flash drive as you have no way of knowing if it has been compromised with viruses.
- Be Wary of Inconsistencies
Email fraud is an extremely popular way for hackers to gain access to personal and financial information. When responding to an email from a client or business partner, make sure the actual email address (not just the name) matches previous correspondence.
- Verify Everything
If anything at all appears strange, be sure to verify. Often, verification will only take a few moments at most and can save you a great deal of trouble. This is particularly true of financial and bank information, especially regarding transfers of funds.
- Scrutinize Employees
No one is in a better position to access sensitive information than an employee. Before hiring anyone, be sure to thoroughly review their record and employment history.
Criminals aren’t the only digital threat
It’s not only malicious, deliberate attacks that can cause data breaches. Human error and technical glitches can be just as damaging as criminal activity. In fact, only around 1/3 of data breaches are the result of criminal activity.
- The average notification cost of a data breach is $590,000.1
- The average post breach cost is $1,720,000.1
- The average additional cost of lost business has grown to $3,970,000.1
- The average TOTAL cost of a data breach is $7,010,000 — a 7% increase since 2015 1
Cyber liability is a serious threat. Don’t let it hurt your business.
CRES E&O policies come standard with Data Breach notification coverage.
To add extra coverage for cyber damages: complete one of the Cyber Liability Insurance Applications below and return it to CRES at firstname.lastname@example.org or fax it to 1.858.618.1655.*
*Coverage applications represent greater or less than $10 million in annual revenue.
1 Source: Ponemon 2016 Cost of Data Breach Study: Global Analysis