5 Reasons Why Contractors Need Cyber Liability Insurance

Contractors often regard their businesses as safely “off-line”. If you don’t process credit cards or operate large, complex IT infrastructure, what exactly do you need to protect? Are the risks really that high?

In fact, industries that let their guard down because they feel safe are among the most common targets for criminals. That’s because cybercrime is often more about your people than the amount of tech you operate. Wherever money or data is changing hands there is an opportunity for criminals.

In the construction industry, with distributed employees, intensive supply procurement, and payments to subcontractors, there are plenty of openings for a cybercriminal to wreak havoc on your business. It’s no wonder 75% of respondents to a survey of construction, engineering & infrastructure firms reported they had experienced a cyber incident in the last year.

Contractors need a cyber insurance policy with broad first- and third-party coverages for the risks from cyber crimes and negligence. With a cyber policy, you’ll be covered for costs involved in dealing with, and recovering from, the most common and the most costly cyber incidents. 

Five Reasons Contractors Need Cyber Liability Coverage

1- Social Engineering & Crime Coverage

Successful phishing attacks from cybercriminals may lead to an unauthorized change in a contractor’s bank account information which may result in a fraudulent direct deposit into the perpetrator’s account. The loss of funds held in escrow, tangible property, or personal funds of the control group are among the other cybercrime exposures faced by contractors wiring large sums of money.

2 – Extortion

Criminals can demand ransom, threatening to disclose stolen data, encrypt key documents on a company’s network, or find other ways to cripple a contractor’s business operations through digital mischief if they are not paid. Cyber coverage helps pay for the cost of the ransom to end the threat or unencrypt data. 

3- Corporate Information

Even if you’re not processing credit cards or warehousing data yourself, you likely have a great deal of corporate information about your business and your clients. This coverage protects against losses due to legal action by clients or third parties when confidential data is stolen, whether in the form of data or hard copy documents.

4- Shutdown

You’re familiar with the fallout from work stoppages. If your teams must stop work due to an attack on your network, the loss of profits can be covered by your cyber policy. 

5- Data Destruction

When criminals or your employees damage or destroy electronic data such as digital documents and contracts or customer information, your cyber policy will pay the cost of restoration or recreation of the data.

Cyber Claims Scenario

In the high-profile breach of Target Corp. in 2013, hackers gained access to Target’s system through an employee of an HVAC contractor doing work for Target. The breach impacted over 100 million individual records and cost Target a reported $150 million. See “Anatomy of the Target Data Breach,” M. Kassner, ZDNet, Feb. 2. 2015.

Why The Bunker?

At The Bunker, we’ve partnered up with the leaders in Cyber Liability Insurance in order to best serve our customers. With just a few details of your business we can provide you with a Dynamic Loss Prevention report that goes over eight types of risk exposures that your business is facing, and we provide you with the solutions to fix these exposures. Give us a call today, and we can run a complimentary Dynamic Loss Prevention report for your business! Call us at 954-239-7346. 

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