Around 2018, there was a major uptick in the amount of claims that Title Agents filed in response to an unprecedented increase in Social Engineering claims, where fraudsters trick employees into divulging sensitive information or transferring funds fraudulently. These scams often involve fake emails or phone calls pretending to be from trusted parties, leading to significant financial losses and damage to reputations.
As a result, carriers that provided E&O insurance to Title Agencies greatly limited or even eliminated coverage for Social Engineering claims under their policies. To better protect themselves, Title Agencies are now more and more using advanced technologies and practices. They have implemented better email security with phishing filters and verification systems, added multi-factor authentication to secure transactions, and improved employee training to recognize and handle scams. Title Agencies are also adopting secure communication methods, using fraud detection systems to monitor transactions, and exploring blockchain technology to ensure the integrity of transaction records. These measures aim to prevent future attacks and protect the integrity of their operations.
The Vanguard Specialty Title Agents policy provides up to $150,000 of Social Engineering coverage with only a $5,000 deductible if the insured calls to confirm the legitimacy of the source of the original wire transfer or check request.
However, we have recently updated our Social Engineering endorsement to eliminate the call back requirement if the Title Agency is utilizing one of the following nationally recognized software programs designed to prevent a Social Engineering claim:
ClosingLock
Safe Escrow
CertifID
Qualia Shield
This update to the Social Engineering endorsement is reflective of the risk management measures that many Title Agency insureds have implemented since 2018, and thus has effectively eliminated the need for a call back requirement.
If one of your Title Agent insureds uses such software, then they should definitely consider Vanguard Specialty’s program as the Social Engineering exposure is one of the most important to be covered.