A major insurer has a warning for your clients in the construction industry against emerging privacy and network security exposures as contractors are now incorporating digital technologies into their businesses.
Chubb has released the advisory, "New Business Models, Technology Raise Professional Liability Risks for Contractors” which explores new technologies that are being embraced throughout the construction industry.
The advisory said contractors face cyber exposures arising from modelling software and from the proprietary and confidential data they use or store, ranging from construction plans to customer data and personal information.
“Historically, contractors' risk has primarily been limited to standard commercial general liability, auto liability, workers compensation and builders' risk. Today, the risks are becoming more pervasive as contractors take on more aspects of project design,” said Diana Eichfeld, Chubb Environmental assistant vice president.
"Today, the risks are becoming more pervasive as contractors take on more aspects of project design. Sophisticated software tools are playing a greater role in daily operations as contractors handle and store a wider range of confidential and personal information – from valuable building plans to financial and employee data.”
The Chubb advisory cited one key technology that continues to gain ground, the building information modelling (BIM) software which presents a sophisticated three-dimensional representation of a project.
“For owners and general contractors, the software offers a means to deliver projects with reduced claims and costs… Despite the capabilities of such systems, design errors can still occur, opening up a contractor to professional liability claims,” the advisory said.
The insurer said electronic systems like the BIM software pose a cyber risk since they contain building plans and project files.
“Hackers have reportedly shown interest in building designs in recent years, and sophisticated malware that targets computer-aided design programs has been identified,” Chubb said.
The advisory also warned against serious security breaches that may involve new onsite mobile technologies that contractors use, including tablets and smart phones.
Contractors should also be aware of the risks in the use of cloud-based computer storage, software and services.
According to the Chubb advisory, these risks include contracts that favor the cloud service provider, data security, loss of control over data transferred to the cloud, network outages and regulatory compliance issues.
