As Australian construction companies increasingly adopt digital technologies to enhance operational efficiency and project management, they are also exposing themselves to greater cyber risks, according to Gallagher.
The brokerage giant’s cyber insurance experts are raising awareness about these risks and offering strategies for construction businesses to safeguard against potential cyber threats.
In its latest blog, Gallagher noted that construction firms are experiencing enhanced productivity, thanks to the integration of digital tools such as the Internet of Things (IoT), electronic blueprints, and client management systems. However, these technologies also increase the construction industry’s vulnerability to cyberattacks.
The Australian Construction Industry Forum identified the sector as a growing target for cybercriminals, emphasising the potential for cyber incidents to disrupt project timelines and budgets.
Meanwhile, the Australian Signals Directorate (ASD) reported a 50% rise in cyber incidents within critical infrastructure projects during the 2022-23 financial year. These incidents were primarily categorised as low-level attacks or isolated system compromises.
According to the ASD, 57% of these attacks involved compromised accounts, denial of service, or compromised infrastructure, with the average financial impact being $46,000 for small businesses, $97,200 for medium-sized enterprises, and $71,600 for larger companies.
According to Gallager, cyber threats that are relevant to the construction sector include:
Gallagher said that the sensitive nature of data managed by construction firms makes them attractive targets for cybercriminals. Projects typically involve detailed architectural plans, financial records, and personal information about workers, all of which can be exploited if not adequately protected.
Breaches can result in unauthorised access to client data, ransomware attacks, and operational disruptions.
Given the potentially severe financial impact of cyber incidents, cyber insurers and brokers are encouraged to remind construction businesses about the importance of making cyber insurance a part of their risk management strategy.
“Cyberattacks can involve significant costs and down time for construction businesses, with the potential to derail projects. Cyber insurance can help cover expenses involved and provide access to expert help, from ransom negotiation to damage control,” Gallagher said.
The brokerage emphasised a thorough approach to managing cyber risks, which includes:
These cyber risks come on the back of ongoing supply chain disruptions facing the Australian construction industry
