01-27 GENERALS WINTER25 FINAL EDIT (JAN 25) - Flipbook - Page 24
INNOVATION
diversion fraud. Losses are often discovered only after funds become irrecoverable.
The Necessity of Cyber Policy Compliance
PROACTIVE GOVERNANCE AND CONTROL
The regulatory environment has
fundamentally shifted from voluntary
best practices to mandatory obligations.
Canada’s proposed Bill C-8 (Critical Cyber
Systems Protection Act) establishes
that contractors supporting critical
infrastructure—telecommunications,
energy, transportation, 昀椀nancial services—
must implement formal cybersecurity
governance.
MANDATORY REQUIREMENTS INCLUDE:
Implementation of documented
cybersecurity programs aligned with
recognized frameworks
Rapid incident reporting protocols
Comprehensive third-party risk
oversight across supply chains
Demonstrable incident response
capability and 昀椀nancial resilience
CONTRACTUAL MARKET ACCESS Even where
construction is not a primary regulated
sector, designated operators now impose
explicit cybersecurity requirements on
their contractors. Firms unable to evidence
basic controls face:
Enhanced audit rights and additional
contractual obligations
Potential exclusion from critical
infrastructure projects
Competitive disadvantage in an
increasingly regulated procurement
environment
FOUNDATIONAL CONTROL FRAMEWORK Contractors
need not become technology companies,
but must implement baseline measures
consistent with the NIST Cybersecurity
Framework:
Enforce multi-factor authentication
(MFA) on all remote access points
Maintain isolated, tested backups
enabling rapid post-attack restoration
Implement role-based system access
limitations
Conduct regular social-engineering
recognition training for staff
Establish integrated incident response
plans coordinating legal, operational, and
client communications
STRATEGIC IMPERATIVE Cyber risk now sits
alongside safety, cost, and schedule as a
core business concern. Proactive compliance positions contractors as trusted
partners; failure to act results in enhanced
scrutiny and restricted market access.
The Cost of Non-Compliance
BUSINESS IMPACT AND STRATEGIC IMPLICATIONS
The 昀椀nancial and operational
consequences extend far beyond
immediate IT disruption:
DIRECT FINANCIAL LOSSES
Payment diversion fraud typically ranges
from $250,000 to multi-million dollar
losses per incident
Traditional construction insurance
policies (CGL, Builder’s Risk) provide little
to no coverage for cyber events, creating
uninsured loss exposures
Ransomware demands and forensic
PROUDLY
CANADIAN
SINCE 1972
investigation costs compound the
昀椀nancial impact
OPERATIONAL & CONTRACTUAL FALLOUT
Project delays trigger liquidated
damages and contractual penalties
Encrypted project 昀椀les disrupt multiple
active job sites simultaneously
Exposure of sensitive bid information
compromises future competitive
positioning
Regulatory investigations and clientmandated audits increase administrative
burden
STRATEGIC REPERCUSSIONS Organizations lacking compliance face:
Revenue erosion: Exclusion from critical
infrastructure projects representing 3040% of major contractor revenue streams
Reputation damage: Public incidents
undermine trust with owners, sureties,
and partners
Competitive displacement: Competitors
with veri昀椀ed cybersecurity programs gain
preferred bidder status
RISK FINANCING GAP Even well-controlled
organizations retain residual risk. Specialized cyber insurance has evolved to
昀椀ll critical gaps in traditional coverage,
funding:
Immediate incident response expertise
and forensic investigation
Business interruption losses (including
project delay costs)
Ransomware negotiations and
regulatory defense costs
Crisis communications and client
notification expenses
THE BOTTOM LINE For construction leaders,
the path forward is unequivocal: cyber
risk must be controlled and 昀椀nanced with
the same discipline applied to safety and
liability risks. Organizations that act proactively—strengthening controls, engaging leadership, and securing appropriate
昀椀nancial protection—will reduce exposure
while positioning for future growth. Those
that delay may 昀椀nd their next cyber incident permanently compromises not just
systems, but their ability to compete.
Key Takeaway for Leadership
Cyber risk management is now a boardlevel 昀椀duciary duty. The convergence of
AI-enabled threats, mandatory compliance
frameworks, and uninsurable traditional
policy gaps demands immediate executive
action. Contractors should initiate
cybersecurity program assessments,
align with NIST standards, and engage
specialized cyber insurance brokers before
the next attack materializes.
24 the generals • WINTER 2025/2026
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