Real Estate Journal — Insurance/Title — October 11 - 24, 2019 — 9A
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Insurance/Title
By Jeremy Yohe, American Land Title Association Survey: Less than 60% of title companies have cyber insurance
title company owners. FBI da t a s h ow that in 2018, 11,300 vic- tims across America lost nearly $150 million due to real estate W
insurance, it’s important to verify whether the coverage is occurrence-based versus a
ire transfer fraud and cyberattacks are top of mind for most
liability (CGL) insurance is written on an occurrence form. Meanwhile, claims-made poli-
ria for coverage to apply. “Most companies have a bundle of insurances and you want to make sure coverages are consistent and integrated,” said Bill Burding NTP, gen- eral counsel and executive vice president of Orange Coast Title Co. “Simply having an E&O policy isn’t enough these days. While it may be the only requirement for some under- writers, title agencies should bundle various policies to get complete protection.” BREAKOUT BOX
Earlier this year, ALTA launched the Coalition to Co- alition to Stop Real Estate Transfer Fraud to raise aware- ness about the dangers of mortgage closing scams and wire transfer fraud. You can join the effort. • Join at stopwirefraud.org. • Use the content to protect your customers and your busi- ness. • Submit videos to share your story. Jeremy Yohe is vice presi- dent of communications for the American Land Title Association.
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.
claims-made policy. Occurrence policies cover claims arising out of damage or injury that took place during the policy period, regardless of when claims are made. Most commercial general
cies cover incidents that you report during the active policy period—or an extended report- ing period—and occur after a policy’s retroactive start date. Claims through this form of coverage must meet both crite-
Jeremy Yohe
wire fraud—that’s a 166% in- crease 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 cy- ber liability insurance policies, according to a nationally rep- resentative survey conducted last year by the American Land Title Association (ALTA). The survey of over 650 ti- tle agents nationwide asked agents about their experience with different insurance cov- erages, including errors and omissions (E&O), fidelity bonds and cyber insurances. Coverage for cyber attacks is in stark contrast to the number of agen- cies that have E&O insurance. More than 95% of title compa- nies 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 compro- mise. Cyber liability insurance protects the insured agent from damages arising from a data breach and exposure of non-public personal informa- tion by cyber theft and other cybercrimes. This coverage often includes managing the response to a breach, such as notifying regulatory agencies and affected consumers. When it comes to protecting a business from wire transfer fraud, coverage becomes less common. Only 25% of agents nationally have a social engi- neering endorsement or specific funds transfer fraud coverage, the survey found. Purchase of this coverage rises above 50% 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. When looking at different kinds of
Help Stop Wire Transfer Fraud
Providing Title Insurance for Residential, Commercial and Industrial Properties.
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First Bergen Title Agency, LLC Court Plaza North, Suite 101, 25 Main Street, P.O. Box 526, Hackensack, NJ 07601 Phone 201.343.3121 • Fax 201.343.1663 info@firstbergentitle.com • www.firstbergentitle.com
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