Wire transfer fraud and cyberattacks are top of mind for most title company owners. FBI data show that in 2018, 11,300 victims across America lost nearly $150 million due to real estate wire fraud—that’s a 166% increase in the total money lost compared to 2017. This is only the tip of the iceberg. The FBI estimates that only 12-15% of this fraud is reported. While the losses mount, only 58% of title companies nationwide have cyber liability insurance policies, according to a nationally representative survey conducted last year by the American Land Title Association (ALTA).
The survey of over 650 title agents nationwide asked agents about their experience with different insurance coverages, including errors and omissions (E&O), fidelity bonds and cyber insurances. Coverage for cyber attacks is in stark contrast to the number of agencies that have E&O insurance. More than 95% of title companies have this type of coverage, according to a separate ALTA survey.
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 exposure 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.