Podcast
Questions and Answers
It is typical for cyber claims to be approved.
It is typical for cyber claims to be approved.
False (B)
It is unimportant to follow your own company's procedures when making a wire transfer.
It is unimportant to follow your own company's procedures when making a wire transfer.
False (B)
E&O carriers often deny coverage based on strict interpretations of policy provisions and exclusions.
E&O carriers often deny coverage based on strict interpretations of policy provisions and exclusions.
True (A)
An escrow agent should ignore any suspicious facts if no one has confessed to fraud.
An escrow agent should ignore any suspicious facts if no one has confessed to fraud.
Written policies and procedures are not necessary for companies dealing with wire transfers.
Written policies and procedures are not necessary for companies dealing with wire transfers.
Title companies are using AI-infused email security platforms to combat seller impersonation fraud.
Title companies are using AI-infused email security platforms to combat seller impersonation fraud.
A Michigan-based title agency stopped a seller impersonation attempt where the seller was opening emails from a network in China.
A Michigan-based title agency stopped a seller impersonation attempt where the seller was opening emails from a network in China.
Email security platforms embed fraud trackers into outbound emails that ping servers each time there's a language translation.
Email security platforms embed fraud trackers into outbound emails that ping servers each time there's a language translation.
The title agency was able to finalize the transaction after discovering the fraudulent notary documents.
The title agency was able to finalize the transaction after discovering the fraudulent notary documents.
It is unnecessary for employees to be able to act quickly and simultaneously when a security breach occurs.
It is unnecessary for employees to be able to act quickly and simultaneously when a security breach occurs.
Flashcards
AI-infused email security platform
AI-infused email security platform
A software program that monitors email activity after delivery, detecting anomalies and alerting title agencies to potential fraud.
Social Engineering Red Flags
Social Engineering Red Flags
A process where individuals attempt to gain unauthorized access to sensitive information or systems by manipulating people.
Examples can include phishing emails or impersonating someone to create an email address that looks similar.
Seller Impersonation Fraud
Seller Impersonation Fraud
Fraudulent activity in which individuals impersonate legitimate sellers to deceive buyers and steal funds or real estate.
Multi-factor Authentication
Multi-factor Authentication
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Third-party Fraud Protection Software
Third-party Fraud Protection Software
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Errors & Omissions (E&O) Coverage for Cyber and Wire Fraud
Errors & Omissions (E&O) Coverage for Cyber and Wire Fraud
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Common Denials in Cyber and Wire Fraud Claims
Common Denials in Cyber and Wire Fraud Claims
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Importance of Policy Review
Importance of Policy Review
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Written Policies and Procedures
Written Policies and Procedures
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Escrow Agent's Duty to Investigate Fraud
Escrow Agent's Duty to Investigate Fraud
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Study Notes
Errors and Omissions Coverage for Cyber and Wire Fraud
- E&O coverage for cyber and wire fraud is often denied.
- Insurers frequently deny claims, even when fraud occurs.
- Strict interpretation of policy provisions and exclusions often lead to denials.
- Agents must meticulously adhere to their own policies and procedures to avoid claim denial.
Case Study: Cyber Crime Endorsement Denial
- A closing agent's claim under a cyber crime endorsement was denied.
- The court ruled in favor of the insurer, citing the agent's failure to independently verify wire transfer instructions.
- This case highlights the importance of carefully reviewing policy language.
Practical Steps to Reduce Risk
- Establish and adhere to written policies and procedures.
- Regularly test and update policies and procedures.
- Stay informed about industry standards (national and state).
- Identify and mitigate social engineering red flags.
- Employ multi-factor authentication and identity verification tools.
- Employ email security alert systems (to detect anomalies).
- Regularly update perimeter security (web filtering, antivirus).
- Use strong, regularly changed passwords.
- Use email encryption.
- Consider third-party fraud prevention software (like Certified).
Email Security Alert System Example
- A Michigan title agency prevented a seller impersonation fraud attempt.
- An email security platform detected suspicious activity (email opened from a Nigeria IP address).
- The platform alerted the agency's IT team.
- The notarized documents were determined fraudulent.
- The buyer was protected from financial loss.
Key Risk Factors (Email Fraud)
- Location of the sender's email.
- Sender's network (location and type).
- Email content (including language translations).
Communication and Preparation
- Develop a clear communication strategy for potential fraud or breach scenarios.
- Ensure every employee can promptly and independently address potential or actual fraud.
Resources for Further Learning
- Underwriting bulletins.
- Florida Agency website.
- American Land Title Association (ALTA) website.
- Third party fraud protection software providers (e.g., Certified).
- Relevant ALTA resources (with training materials).
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