why
CYBER INSURANCE? Cyber Insurance Policies are required for all Coldwell Banker Companies. The need to carry Cyber insurance and the availability of Cyber insurance have increased due to the increase in Cybercrime over the last several years. This insurance protects the Company and its Agents and Employees against Cybercrime which has become the crime of choice for many criminals. Why is Cybercrime the preferred Crime of Choice? Because Cyber criminals can be located anywhere in the world, commit a crime from most anywhere in the world, hide in the dark web, and mask their identity making it difficult for authorities to catch and prosecute them. E&O Insurance policies do not cover Cyber Crime. Therefore, with the increase in this type of financial crime, it has become important to carry Cyber Insurance. As an agent, why do I need to be protected against Cybercrime with a Cyber Insurance policy? As previously mentioned, when a client is the subject of a Cybercrime, it is very difficult to capture and prosecute the criminal. However, when a client sues to recover their lost funds, the defense costs are extremely expensive. Without Cyber Insurance, both the Broker and Agent are individually left to defend themselves in a lawsuit.
Equally as difficult as catching the culprit, is for authorities to pinpoint the exact location where the breach of entry occurred that allowed the criminal to enter and commit the crime. We know that Financial Institutions, Title Companies, Lenders, and Escrow Companies are regulated and require the use of encrypted email when communicating with clients. The Real Estate Brokerage community lacks this requirement at this point in time and therefore may be more vulnerable to a security breach. Nonetheless, proving the criminals point of entry is usually impossible without catching the criminal. This can be likened to proving that a person caught COVID from one specific person. There may be good reason to suspect one person but proving that person gave you COVID is nearly impossible. Although the responsible party that allowed the cyber breach may never be proven, when a lawsuit happens, all parties are named - the wiring bank, the lender, the escrow, the title company, the brokerage, and the agent. Each party must provide and pay for a defense. CBW’s Cyber Policy ensures the company and its agent’s defense costs are covered to the limits of the $1,000,000 policy. For more coverage information, please refer to the documents from our Insurance Broker entitled ‘Two Types of Cyber Coverage’ and ‘Cyber Coverage 101’.