Wire Fraud and Cyber Attacks-are you vetting the company that you are steering your Buyers and Sellers to? Did you know that according the American Land Title Association, only 58% of title companies have Cyber Insurance?
Even more worrisome, according to the American Bar Association only 11% of law firms obtain cyber liability insurance! Read on to make sure you know the right questions to ask……..
Story from the American Land Title Association.
Survey: Less Than 60 Percent of Title Companies Have Cyber Insurance
Wire transfer fraud and cyberattacks are top of mind for most title company owners. According to the FBI, there has been a 1,100 percent rise in these crimes from 2015-2017. However, only 58 percent of title companies nationwide have cyber liability insurance policies, according to a nationally representative survey conducted last year by ALTA’s Data & Analytics Work Group.
The survey of over 650 title agents nationwide was conducted in February 2018 by ALTA’s Data & Analytics Work Group, a group of agent and underwriters from the two section executive committees. It asked agents about their experience with different insurance coverages, including errors and omissions, fidelity bonds and cyber insurances. This is the second of two articles examining insurance coverages. Click here to read “Most Title Companies Have E&O Coverage.”
Cyber insurance can’t protect a business from cybercrime, but the right policy can provide a financial backstop in the event of a breach or email compromise. Cyber liability insurance protects the insured agent from damages arising from a data breach and loss of non-public personal information by cyber theft and other cybercrimes. This coverage often includes managing the response to a breach, such as notifying regulatory agencies and affected consumers.
Larger title companies are more likely to have cyber policies. The survey found that 83 percent of companies with more than 50 employees reported having cyber insurance, while only 40 percent of title agents with less than 10 employees have this type of coverage.
Additional survey highlights:
· Smaller agents are more likely to get their cyber coverage as part of their E&O policy. Roughly half of agents with over $1 million in revenue obtain a specific cyber liability policy, with the inverse being true for agents with less than $1 million in revenue.
· Agents with less than $1 million in coverage, tend to select a deductible of $10,000 or less. Deductibles above $10,000 don’t become common until agents start buying over $2 million in coverage.
When it comes to protecting your business from wire transfer fraud, coverage becomes less common. Only 25 percent of agents nationally have a social engineering endorsement or specific funds transfer fraud coverage, the survey found. Purchase of this coverage rises above 50 percent for agents with over $7 million in gross revenue or more than 50 employees.
Cyber coverages continue to change on a yearly basis. It can be valuable to discuss new options with your broker prior to your policy renewal. Last year’s ALTA’s Best Practices Executive Committee produced a video on cyber insurance coverage that can be found here. This video breaks down the various available coverages and insuring clauses.