There are 3 sections of a Cyber Liability Policy
- Breach Liability
- Breach Rectification
- Digital Crime
…this post will discuss the 1st section called Breach Liability
1st what is a breach? A breach (short for data breach) is a security incident in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an unauthorized individual.
Breach Liability has 4 sub sections.
- Network and Privacy Liability: In my opinion one of the most important coverages, it protects you if your systems are breached (hacked) and the bad guys use what they find to harm someone else. In real estate, we hear this happening often when an agent’s email is hacked and the bad guys find out everything about a closing and uses that information to get the buyer to transfer money to the wrong bank account controlled by the them. The hackers send an email to the buyer or to the buyer’s agent or to another trusted 3 party involved; which appears to originate from the insured’s agent, everything is accurate except the wire transfer information.
- Internet Media Liability: As we use the web and social media more and more, real estate agents run the risk of causing personal injury as well as copyright/trademark infringement which includes: invasion of privacy, public disclosure of private facts, libel, slander, plagiarism or negligence. To ensure you are covered under policy conditions, we recommend that all agents who are active on social media become officially part of the agency’s communication department and are trained in appropriate procedures and protocols.
- Regulatory Proceedings & Fines: This section is to protect you from the cost and expense associated with a regulatory agency (FTC, FCC, HHS, etc) investigation and any potential fines they decide to impose. We don’t think these large governmental authorities will be auditing and fining residential real estate agencies but it is possible for the state’s Real Estate Commission to get involved.
- Payment Card Industry/Loss (PCI): This section addresses penalties and assessments levied by the Payment Card Industry (PCI) resulting from a data breach of credit card information. We generally do not quote this section of the policy since most of our real estate agencies do not accept credit cards.
*Based on policy information provided by: Victor O. Schinnerer & Company, Inc. Every coverage situation is different, and the final outcome depends on the unique facts, law and insurance policy involved. The E&O policy contains reductions, limitations, exclusions and termination provisions that impact coverage for a specific event. Full details of the coverage are contained in the policy