As a construction business owner, you might assume that your company is immune to cybersecurity risks. After all, only a small percentage of your employees sit behind a computer all day. Plus, compared to companies in the finance and healthcare sectors, you store very little sensitive information on your network. Cybercriminals have bigger businesses to go after, right?
In reality, the construction industry’s assumption of safety makes it a prime target for cyberattacks. Criminals don’t care how much personal information you store—if they see an opportunity, they take it. It’s time to put cybersecurity at the top of your construction company’s priority list.
Keep reading to learn about your risks and how cyber liability insurance from InSource can help you prepare for the worst.
Cyber Risks in the Construction Industry
Long gone are the days of paper invoices and physical project files. Today, most construction companies manage bids, projects, and payments digitally. Digitization increases efficiency and makes your job easier, but it also makes you more vulnerable to cyber risks. Some of the most common threats in the construction industry are ransomware attacks, email fraud, and data breaches.
Ransomware Attacks
Ransomware attacks are common across industries, but they’ve become a pressing concern for construction companies in the past few years. In early 2020, large construction companies in Canada and France fell victim to ransomware attacks after cybercriminals penetrated their networks, encrypted their data, and demanded millions in exchange for a decryption key.
Ransomware attacks can be financially devastating even if you don’t pay the requested ransom amount. When you can’t access your data, you can’t perform critical aspects of your job. Each hour of downtime can lead to thousands of dollars in lost revenue. You may have to pay penalties for failing to complete your project on schedule, and you risk losing future projects after word gets out about your ransomware attack.
Email Fraud
Construction projects are complicated. You might hire a subcontractor to perform labor, and that subcontractor may hire outside workers. With so many employees and companies involved in any given project, it can be challenging to stay on top of every email and invoice in your inbox. Cybercriminals can capitalize on this chaos by posing as legitimate vendors and tricking unsuspecting employees.
Email fraud can take many forms. Your employees may end up clicking on malicious links, paying fake invoices, or sending private information to criminals pretending to be legitimate employees.
Data Breaches
Many construction companies store proposals, blueprints, project plans, and client data on their network. Without proper security, that sensitive information is vulnerable to theft. Losing client information can result in expensive lawsuits and devastating reputational damage, and losing bid information can cost you your next job.
How To Prepare for Cybersecurity Events
Even minor cybersecurity events can cause severe damage to your company. However, you can minimize your risks and protect your company from financial loss by taking these steps.
Implement a Cybercrime Recovery and Prevention Plan
Although there’s no foolproof way to prevent every cyberattack, you can reduce your risk significantly by putting a cybersecurity plan in place. With a few key steps, you can make it far harder for cybercriminals to access your network. These steps include:
- Putting an IT expert in charge of your network: Whether you choose to manage your IT infrastructure in-house or outsource to a managed services provider, you need a systems administrator. These security professionals oversee your technology, manage account access, and install firewalls that block suspicious traffic from entering your network.
- Limiting access to sensitive data: Only authorized users should have access to your critical data and applications. By restricting access, you can keep private information out of the wrong hands.
- Educating your employees: Knowledgeable employees are better at identifying suspicious emails, invoices, and links than employees with limited training. If you want to minimize cybersecurity events, you should require that each employee completes a risk awareness course.
- Creating a procedure for payments and wire transfers: By making a list of approved wire transfer destinations and creating steps for verifying invoices, you can prevent employees from sending money to fraudulent sources.
- Developing an incident response plan: When a cybersecurity event occurs, it’s crucial to minimize the damage as quickly as possible. Incident response plans give you and your employees clear and actionable instructions for managing cyberattacks.
Purchase Cyber Liability Insurance
Most construction company owners know they need general liability insurance, property insurance, workers’ compensation, and builders’ risk coverage to protect their financial future. However, many don’t realize that cyber liability insurance is also an essential coverage. As of 2020, 45% of businesses did not have a cyber insurance policy, leaving them vulnerable to millions of dollars in financial loss.
Cyber liability insurance covers legal fees and expenses if a client sues your company following a data loss event. Additionally, it covers costs related to notifying customers about a breach, restoring lost data, helping victims of identity theft rebuild their credit history, and repairing compromised computer systems. Some insurance companies also pay for credit monitoring services following a data loss event.
Cyberattacks cost an average of $200,000, which is enough to close many small businesses permanently. Cyber insurance protects your business against irreversible financial damage and helps you get back on your feet after an attack.
InSource Is Your Cyber Liability Insurance Partner
Cyberattacks may not have been a concern for businesses 20 years ago, but things are different today. Cybercriminals have noticed that construction companies are years behind when it comes to data security, and they’re taking advantage of the opportunity to steal information. Luckily, you can protect your data and your business from costly attacks by investing in cybersecurity and purchasing a cyber insurance policy.
At InSource Insurance Group, we use our long-term relationships with renowned insurance companies to provide affordable, comprehensive business insurance for companies in the construction industry. Our insurance experts can assess your unique cybersecurity risks and find the cyber liability coverage that will keep your business and your bank account safe.
Get in touch with us today to learn more about our cyber liability coverage for construction businesses.
