In recent years, cyber incidents have surged in both cost and frequency. These incidents have become a pressing concern for organizations of all sizes and sectors—and construction companies are no exception. Although employers within the construction industry may think that their cyber exposures are minimal, this often isn’t the case. Rather, such vulnerabilities can come from a variety of different avenues and lead to devastating damages.
In fact, a recent survey found that over 75% of organizations in the construction sector experienced a cyber incident in the past year, making it clear the industry is frequently targeted. What’s more, many construction employers may not consider their cyber risks until it’s too late. That’s why cyber liability insurance is crucial. Cyber liability coverage can provide construction employers with protection against a range of cyber-related losses. Here’s why this type of policy is vital to have:
- Technology utilization is growing. As workplace technology evolves, many construction companies have integrated new devices in their operations. This may include office gadgets (e.g., laptops, computers and tablets) or operational advancements (e.g., drones and wearables). While this technology certainly offers benefits, it can also attract cybercriminals. By investing in cyber liability insurance, construction employers can stay covered as they enhance their workplace technology.
- Storing data carries risks. Most construction companies store sensitive data from both their clients and employees—such as names, addresses and financial information. If this data is compromised, construction employers could be held responsible and face costly legal ramifications. In these cases, cyber liability coverage can offer protection against the resulting expenses.
- Cyber incidents can be disruptive. It is increasingly common for cyber incidents to result in widespread business interruptions. This may include delayed communications, halted operations and unexpected technology shutdowns, all of which can carry serious financial consequences. Fortunately, cyber liability insurance can provide valuable assistance to construction employers if a cyber incident interrupts their key business functions.
- Third-party liability exposures are significant. Because construction companies typically act as third-party vendors, cybercriminals are more likely to utilize them as a platform for accessing and attacking their clients’ technology. As such, construction employers’ third-party cyber liability risks can be severe. Nevertheless, cyber liability coverage can offer protection amid third-party incidents.
Above all, it’s important to note that proper coverage is just one aspect of a successful cyber risk management program. Implementing effective workplace cybersecurity policies and procedures is also critical to reduce potential exposures and mitigate costly cyber incidents. For further industry-specific guidance and insurance solutions, contact us today.