Workplace challenges are nothing new for design, build, general and artisan contractors. Global trends from overcoming labor shortages to integrating new technologies are rapidly changing the risk landscape—and making E&O disputes more common and costly.
But no contractor has to make or face a claim alone. With the right insurance cover, they can continue to operate with confidence and thrive no matter what’s round the corner.
To see how E&O insurance acts as a safety net when the worst happens, here are two claims case studies where the policy stepped in to mitigate growing cyber and technology risk.
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Cyber risk: Ransomware disrupts operations at the click of a button
A general contractor relying on computer systems to store files and conduct payments opened the door to a cybercriminal when they clicked on a malicious link in a phishing email. After gaining access to the contractor’s systems, the cybercriminal deployed ransomware, encrypting files, paralyzing systems and making data inaccessible. The cybercriminal left a ransom note demanding a significant sum in return for the decryption key.
Fortunately, the contractor had taken out cybercrime cover in their E&O policy with CFC. The contractor first notified us of the attack using our instant communication channel, Response. We then mobilized our incident response team who assessed the attack, mitigated it’s impact and recovered some of the data files.
With cyber coverage, our policy includes:
- Proactive prevention and incident response: We have the largest in-house cyber security and claims team in market, expert in helping to stop cyber attacks before they happen and minimize impact when they do occur.
- Identifying the source and scope of the cyber event: Containing or removing the malware, and dealing with privacy breach notification obligations.
- Negotiation with cybercriminals: If paying the ransom is necessary, we use information on the threat group to conduct ransom negotiations and get the best price possible.
- Costs of forensic investigation: Our experts will deduce the root cause of the issue and help to ensure it isn’t repeated.
- Data recovery and recreation: Data is now a vital business asset. We help to recover data from backups, and can recreate that data if its deemed unrecoverable.
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Technology risk: Platform or user error?
A general contractor uses a construction software platform, as it helps them to improve connectivity, project management, data collection and keep key processes all in one centralized place.
The program stored all design drawings (prepared by third-party architects and engineers) for a particular building construction project, with drawings recalled for use at various stages of the project. However, the building inspector at the end of the project highlighted several areas where the building failed to meet current standards and was therefore unable to sign off the project.
When investigating the issues, the general contractor realized that as a result of either an issue with the platform or a user error, they had used an earlier version of a design drawing to complete the project, explaining why the errors were present.
CFC’s E&O policy stepped in as it covered:
- Associated technology services: The definition of business activities on the policy included associated technology services.
- Rectification costs: To try and mitigate the claim being brought against the policyholder, the policy covers the costs of rectification measures.
- Legal defense: If the policyholder is brought into potential lawsuits, the costs of legal representation and relevant associated costs, including expert reports and witness statements, are covered.
The benefits of comprehensive E&O cover
With E&O risk growing, the time for insurance is now.
CFC’s E&O cover is designed to give contractors comprehensive protection against new and evolving risks.
Find out how to get started with comprehensive E&O cover for contractors by getting in touch today at professions@cfc.com.
