Cyber-attacks and data breaches are increasing among almost all sectors as the technology needed to prevent them falls far behind cybercriminals’ constantly evolving tactics. To this day, more than $75 million has been paid in cyber claims losses, according to the most recent study published cyber risk assessment and data breach services company, NetDiligence. However, the commercial real estate industry – an industry one might not associate cyber-risk with – is potentially one of the most vulnerable and profitable for cybercriminals to target. As a result, analysts predict that cyber insurance is on its way to becoming one of “the top growing type of insurance for real estate owners and operators,” explains Michael Shadeed of Franklin Street Insurance Services. Because cybercriminals go after Personally Identifiable Information (PII) due to their monetary value on the black market, rental applications, credit reports, leases and rental agreements, they are the perfect targets for cybercriminals.
By investing in cyber insurance, commercial real estate companies can be covered from potential lawsuits resulting from stolen PII and the many other costs associated with data breaches. A perfect example is the 2013 Target data breach which resulted in more than 40 million compromised credit and debit cards, leading to a settlement costing more than $250 million. While Target only had $100 million in coverage at the time, the company was not left completely alone when faced with the damages of the breach. Most commercial real estate owners and operators have access to confidential information and if breached, would not have the financial means to survive without insurance.