Navigating Cybersecurity Challenges in the Construction Industry

The construction industry is adopting advanced technology such as artificial intelligence, the Internet of Things (IoT), and Building Information Modeling software. These innovations help to automate tasks and reduce waste. However, this shift also brings significant cybersecurity risks. As construction companies increasingly rely on digital tools and store large amounts of sensitive data, they become attractive targets. As a result, construction businesses must take action to protect sensitive information from data breaches and other cybersecurity incidents.

This article discusses why cybercriminals target the construction industry, examples of common types of cyberattacks, and cybersecurity best practices. It also examines the role of cyber insurance in mitigating cyber risks.

Why Cybercriminals Target the Construction Industry

There are several reasons why the construction industry is an appealing target for cybercriminals, including:

• High-value transactions—Construction projects often involve significant financial transactions, making them attractive targets for ransomware, phishing attacks, and financial fraud. The high value of these transactions incentivizes cybercriminals to attempt fraudulent payments or extortion.
• An abundance of sensitive data—Construction companies manage sensitive data like blueprints, architectural designs, bids, contracts, and employee and client information. This data is valuable to cybercriminals, who can exploit it for financial gain through data breaches or sell it on the dark web.
• Complex supply chains—With multiple stakeholders and subcontractors involved in construction industry supply chains, the odds of network vulnerabilities increase. Malicious actors may target these weak links in the supply chain.
• Outdated cybersecurity measures—Many construction firms rely on outdated software that does not protect against modern cyberthreats. These weaknesses are attractive to hackers, who seek out older, exploitable systems with known vulnerabilities.
• Increasing adoption of digital technologies—The digital attack surface has expanded with the construction industry’s increasing use of digital technologies (e.g., IoT, remote project management, cloud storage). Although improving efficiency, these technologies have created more chances for malicious actors to infiltrate networks, especially if cybersecurity practices aren’t keeping pace.

Common Cyberattacks and Their Purposes

There are many types of cyberattacks. The construction industry commonly experiences the following:

• Ransomware attacks occur when cybercriminals access a computer system, encrypt the files, and demand payment in exchange for a decryption key. This attack is effective against construction companies because projects often have strict deadlines. This makes business interruptions costly and prompts targets to pay the ransom quickly to avoid further losses.
• Phishing attacks involve malicious actors tricking users into providing sensitive information (e.g., passwords) through fraudulent emails, texts, calls, websites, or links. Construction firms often employ temporary staff and subcontractors who may not be familiar with a company’s internal communications. This makes phishing attacks especially effective, as cybercriminals can exploit this unfamiliarity and trick targets into revealing sensitive information or clicking on malicious links.
• Business email compromise (BEC) occurs when a malicious actor impersonates a legitimate individual (e.g., a CEO or in-house counsel) or hacks into that person’s email account and fraudulently requests money or sensitive information. BEC scams target construction companies because large amounts of money and sensitive data often move between project stakeholders, so these requests may not raise a red flag and can go unnoticed.
• Supply chain attacks happen when a cybercriminal infiltrates a business’s supply chain. Construction companies often rely on multiple subcontractors and third-party vendors, which increases the potential for cybercriminals to target less secure partners. Once a third-party vendor’s system is breached, attackers can gain entry into the main company’s network, compromising sensitive data.
• Distributed denial-of-service (DDoS) attacks are when cybercriminals overload a business’s network with traffic, disrupting standard operations or causing a network outage, leading to costly project delays. The cybercriminals can then leverage the interruption to extort a ransom from construction companies in exchange for ending the DDoS attack.

Cybersecurity Best Practices for the Construction Industry

Although cyberthreats are numerous and evolving, there are several measures construction businesses can take to safeguard systems:

• Employee training and awareness programs allow employees to educate their workers on cyberthreats. They also allow discussion on combating cyber risks by following the organization’s cybersecurity policies and procedures.
• Multifactor authentication adds additional protection through authenticators, like one-time passcodes or time-sensitive links, when a user logs in.
• Regular software updates and patch management best position software programs to defend against the latest cyberthreats.
• Network segmentation divides a network into smaller parts. That way, if it is infiltrated, there will be security barriers to prevent lateral movement across the network.
• Access controls limit who can view or access sensitive information and the situations when they may do so.
• Data encryption transforms data into an unreadable, encoded format so malicious actors cannot decipher it without the correct key.
• Data backup and recovery systems allow businesses to quickly recuperate after cyberattacks because their data is stored in another place (e.g., external hard drives or a cloud) and can be quickly reloaded onto systems to minimize downtime.
• Vendor and supply chain management ensures companies select and work with vendors with strong cybersecurity practices. By carefully vetting partners, construction companies can reduce the risk of supply chain attacks.
• Incident response planning and testing allow construction firms to proactively build their cyber defenses. Having policies and procedures to respond to cyberattacks and test their systems can help find and repair weaknesses.

The Role of Cyber Insurance in Mitigating Risk

Even with a robust cybersecurity defense, no system is immune to attacks. Cyber insurance helps mitigate exposure to cyber-related losses, filling gaps that may be left over from other policies (e.g., commercial property insurance, general liability insurance, etc.). These typically do not cover cyber-related events. Cyber insurance is specifically designed to cover financial losses that result from cybersecurity incidents. These include data breaches, business interruption, and ransomware attacks.

Many cyber insurance policies provide access to a vendor panel that includes legal counsel, public relations firms, IT specialists, and other experts who are experienced in managing cyber incidents. This can help businesses respond quickly and effectively to mitigate the impact of a cyberattack on operations, reputation, and finances. Since cyber insurance policies vary, it is advisable to consult a licensed insurance professional for assistance. You can then select a policy that best suits a construction business’s needs.

Conclusion

Cyberattacks are a serious threat to the construction industry. Cybercriminals can utilize many methods to steal data or disrupt computer networks for financial gain. Strong cybersecurity practices with the proper cyber insurance policy are essential to address this risk. By being proactive, businesses can mitigate this exposure and safeguard their finances and reputations.

Contact us today for more information.