The construction industry is no stranger to insuring its projects against the risks of physical and natural disasters. Policies purchased to cover these risks, however, often are not broad enough to reach cyber threats, which can be just as damaging and costly as a physical disaster. During the past decade, hacks have targeted the data held by several high profile companies, including Target Corp., Sony Corp., Equifax Inc. and Yahoo Inc. So far, the construction industry has not yet been at the center of one of these attacks. Still, builders are no less susceptible to these risks than any other industry, especially given that these companies often possess sensitive data related to buildings and projects.
Insurance-giant American International Group (AIG) announced that it will be the first insurer to offer standalone primary coverage for property damage, bodily injury, business interruption, and product liability that result from cyberattacks and other cyber-related risks. According to AIG, “Cyber is a peril [that] can no longer be considered a risk covered by traditional network security insurance product[s].” The new AIG product, known as CyberEdge Plus, is intended to offer broader and clearer coverage for harms that had previously raised issues with insurers over the scope of available coverage. AIG explains its new coverage as follow:
AIG is offering its new coverage with limits of up to $100 million. The new coverage should be considered by policyholders looking to further mitigate their potential cyber exposure. It is important for policyholders to be aware, however, that the new AIG product, like any new insurance product, is yet to be tested in the courts, and challenges as to the scope of its coverage as well as the scope of its conditions and limitations are certain to follow. It is important, therefore, that policyholders continue to seek the advice of experienced coverage lawyers when considering this or any new insurance product.