Cyber Liability Insurance

A mechanical contractor in Los Angeles opened an email attachment that looked like a subcontractor invoice. It was ransomware. Within hours, every computer on their network was encrypted. Project files, accounting records, customer data, employee information all locked. The attackers demanded $75,000 in cryptocurrency. The contractor called their IT consultant, then their insurance agent. Their cyber liability policy covered the ransom negotiation, the payment, the forensic investigation, the system restoration, and the downtime losses. Total claim exceeded $140,000. The contractor paid a $5,000 deductible.

Construction companies have become attractive targets for cybercriminals. Contractors handle employee Social Security numbers, customer financial information, project specifications worth competitive intelligence, and enough cash flow to pay meaningful ransoms. Many construction companies have limited IT security. Attackers know this.

Ransomware attacks on construction have increased dramatically over the past several years. Criminals understand that contractors cannot afford extended downtime. Projects have deadlines. Subcontractors expect scheduling. Clients expect progress. The pressure to pay and restore operations quickly makes construction companies more likely to pay ransoms than businesses that can function without their systems.

Cyber liability insurance covers the financial fallout from cyber incidents. First-party coverage handles your costs including forensic investigation, system restoration, ransom payments where legal, business interruption, and notification expenses. Third-party coverage handles liability when customer or employee data is compromised. Response services provide access to incident response teams, legal counsel, and public relations support.