Does your contractors errors and omissions (E&O) policy cover technology exposures?
In recent years the construction industry has been strengthened by an influx of technology tools. This is helping to counter trends sweeping the globe, from labor shortages and material scarcity to the need for efficiency, by empowering today’s contractors to increasingly do more with less.
But while effective in helping contractors stay ahead of new trends, new technologies also introduce new risks to the workplace. Malfunctioning robots can damage property or injure workers. Errors in 3-D printed building components can result in catastrophic failures. Computer systems are vulnerable to pervasive cyber risk.
In this threat landscape, it’s vital for contractors to secure an E&O policy that includes technology and cyber cover. Here are three reasons why.
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Responding to E&O risk
The reliance on technology like building information modelling (BIM), drones and AI-powered tools can leave contractors exposed to potential errors, including software glitches, misinterpretations or algorithmic biases.
Without the right cover in place, these errors can result in complex, lengthy E&O claims that are a drain on time and resources.
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Intellectual property (IP) infringement
Using unlicensed software or infringing on design patents through a new technology can result in legal action being brought against you. In this age of AI, copyrighted designs are being readily replicated; one factor behind the surge in infringement claims we’re seeing today.
If the policy wording includes IP cover—something that’s frequently missing—then your E&O policy can cover the legal fees for defending claims, including potential settlements.
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Cyber security: a shield against rising threats
Every modern business comes with a cyber exposure, and contractors using technology are no different. Cyber attacks can not only result in downtime for the technology tool and grind operations to a halt, but they can lead to data breaches which are particularly disruptive and difficult to recover from. Imagine you lost access to building plans or that employee information was stolen. The associated costs are often significant, including direct financial losses, reputational damage and potential lawsuits.
Regular E&O policies are not broad enough to cover the costs associated with data breaches and regulatory compliance violations. But that doesn’t mean you need to take out multiple policies.
Protecting contractors against technology risk
With contractors increasingly reliant on technology, their multitude of construction E&O exposures are being added to by the threat of technology and cyber risk. Rather than get caught cold, it’s time to face these risks head on—and give contractors the protection and the confidence to thrive.
Look for an E&O insurance policy that combines E&O, technology errors, cyber and cybercrime coverage under a single package form. At CFC we remove complexity from the process, making it simple for contractors to get the cover they need.
Find out which five trends are re-shaping the risk landscape for contractors.
