As construction companies increasingly invest in technology, it is important to be aware of cyber risks, according to www.enr.com. The risk of cybercrime increases in frequency and severity as interconnectivity of devices, digitization and the adoption of other technologies rise.
A recent Kroll Survey reports more than 93 percent of responding construction companies have experienced a cyber incident—a 16 percent increase from the previous year. The most common incidents were viruses, email phishing, data breaches and wire-transfer fraud. Additionally, industry competitors were the source of 23 percent of the incidents.
Cyber incidents often are accidental but also can arise from malicious intent and be perpetrated by random criminals, competitors or rogue employees. The target typically is the theft or deletion of data or disruption of systems.
A cyber breach can result in various first- and third-party effects for a contractor, including immediate costs incurred when responding to a cyber breach; loss of revenue; liability; and reputation damage. Regulators are requiring organizations and companies to take more responsibility regarding cybersecurity and can allow authorities to penalize companies with inadequate data management and breach-response protocols. Only 30 percent of organizations reportedly have prepared cyber response plans.
In response, companies are helping firms understand their cyber-risk exposures, and cyber policies are being tailored to cyber exposures in various industries—including the construction industry. Principal coverages include coverage for response costs related to a cyber event, such as delay costs and extra expense.