Here’s why cyber security insurance is essential to real estate agents and small business owners
Cybercrime is a concept we are all familiar with. We would have read or heard about the worldwide WannaCry ransomware cyber attack in May 2017. Moving closer to home, we – or someone we know – might even have been personally affected by the recent SingHealthhacking.
And yet, we often have the misconception that such cybercrimes only happen to large corporations and government organisations. Is that really the case? Is cybercrime that far removed from our daily activities and business operations? Apparently not.
To fully understand this, ZUUonline attended the “Cyber Threats to Real Estate Agents” seminaron January 24, co-organized by the Singapore Estate Agents Association and financial advisory firm SingCapital. SEAA recognizes the growing importance of cyber security and chose to partner with industry experts like SingCapital to educate the real estate agents in Singapore, and provide access to reliable insurance providers.
The revelations from the seminar were truly eye opening.
Former hackers turned founders of cyber security consultancy Ctrl Alt Del Pte Ltd, Lim Ming Cheng (pictured above) and Nelson Mah, addressed the audience with some startling findings.
According to the pair, 1750 Singapore websites were defaced in 2018, with 43% of cyber crimes targeted at small and medium sized businesses. The severity of the cyber attacks caused 60% of the affected businesses to suspend their business activities within the next half year period.
Globally, nearly $600 billion is lost to cybercrime every year. That is almost 1% of Global GDP.
How can cyber threats affect your real estate business?
Mah and Lim demonstrated how an open wifi connection can allow hackers access to an unsuspecting victim’s phone, and allow the former to send messages on the latter’s behalf without their knowledge. As real estate agents or small business owners and employees, hackers could impersonate them to receive funds from clients and collect other sensitive information.
Other common cyber threats include malware, and phishing. Malware is a type of virus that is designed to exploit your system. It can be disguised as an innocuous looking file, like a pdf resume sent to an SME’s HR department or a downloaded file from a malicious website. Once the malware is opened, hackers can quickly gain access tosensitive data like passwords, banking information and other personal data from the victim’s computer.
Phishing attacks, involve a fake email or fake website that aims to collect sensitive personal and banking information that is entered by the victim.
Even social media, can provide a vulnerability, or an opening for hackers to pinpoint a person’s exact location, based on their tweets.
Mah and Lim recommends that all real estate agencies and small business owners increase their employees cyber security awareness, keep computers and operating systems and software up to date, get insured, and backup their systems. In fact, they recommend that organisationsmove beyond antivirus, because AV only protects a computer’s operating system and cyberattacks go far beyond that.
The importance of Cyber Security Insurance
Alfred Chia (pictured above), the CEO of financial advisory firmSingCapital,highlighted the importance of having cyber insurance coverage, particularly for real estate agents. For one thing, agents are required to collect a lot of personal data from their clients, in order to ensure a smooth property transaction. The sheer amount of data they hold makes them a target by competitors, or even amateur hackers looking to hone their skills.
Chia told the audience about a real life case study where an agent’s email was hacked into. The hackers impersonated the agent, sent emails to his client and managed to scam the latter of several hundred thousand dollars. The client then sued the agent to recoup some of his losses, even though it was through no fault of his own.
That means agents need to be able to protect themselves.
While the government has already started the process by making professional indemnity insurance mandatory, Chia pointed out that most agents only look for insurance policies with the lowest premiums, disregarding the exclusions that come with the policy. “When problems do arise, and you realise you are unable to claim for many areas because of the exclusions, that’s when you’ll wonder if you did the right thing,” said Chia.
Chia’s presentation is particularly timely, coinciding with the recent introduction of “Digital Defence” as the sixth pillar of the Total Defence framework byDefence Minister Ng Eng Hen. The change, announced during Ng’s Total Defence Day message on February 14, highlights the growing importance of cyber security on a national scale.
So what does Chia recommend real estate agents look out for when purchasing cyber security insurance?
In the event of a cyber attack, Chia explains that there are 5 types of costs individual agents and small business owners can be expected to incur.
- Compliance & notification costs
- This includes the cost of informing the regulatory bodies, and affected clients, when data is stolen.
- Investigation, Restoration or recovery costs
- This occurs when business owners open an investigation to uncover the source of the attack, perform data decontamination, preservation and collection, as well as the costs of restoring the data and the equipment that was affect.
- Reputation Protection
- In this area, agents and business owners may need to engage public relations specialists and advertise heavily in different avenues, to manage and mitigate reputational damage arising from the attack.
- Legal Defence costs
- Agents and business owners may also need to engage legal counsel if any affect party pursues legal action against them.
- Business Interruption & Network Security Liability
- With larger firms, an interruption in business operations can lead to a significant loss of revenue, and loss of new potential contracts.
“Looking at the costs and the other serious repercussions involved, I would strongly encourage all agents to consider transferring this risk to an insurance company,” said Chia.
For instance, Chia notes that Sompo Insurance offers an affordable and comprehensive Singapore Professional Indemnity Insurance policy that is designed for real estate agents. It comes with three different types of coverage – basic, comfort and deluxe – to suit different organization needs, based on their size.
The basic plan coverage is available for all three types of policies, and covers the loss or theft of data coverage, restoration, cyber extortion, reputational risk coverage, confidentiality and privacy breach liability coverage, network security liability and media liability.
The comfort and deluxe plans are better suited for larger organisations, and also includes business interruption coverage, and contingent business interruption coverage. The deluxe plan in particular, also covers cyber crime, social engineering and PCI-DSS.
“There are a lot of cyber insurance policies in the market and they don’t come cheap because cyber security is a very high risk,” concludes Chia. “But Sompo has made theirs start from as little as $1.30 per day, the price of a cup of kopi.”
If you are interested to learn more about cyber security insurance and Sompo’s Singapore Professional Indemnity Insurance, you can speak with a trusted advisor from SingCapital today.