Josh M. Leavitt, a principal and co-chair of the construction law practice at Chicago-based law firm Much Shelist, said in a recent report that construction firms stand to benefit more from a standalone technology and cyber insurance policies.
“While some limited endorsements are now available on professional liability and commercial general liability policies, brokers advise that standalone cyber and technology policies offer the broadest and most efficient coverage,” he observed.
Additionally, Gregg Bundschuh, a broker at
Greyling Insurance Brokerage, a division of Epic, who specializes in construction sector coverage, noted that “Cyber claims are more complex than traditional risks. They are more international in scope and can have multiple consequences, leading to not only first-party losses, but third-party liability and government actions and fines.”
Further, Leavitt explained that command responsibility for cyber risk management should be well determined. It could be assigned to an appropriate individual on each project, or they could hire an independent security consultant. Still, some could relegate the task to construction managers, contractors, design professionals, or design builders. “In turn, these parties may choose to delegate those responsibilities to specialty security consultants or subcontractors,” he said.
Customized provisions should likewise cover scheduling and force majeure provisions to address who will bear the risk of delays and disruptions caused by hacking, theft, or corrupted data; and cost of work provisions, Leavitt concluded.
