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Insurance Essentials: What construction contractors and small businesses need in a cyber liability policy

Insurance Essentials: What construction contractors and small businesses need in a cyber liability policy


Cybercrime is a lucrative trade. More than 85 per cent of Canadian organizations experienced at least one cyber-attack in 2021, and it’s not just large organizations that are at risk. Here’s what you can do to protect your business and reputation.


There is little doubt about the need for construction contractors and small business owners to ensure cyber liability protection is part of their overall insurance policies. But it may not always be top of mind. It should be.

According to a study by Atlas VPN, cybercriminals rake in an estimated US$1.5 trillion annually. That’s three times more than what Walmart makes each year. Ransomware, phishing attacks, malware, online fraud, there are many ways hackers target organizations to steal data and money. On that note, 85.7 per cent of Canadian organizations experienced at least one cyber-attack in 2021, suggests data from the CyberEdge Group, a cybersecurity research firm.

Data points aside, it’s reasonable to suggest cybersecurity is more critical now for businesses of all sizes than before, considering Canada’s support for Ukraine in its conflict with Russia – a nation reportedly home to the world’s most notorious cybercrime groups. The tension between Canada and Russia ought to trigger business owners to put greater emphasis on cybersecurity since Canadian businesses are likely in hackers’ crosshairs.

And contrary to popular belief, it’s not just large organizations that are at risk.

According to the Insurance Bureau of Canada, nearly half of Canadian small businesses suffered a cyber-attack in 2021, costing upwards of $100,000 per incident. Yet, alarmingly, 47 per cent of smaller companies report having no budget allocation for cybersecurity.

How to mitigate your cybersecurity risks

All small business owners and independent contractors need to prioritize cybersecurity.

Here are a few things you can do to protect yourself from a cyber-attack:

  • Use unique passwords. Always use a unique password for each of your accounts, such as your email, online banking or backend data servers. Never use the same password across multiple accounts and don’t share your passwords with anyone. Also, change your passwords frequently, especially those for access to mission-critical systems whenever an employee leaves your organization.
  • Enable multi-factor authentication. Multi-factor authentication is a technology that requires two or more authentication methods to access a website or application. It helps protect against hackers by ensuring users are who they say they are.
  • Be wary of public WiFi. Refrain from logging in to secure sites or networks with your credentials on a public, unsecured WiFi connection. A hacker can steal your passwords and data that are transmitted over an unsecured network.
  • Check if your email or phone is in a data breach. Use the free website to determine if your email address or phone number was exposed in a data breach.
  • Invest in cybersecurity software. Buy antivirus, anti-malware and spyware monitoring and removal software to protect your computing systems and keep them up to date.

What to look for in a cyber liability insurance policy

Cyber liability insurance is generally designed to cover costs associated with a cyber-attack on your business’s technology systems that affects your company’s and customers’ data. Therefore, if a hacker infiltrates your network, takes over your website, steals your data and demands a ransom for its release, cyber liability insurance can help you manage the costs of restoring your systems and retrieving your data. It’s also useful to help pay for damages if there’s been a data breach – if external attackers gain unauthorized access to confidential data or if one of your employees accidentally or intentionally discloses sensitive data. Data breaches are one of the most common and costly cybersecurity incidents.

It’s your responsibility as a business owner to protect your customers’ and employees’ confidential and financial information. Any organization with a website that stores customer and employee data in the cloud or on a physical server or conducts financial transactions should have cyber liability insurance. If your business suffers a cyber-attack and your customers’ or partners’ data is compromised, you could be sued for third-party damages and the outcome of even one lawsuit may force you into bankruptcy.

Determining what types of cyber coverage you should have in your policy depends on the size of your organization or if it’s for a self-employed contractor.

A cyber policy may include coverage for:

  • Business interruption
  • Loss of earnings
  • Privacy liability
  • Third-party notification costs and credit monitoring
  • Social engineering
  • Multimedia liability
  • Technology errors and omissions
  • Legal expenses
  • Forensic investigation
  • Data loss and restoration

When purchasing cyber liability insurance, consider the following:

  • How many digital records containing personal and financial information on customers, partners and employees does your organization have?
  • What cybersecurity systems and controls do you have to reduce your risks?
  • Are your computing systems, portable media, cloud storage, and data encrypted? Do any of your third-party providers encrypt data?
  • Will the insurance company providing your cyber liability policy allow you to file a claim for damage or loss even if the cyber incident affecting your business isn’t discovered for months or years afterwards?
  • The best way to ensure you’re adequately covered is to speak with a licensed broker and discuss your concerns and how your business operates. A broker can advise you on the types of coverage you require and ensure there are no gaps in your policy that may leave you exposed.
  • All industries, including construction, are online industries nowadays. And in the digital world there are no second chances so don’t risk your livelihood by overlooking the importance of cybersecurity and cyber insurance coverage.

Aharshan Thangarasa is a licensed broker and team lead, contractors at Zensurance, Canada’s leading digital business insurance brokerage. Get a free quote for your insurance needs by visiting

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