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By: Barry Brownstein
Increasingly sophisticated hackers have targeted personal and business data held by companies like Target Corp., Sony Corp., Equifax Inc. and Yahoo Inc. during the past decade. The construction industry is just as susceptible to these risks as any other industry. As construction projects increase in size and there is more sharing of data related to buildings and projects, and as more of that sharing becomes electronic, cyberrisks increase as well.
Contractors and their business partners hold personal information about their clients and employees, and they are increasingly using more electronic means to exchange data and survey construction projects. A significant threat for companies in the construction industry comes from the open and increasingly connected network between those in charge of a project and their various subcontractors and business partners, who need swift and seamless access to plans and other sensitive data to do their part of the work.
Many companies in the construction industry assume that since they have policies that cover losses stemming from physical and property damage, any infiltration into their systems that result in the loss of access to sensitive information is covered by such insurance. However, most commercial general liability policies carve out cyberthreats from coverage. While contractors can still make claims under more traditional policies and may find that some of their losses are covered, relying solely on these protections may be dangerous and result in uncovered losses.
Specialized cyberinsurance can fill in the gaps left by commercial general liability policies that do not account for losses caused by damage to virtual information systems, and ensure that any damages, injuries or delay caused by downstream contractors or business partners are covered as well. Once policies are in place, contractors need to revisit them regularly to account for changes in the cyberthreat landscape as they relate to the construction industry.
If you have any questions or would like more information, please contact Barry Brownstein at [email protected].