Businesses spanning every sector are having to contend with a rapidly increasing volume of online threats. Corporations in the construction industry are a particularly attractive target for cybercriminals. It is common for them to have multiple problems maintaining effective firewalls and defenses, and deficiencies restricting access to sensitive data compound the problem. As you’re assessing your business’ biggest risk factors and developing a comprehensive plan to mitigate exposure, consider these important cybersecurity issues affecting the construction industry.
1. Ransomware Threats
In managing projects, companies typically make use of construction file sharing platforms to store, transmit, and revise project documents. Centralizing documents offers a convenient way for multiple project participants to access the information that they need to collaborate effectively. It also enables project managers to review real-time information about staffing, materials, and expenditures.
If a file sharing system is compromised by a ransomware attack, it can bring work to a screeching halt. Without access to building plans, contractors won’t have the information that they need to carry out work. Delays can represent a formidable expense as well as a myriad of logistical problems that could make the ramifications of a setback even more challenging to address.
The threat of permanently losing data is a major concern for construction companies and their clients. Creating plans for a project tends to be enormously time-consuming and requires input from multiple parties such as engineers and architects. If plans are irretrievably lost, there may not be any way to attempt to recreate them without redoing some or perhaps all of the work that went into making them.
Because the consequences of a cyber attack are so egregious, hackers know that they’ll have companies over a barrel if they manage to infiltrate their systems and hold that data hostage. Companies may see no choice but to acquiesce to extortion.
To prevent this from happening, it is crucial that companies use secure file-sharing platforms with built-in defensives to deter unauthorized access. It is advisable to assign unique login information to each user rather than allowing several people within a company to share a login. Passwords should contain a case-sensitive combination of letters, numbers, and symbols.
2. Fraud Risks
After a contractor submits a payment requisition and the client’s project manager is ready to sign off, fund transfers have to happen quickly. In large projects, each phase of work can be extremely costly. Contractors need to receive funds promptly in order to be able to pay workers, subcontractors, and vendors. Per standard provisions in agreements, they typically need payment in full before forging ahead with the next phase of completion.
Wire transfers are generally the fastest way to route tens or hundreds of thousands of dollars to a company. A fraudulent request for funds might appear just like any other payment requisition, and the sender may fail to notice when something is amiss with account numbers.
Conversely, construction companies could also receive fraudulent transfer requests from subcontractors or equipment suppliers. In these instances, the sending party may believe that they are tendering payment to the appropriate party when they’re actually transferring funds under false pretenses.
When companies’ project information is exposed, they’re especially susceptible to this type of cyber threat. Hackers will know who they should contact for funds and what information they should include in a communication to make it appear legitimate.
Securing email accounts with strong passwords and safeguarding networking infrastructure with firewalls can help to prevent fraudulent wire requests. In addition, it is a good practice to require multiple signatories to approve payment requests over a certain amount.
3. Liability Concerns
If a contracting company is the victim of a cyber-attack, its information isn’t the only commodity up for grabs for cybercriminals. Businesses’ clients’ financial data may be compromised, making them vulnerable to identity theft and other forms of fraud.
The same is true of other parties with which a contracting company has an agency relationship. Subcontractors and suppliers can be at risk. ‘
All of the personal information of the workers that a company employs could be a valuable asset to a cyber-criminal. Social security numbers and other identifying information such as a person’s date of birth or home address could arm a hacker with all of the materials that they’d need to perpetrate a data theft.
In these types of scenarios, a construction company could face massive liability from a data breach. The financial repercussions and harm to a company’s reputation can be catastrophic.
Cyber liability insurance coverage can equip businesses in the construction industry to withstand the fallout from a breach. In addition to covering direct losses, policy proceeds can help to address liability claims and spare companies from insurmountable financial hardship.