In a recent Travelers Insurance Group construction industry survey, participants ranked cyber threats as their top concern for the fourth time in six years. Despite these concerns, contractors still lag behind when it comes to either purchasing Cyber Insurance or being proactive in fighting Cyber incidents. Despite 80% of respondents believing that having proper cybersecurity controls in place is critical:
- 56% do not have an incident response plan.
- 50% lack cyber insurance ( one of the least inexpensive policies in your portfolio)
- 45% do not use multifactor authentication for remote access.
- 70% do not use endpoint detection and response tools
- 70% do not have a post-breach team
With the use of connected devices, digital project management tools, and cloud-based systems, construction companies are more vulnerable than ever to cyberattacks. Cyber insurance provides a safety net, helping construction firms recover from incidents like data breaches, ransomware attacks, Cyber Crimes and system failures.
Why Construction Companies are at Risk
Construction used to be a low-tech industry, but it is increasingly reliant on digital tools. In most cases the losses start with a simple Phishing scheme where someone opens or responds to an email from someone they thought they knew. It used to be something of an urban myth but now these emails are so common its hard to find someone who hasn’t received one of these bogus emails. Here are some key ways construction companies become targets for cyberattacks:
- Project Delays and Ransomware: Hackers can lock down your project management systems, demanding payment to restore access. This can result in costly delays.
- Connected Job Sites: Internet-connected devices and software systems used on job sites create multiple entry points for cybercriminals.
- Third-Party Risks: Construction firms often work with subcontractors and suppliers, meaning your systems could be affected by their vulnerabilities too.
- Digital invoicing and payments leave the construction industry susceptible not only to direct financial loss but also delays in the supply chain.
Benefits of Cyber Insurance for the Construction Industry and What to Look for in a Cyber Policy
When selecting cyber insurance, it’s essential to find coverage that aligns with the specific risks of the construction industry. Here are a few things to keep in mind:
- First-Party and Third-Party Coverage – First-party coverage applies to losses your company directly incurs such as damage to your systems and bank accounts, while third-party coverage helps if your clients or partners are affected as a result of your computer system operations.
- Ransomware and Extortion Protection – Look for policies that address ransomware attacks specifically, as they are one of the biggest threats today.
- Cyber Crime and Fraud coverage helps protect construction firms from the growing risk of Wire Transfer Fraud, Telephone Fraud and Social engineering and much more.
- Business Interruption Coverage – If a cyberattack disrupts your operations or a supply chain partner and delays projects, cyber insurance can compensate for lost income and increased operating expenses, such as overtime pay or rescheduling costs.
- 24/7 access to Breach Response Services – response teams that can manage the aftermath of a breach, including IT forensics and public relations.
Conclusion: A Smart Investment in Uncertain Times
As the construction industry becomes more digital, the risks of cyberattacks are rising. A single incident could lead to project delays, legal troubles, and financial losses that could take months or even years to recover from. Cyber insurance provides peace of mind, helping businesses manage the fallout from cyber incidents with minimal disruption.
By investing in cyber insurance, construction companies can protect their operations, finances, and reputation.
For more information, download our Cyber Security Planning Guide.
