Construction Industry: A New Cybercrime Target Amidst Booming Economy

The thriving construction industry, fueled by significant public and private investments, has inadvertently become a prime target for cybercrime. With the influx of funds from the Infrastructure Investment and Jobs Act of 2021, coupled with substantial private project investments, cybercriminals see a new opportunity. This threat is not just hypothetical; large construction firms in France and Canada have already experienced debilitating cyberattacks.

This surge in cybercrime raises questions about the applicability of force majeure in contracts. California courts have clarified that economic hardships, such as those arising from cyberattacks, do not qualify as force majeure, holding businesses liable for contractual obligations despite such hardships.

The construction industry’s vulnerability to cyberattacks is exacerbated by a lack of robust cybersecurity measures. The 2023 Verizon Data Breach Investigations Report indicates a worrying trend in cyber threats, with ransomware costs doubling and human error being a significant factor.

A Texas case study offers insights into the legal ramifications of cyberattacks in commercial transactions. The case, Prosper Florida, Inc. v. Spicy World of USA, Inc., highlights the allocation of loss risk and emphasizes the importance of fault-based principles in cybercrime cases.

Given these risks, the construction sector must proactively address cyber threats. This includes purchasing cyber insurance, developing skilled teams, understanding digital risks, and maintaining strong cyber policies. Regular training, expert consultations, and in-person meetings with all stakeholders are crucial steps in building a robust defense against cyber threats. The industry must recognize that every participant, from contractors to suppliers, plays a role in cybersecurity.