10 Reasons Why Architects and Engineers Need Cyber Liability Insurance

by Annie

Cyber liability insurance is essential for engineers, contractors, and architects. Here are ten compelling reasons why they should acquire it immediately.

Privacy Laws

Numerous state privacy laws, along with federal and District of Columbia legislation, mandate the immediate reporting of any loss, theft, or unauthorized disclosure of personally identifiable information (PII) that is not encrypted. Cyber coverage includes the costs of forensic investigation, legal support for notification determination and letter drafting, and breach response services such as notification and credit monitoring. Cyber insurance covers expenses that are not included in traditional insurance policies, like general liability, crime, or architects’ or contractors’ errors and omissions (E&O) coverage.

Fines and Penalties

Non-compliance with privacy regulations can result in significant fines or penalties imposed by state or federal authorities. While E&O policies do not cover the defence or payment of regulatory fines, cyber insurance does.

PCI Compliance

If a design or construction company violates the Payment Card Industry Data Security Standards (PCI-DSS) during a breach, it may be held liable under Merchant Services Agreements. Cyber insurance can provide coverage for the costs associated with forensic investigations, credit card re-issuance, reimbursement of fraud losses, and fines or penalties imposed by PCI. E&O policies do not typically cover these contractual damages.

Data Destruction

Electronic data, including customer lists and computer-aided design files, can be destroyed or damaged by hackers or malicious insiders. Cyber insurance for engineers covers the costs of restoring or recreating these critical resources.

Startup Protection

Cyberattacks have the potential to disable or shut down a construction professional’s computer network, leading to operational disruptions and revenue loss. Cyber insurance can cover the profit loss incurred during network downtime and repair.


In cases of ransomware attacks, hackers may threaten to steal or leak data, encrypt the organization’s network, or cause other damage. Cyber insurance can cover the cost of ransom payments to remove the threat.

Compliance with Contracts and Regulations

Increasingly, banks, government entities, and clients require professional firms, including architects, engineers, and contractors, to have cyber liability insurance. Cyber coverage satisfies this contractual obligation.

Protection of Business Information

Design and construction companies handle sensitive corporate data regularly. A cyber policy can defend the company against lawsuits alleging failure to maintain the confidentiality of this information, whether in paper or electronic form.

Reputation Management

A design or construction company’s local reputation is a valuable asset. In the event of a data breach becoming public, public relations professionals can help preserve the company’s brand reputation, and their services can be covered by cyber insurance.

Business Partners, Vendors, and Storage Suppliers

Design and construction organizations often share or entrust their data to business partners, vendors, and storage providers. Regardless of who committed the breach or where the compromised data was located, cyber coverage provides protection and meets the requirements of privacy regulations.

By understanding and addressing these ten arguments, architects and engineers can recognize the importance of purchasing cyber liability insurance to safeguard their businesses from the evolving cyber threats they face.

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