Cyber Threats & Cyber Insurance for Real Estate: A Guide
Bad tenants, natural disasters, high vacancies, delays in development, and market unpredictability have traditionally posed the biggest risk to the real estate industry.
But, today, they have one more to add at the top of the list: cyber attacks.
As more real estate companies shift their operations online, collecting sensitive data and using technology to develop smart homes and buildings, cyber attacks present an almost equal risk as the traditional ones.
In this blog, we'll take you through the top 3 cyber risks for real estate professionals to educate yourself and your client on, along with how to sell cyber coverage and cyber security to them.
Top 3 Cyber Risks for Real Estate Professionals
Real estate transactions contain large amounts of personal information, such as financial data, social security numbers, driver's license numbers, passport numbers, insurance information, and passwords. Cybercriminals know this and are ready to exploit vulnerabilities at any point.
In addition, the growing demand of IoT enabled buildings , expected to reach about 142 billion globally by 2028, puts increasing pressure on the real estate industry to adopt solutions to help protect against potential IoT attacks and other cyber threats.
Here are a few of the most common attacks real estate professionals should know and be prepared for:
1. Social Engineering attacks
Social engineering attacks rely on human interaction to gain access to systems or information. These attacks exploit relationships and trick victims into revealing passwords, installing malicious software, or sharing sensitive information.
Social engineering attacks can be very sophisticated, the perpetrator may impersonate a company leader and send a fraudulent email to request access to payroll records or may pose as a trusted but unknown person, like a vendor or new employee, to gain access to company credentials.
For example, in 2020, Shark Tank television judge Barbara Corcoran was the victim of nearly USD 400,000 in a social engineering scam. A cybercriminal impersonated her assistant and sent an email to the bookkeeper requesting a renewal payment related to real estate investments. The fraud was only discovered after the bookkeeper sent an email to the assistant's correct address asking about the transaction.
2. Business email compromise (BEC)
According to the FBI's 2020 Internet Crime Report, BEC cost businesses $1.8 billion in 2020. Business email compromise (BEC) is a type of cyberattack that uses email to trick victims into making unauthorized transfers of money or sensitive data. BEC attacks are often hard to detect, as the attackers use spoofed email addresses and fake websites to impersonate legitimate businesses.
In the real estate industry, a typical transaction involves many information exchanges between many parties. Each party also uses different communication methods to relay information however, email is still the standard. This means cybercriminals have many potential entry points to intercept an email for an attack.
Most ransomware attacks have a similar progression. After a computer is infected—usually through a phishing scam or via an unpatched system—the ransomware locks the user out. The data is encrypted and inaccessible, and a ransom demand is sent to the company. The message will typically say something like, "Transfer xyx bitcoin to this account by xyz date, or your data will be permanently deleted."
In the last five years, there's been a marked rise in ransomware attacks on real estate businesses. Several high-profile cases have been widely reported, including a major cyber attack in Baltimore back in 2019, halting virtually all property transactions.
4. IoT Attacks
The internet of things is revolutionizing the way we live and work. But as with any new technology, there are always some risks involved. The IoT refers to the growing trend of interconnected devices in the home, like thermostats, security cameras, door locks, and much more. Attacks on the IoT can take many different forms, but they all have one goal: to exploit the interconnected nature of the IoT to cause disruption or damage.
For example, a cyber attacker could target a smart home system and use it to disable the security system, leaving the home vulnerable to break-ins. Or, an attacker could target a commercial building, disabling elevators or fire alarms, putting lives at risk. And these attacks are increasing in frequency. In fact, according to a report by Kaspersky, four in ten smart buildings were the victims of IoT attacks in 2019.
How To Sell Cyber Insurance To Real Estate Professionals
Despite the increased risk, many real estate professionals remain uninsured against cyber threats. Often because they have not experienced an attack firsthand, therefore don't see the need for cyber insurance, or they believe that their existing insurance will cover them in the event of a cyber attack.
But, this presents a huge opportunity for brokers to sell cyber insurance to this market. So, if you're looking to sell cyber insurance to real estate professionals, you've already take one step by reading this, which is to educate yourself.
However, there are a few more important tips that can help you get started selling cyber insurance to real estate professionals.
- Help them understand the risks they face and how cyber insurance can protect them.
- Tailor your sales pitch to the specific needs of the real estate industry.
- Offer solutions that can help real estate professionals reduce their risk of being attacked, like cybersecurity through 1Fort.
- Follow up with your prospects after the sale to ensure they're happy with their coverage.
- Stay updated and educate yourself on real estate trends and insights
Join forces with 1Fort
By helping real estate professionals invest in cyber insurance, you give them the peace of mind that comes with knowing their data is secure and they are protected against cyber attacks.
For example, if a cybersecurity breach occurs, a cyber liability policy could provide coverage for notifying clients or customers about the breach, PR campaigns to restore reputation, cyber extortion demands, court costs, and much more.
Partnering with 1Fort means you not only help your clients stay protected, but you can feel confident selling, knowing you're getting them one of the best and most affordable all-in-one deals for both cyber insurance and security in the market. Not to mention help closing deals and great commissions on security!
Get in touch and learn how you can become a 1Fort partner today.