Recently, I wrote an article on the importance of cyber liability insurance for design professionals.  The reality, however, is that this is important insurance for all professionals in today’s day and age.  


A modern, online insurance broker called Embroker was kind enough to submit a guest post on cyber liability insurance.  Check it out!!!




By:  Charles Bohanan, Embroker 


According to the Cybersecurity Ventures Report, the cost of cybercrime could reach $6 trillion by 2021. That same report predicts that cybercrime will expand into new sectors, such as the construction industry. Assuming your construction business has moved beyond pencil and paper drawings, paper invoices and mailed checks, this prediction is cause for concern. In fact, it’s already come true, as the 2013 Target cyber breach which led to a $39 million court settlement came through a HVAC contractor, a development which underscores the need for Cyber Liability insurance.


Considering the numerous issues facing construction business owners — from budget and time constraints to production methods to fire hazards — Cyber Liability insurance may seem like a low priority. But f you expect to stay in business and be profitable, that’s simply not the case.


Why Cybercriminals target construction businesses


The cybersecurity systems of small and mid-sized businesses aren’t as robust as big firms, which makes them an easier target for hackers. A construction project in the wrong hands can wreak havoc for both your client and your heard-earned reputation as a contractor. Hackers could steal:


● sensitive or proprietary data and assets

● subcontractor data or financials

● banking and financial accounts

● intellectual property

● employee information (Social Security numbers, bank account data, etc.)


At the most basic level, you can make sure your firewalls are enabled and updated, train employees on security protocols, secure your company’s network, and change passwords regularly — but these things are not enough.


Understanding Cyber Liability insurance


Like other kinds of insurance, cyber liability insurance is a must for small and medium enterprises, because just one cyberattack is often enough to put such firms out of business.


Good insurance is never one size fits all, so there are a number of innovative coverage options to consider. Some of the more popular forms of risk management insurance include:


First Party Insurance: These policies take care of most related expenses if your network is compromised by unauthorized access, a data breach, hacktivists (social activist hackers), or otherwise. Additionally, most of these cyber security policies also cover forensic and legal services related to the breach itself, mandatory notification costs, fraud monitoring services, and other direct costs. Many indirect costs, such as reputation management and vendor costs, are covered as well.



Third Party Insurance: These cyber liability insurance policies protect your business from judgements related to a security breach, whether the lawsuits are from customers, partners, or shareholders. Third party insurance also covers privacy and network security matters.


Most construction companies need both these policies.


An insurance broker will identify your specific risks and needs and tailor the cyber insurance coverage to them. A good broker not only offers the right policy, but also helps you understand the risks you are dealing with, as well as the legal and regulatory background. Be sure your broker has IT professionals and lawyers in house, or at least works closely with them, and has a deep understanding of your industry, and most importantly — where you’re going as a company.


Using technology can certainly help your construction business grow, but it also makes it vulnerable. Contrary to popular belief, small construction companies have no special immunity due to the type of business, size, or because they do not use new technology “that much.” Luckily, that same technology can also help you reach to the right team of people that can help you without the problems normally associated with cyber liability insurance. A modern insurance tech solutions broker has a platform that finds which insurance policies are best for you and compares policies across your industry to thoroughly understand your company, so you get tailored insurance coverage with less guesswork. 


277559bConsultant’s Corner: In addition to providing perspectives and analysis from a lawyer, it is beneficial to hear from industry professionals and consultants. These are the folks that serve as expert witnesses during litigation / trial and consult with owners and contractors preconstruction, during construction, and postconstruction. Consultant’s Corner is dedicated towards hearing from those experienced and respected professionals.



K. Patrick Whalen (photo) is President and owner of MPlus Property Services LLC, a Community Association and Commercial Property Management Company with offices throughout Florida. Mr. Whalen is a Florida Licensed Community Association Manager and Licensed Real Estate Salesperson who has served as both an expert witness and consultant to developers and community associations from the early planning stages through turnover. Turnover of the association from the developer to the owners is a crucial milestone to associations. Having an experienced property manager that can navigate owners through the process in ensuring the developer provides all applicable funds and documentation (e.g., minutes of the association, financial records, plans and specifications, certificates of occupancy, written warranties, a turnover inspection report, etc. – see Fla.Stat. s. 718.301(4) relating to condominium association) is imperative. Mr. Whalen takes the time to provide his perspective on developer turnover as a property manager.






As a property manager one of the biggest challenges in maintaining a community after developer turnover is identifying sources for materials and supplies provided, such as mailboxes, light fixtures, decorative tiles and other architectural features on or in a commercial building, home or condominium, or common area.


Having managed and transitioned over 200 developer communities since 1989, experience has helped me to learn and understand the importance of keeping meticulous records on personnel and subcontractors working in a particular community or commercial project. While doing so may involve a considerable amount of time, it can also save you or your clients time and money months and years from now when you can go back to those notes and recall important information.


Over the past 25 years of managing community associations, there have been countless examples of the importance of such records, but one example illustrates how the smallest detail can save tens of thousands of dollars: In 2011, I got a call from a developer asking about a homeowners association we managed for them from beginning through turnover. The developer was concerned because they had received a letter from an attorney threatening to sue over rusting mailboxes installed at each home.

