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Why Cyber Liability Insurance is So Important for the Real Estate Industry

Why Cyber Liability Insurance is So Important for the Real Estate IndustryProperty Managers Cite Cyber Threats Among Top Risks

At a recent conference where real estate and insurance industry experts met to examine a wide range of risks, cyber threats were among the top five issues discussed. This is not at all surprising considering the rash of data breaches across all industry segments that make headline news at what seems like a daily basis. (The other top key concerns for the real estate industry discussed at the conference included reputational risks, Ebola, foreign investments and violence on properties.)

One of the cyber risks discussed at the conference last month involved multi-family properties. Property managers of these buildings possess a plethora of personal identifiable information (PII) that can significantly affect a firm’s operation should a data breach occur. Owners and property managers of multifamily dwellings store emergency contact information as well as financial data (banking information, Social Security, credit reports, etc.) on residents. Their computers also handle employee payroll, vendor/contractor information, contracts, and more. Some buildings have computerized payment systems and building access codes. All of this information is music to a cyber criminal’s ear.

The results of a data breach can be devastating for a company including business interruption, reputational risks and other non-property exposures. To address this risk, property managers need to first review their risk management plan to determine the strength of their cyber security measures already in place and assess what is needed to boost these measures to mitigate the risk of an attack. For example, you may use a property management software system that allows on-line financial management, reporting and communication along with the ability to secure online payments processing, online maintenance requests and marketing of vacant units through rental advertising websites. Your software may also work on mobile devices with apps, increasing the threat of a cyber breach. And while the software may restrict user access, do you have adequate protections against offsite invasions from individuals looking for vulnerable data?

Also included in your risk management plan should be a program that addresses cyber-related losses – both first-party and third-party and the recourse for covering such losses. If a Cyber Liability insurance policy is not in place, then it’s imperative that one be purchased. Cyber Liability insurance can be designed to pay for notification costs, forensic research to pinpoint how the breach occurred, media relations, remediation expenses, accounting monitoring, legal fees, among other critical expenditures that come with a breach.

For more information about how Cyber Liability insurance can help protect your assets in the event of a breach or other type of network security failure, give the experts at Axis Insurance Services a call. We specialize in Cyber coverage, providing customized insurance programs for a wide selection of industry professionals, including those in the real estate industry. Call us at: (877) 787-5258.

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Blogged on: December 5, 2014 by Mike Smith
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