Real estate and cyber liability

The past 36 months have been unprecedented with respect to society, work environments and political dictates. Entire companies pivoted to remote work environments in a matter of days. The consequential strain on the IT infrastructure was also unprecedented. One consequence of this new paradigm was system vulnerabilities were exposed. Every day a new company is added to the list of systems affected by a massive data breach. Hackers responsible for these types of security breaches can hold a company ransom or worse destroy their reputational credit. In the wake of the Silicon Valley Bank and Signature Bank failures, we expect bad actors to take advantage of the events to intercept wire instructions as clients and other third parties work to reroute funds to alternative banking institutions. We would like to reiterate the need to be wary of requests to change / update payment account information for invoices or any other payments to be made by the company and encourage you to remind our clients and other valued partners of the same.

Real estate owners, developers, and asset managers are in the crosshairs of those bad actors looking to monetize on cyber vulnerabilities. Massachusetts requires companies to provide comprehensive data security to all personal information stored on a server. In addition, regulators in 47 states, the District of Columbia, Puerto Rico, and the Virgin Islands require that individuals (customers, employees, citizens, students, etc.) be notified in the event their data has been lost, stolen or compromised. The most recent data breaches introduce a new twist to a company’s cyber liability exposure and potential for exposure to extortion and ransom.

Computer hacking, stolen laptops and fraud scams are the primary culprits leading to cyber liability events. Settlements can include monetary damages, credit monitoring services, hardware and software restoration, business interruption, reputational damages and ransomware payments. Companies can incur millions of dollars in expenses to secure compromised networks, assess damages, and notify customers.

Protection on any corporate database will never be 100%…