Given that the community built-out to over 5,000 homes and estimates to replace the mailboxes were about $30.00 per mailbox, with another $10.00 per mailbox to remove the old one and install the new ones, the tab for this was going to be around $200,000.00.
Sure the developer could think of a number of reasons why they should not or would not have to pay for the mailboxes, they understood that taking such a position would not be popular with their 5,000+ customers.
Just days before committing the funds, the developer recalled a detailed warranty book that we maintained and provided to the association at turnover. They took note of the fact that the book included not just the warranties on common components like the pool pump, paint and roofing for the common area amenities, but also details about decorative fixtures and finishes, like lights, maybe, just maybe, it included something about the mailboxes, even though they were not the maintenance obligation of the Association. It seemed a longshot.
At the time of their call, it had been over 5 years since turnover and the community transitioned to self-management shortly after. The warranty book given to the on-site manager was nowhere to be found. Wanting to help, we turned to our electronic back-ups for any records kept on our server regarding this community. Among the records we found was a spreadsheet on suppliers / manufacturers and details about their own individual warranties and, to our surprise, we even had scanned copies of warranty papers, which included what came inside the mailboxes—a manufactures lifetime warranty.



Without a doubt, the developer would have paid the cost to replace the mailboxes, but instead was able to make a claim with the manufacturer who not only agreed to replace the mailboxes, but also split the cost of the installation, with the other half paid by the developer. This saved our client over $180,000 in parts and labor and again reminded them of what an invaluable service partner we are to them.




For more information on K. Patrick Whalen:


Phone:  1-855-99-MPlus (67587)




Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


don carlowConsultant’s Corner: In addition to providing perspectives and analysis from a lawyer, it is beneficial to hear from industry professionals and consultants. These are the folks that serve as expert witnesses during litigation / trial and consult with owners and contractors preconstruction and during construction. Consultant’s Corner is dedicated towards hearing from those experienced and respected professionals.


Don Carlow (photo) is the owner of Florida Construction and Scheduling Consultants, LLC and has over twenty-five years of experience in CPM planning and scheduling, cost engineering, construction claims analysis, and program and construction management. He serves as both an expert witness and as a consultant preconstruction and during construction in scheduling, forensic delay analysis, cost and damages analysis, and litigation support on construction projects ranging in size and scope.  His project experience includes heavy civil; transportation; pipelines/underground utilities; government/military; mixed-use commercial; airports; hospitals; high-rise; theme parks; hospitality; schools/ universities; and single/multi-family residential.   Mr. Carlow has taken the time to share with us a very important article on maintaining organized and good project documentation based on his experience.




cpm100-wideWhen it comes to claims and disputes, I have often heard the proverbial advice that “you should document everything.” However, in reality this is rarely done and it is often impossible to accomplish. Normally, the folks on a construction project simply don’t have the time to write down everything that’s going on at the site and at every project meeting and then respond to every email and phone call. In fact, I would not advise you to try! Doing so would be frustrating at best and counterproductive at worst. Your management team should be focused on managing the project. This is especially true on a troubled project, where you have to put out one fire after another. Your team’s efforts should be focused on using their time in the office wisely and making sure that the important items are documented. So, how are they supposed to know which of the items are the most important to document? This article attempts to answer that question by establishing some rules and by providing an objective framework that can be used when deciding how and what to document.




For each contractual disagreement or issue, spend the time to write the letters or emails that support your position and explain why your position is correct. This should be the overall framework from which you are focusing your documentation efforts. Document the issues and events as they occur; take a photo, write an email, or put an extra note in the daily report that explains the event or occurrence from your perspective. Make sure there is evidence in the file that supports and explains your position. You’d be surprised how the resolution of an issue was changed by a single photo or a couple of sentences included in a daily report.




When is it necessary to write a letter? When someone writes one to you. It is not necessary to engage in a letter-writing campaign (it is simply not true that the person with the highest stack of letters automatically “wins”). But, for each letter that’s written to you make sure there is a written response in the file. One solid letter for each issue is a good rule of thumb. Get your points documented, keeping in mind tip #1, above.




In your written correspondence, always be professional and stick to the facts. Be objective, rational and unemotional. There is no need to tell the owner’s rep that he’s an idiot (even if he is). Many people may be involved in the resolution of the dispute after the project is over and they may never meet you. People are going to form their opinions of you based on what you say and how you say it.




Notice provisions are written into contracts for a reason. Their purpose is to give the other party time to investigate, mitigate expenses, and track costs. Read your contract and make sure you are complying with the notice requirements. To make giving notice easier, we recommend that our clients develop form notices. At a minimum, we suggest having form notices available for each of the following situations: (a) Excusable Delay/Request for Time Extension, (b) Differing Site Condition, (c) Conflicting Specifications, (d) Acceleration (Directed or Constructive), (e) Disruption of Work Force, and (f) A/E Change. Have your lawyer review the notices before using them in the field.




I have been involved in several lawsuits in which the judge upheld signed releases on payment applications and change orders, and barred recovery for damages. Have your lawyer review the release language on any document before you sign it. At a minimum, cross out the offending language, or simply write that you are reserving your right to additional money or time for the impact encountered on the project or as a result of the change.


Knowing how and what to document will keep your team focused on managing the project and put your company in a much better position when it comes to resolving disputes when they arise.
Please contact Don Carlow for more information regarding the value he can provide to your construction project or litigation team. He can be reached at the following contact information:
Phone: (407) 603-6165



Please contact David Adelstein at or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.