L EG AL ISSUE S SPO T L IGHT


Building A Digital Defense:Why Owners and Contractors Need Cybercrime Insurance Now More Than Ever


BY JAY HOUGHTON, SEYFARTH SHAW LLP I


n the construction industry, risk management is second nature. Owners and contractors adeptly


navigate project risks such as delays, construction defects, and jobsite injuries. However, cybercrime has emerged as an omnipresent risk because the industry now depends on digital tools to build projects.


While many contractors still view


cyberattacks as a remote threat, the re- ality is that digital vulnerabilities can be exploited to halt operations just as quickly as a catastrophic workplace injury. In short, cybercrime is no longer a remote risk; it is a current risk that owners and


20


CALIFORNIA CONSTRUCTOR MAY/JUNE 2026


contractors must factor into their business operations. For construction professionals, cyber


insurance has become an essential part of contemporary risk management, on par with general liability (CGL), work- ers’ compensation, and builders’ risk insurance. Tose who act proactively to address this growing threat will safeguard their profits, cash flow, operational con- tinuity, and reputation in an increasingly digital world.


Why Owners and Construction Companies Are Prime Targets Te construction industry has become


a lucrative target for cybercriminals, and the reasons are clear. Owners and contractors operate in a fast-paced en- vironment, processing large payments under tight deadlines. Tey often rely on email and digital platforms to coordinate with each other and design professionals, subcontractors, and vendors. Tese conditions create ideal oppor- tunities for cyberattacks, particularly social engineering schemes such as wire fraud phishing. Te increasing digitalization of the


jobsite has also expanded project par- ticipants’ cyber vulnerabilities. Cloud- based project management tools, digital


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32