Why Engineering Firms Are Prime Targets for Cyber Attacks in 2026

Are design professionals’ cyber risks actually covered? For most architects and engineers, the answer might be surprising.

According to the World Economic Forum, 72% of organizations reported an increase in cyber risks. The construction and engineering sector now ranks among the most targeted industries. Standard professional liability insurance will not protect design firms for first-party claims.

The Critical Difference: Third-Party vs. First-Party Coverage

For most design professionals, the answer to “Does my E&O policy cover cyber attacks?” is no — at least not the way they expect.

The most common coverage in professional liability policies regarding virus transmission is called “network security” liability. But this only covers third-party expenses — such as when a design firm gets sued by a client for transmitting a virus. It covers the cost of defense and any third-party costs the client incurs. However, it provides no first-party coverage for the design firm itself in the event of a cyber attack or breach.

Only true cyber liability coverage covers first-party costs associated with a cyber attack or breach on the design firm. That’s why the coverage within a professional liability policy is called “network security” and not “cyber liability.”

What about a major ransom demand? What about two weeks of system downtime? What about paying a fake invoice for $50,000? That’s a different category of loss entirely. The vast majority of design firms enter 2026 without true cyber coverage.

Why Engineering Firms Are Prime Targets

Fifty-nine percent of AEC firms experienced a cybersecurity threat in the past two years, according to Dodge Data & Analytics. Cyberattacks on construction companies doubled in Q1 2024 compared to Q1 2023.

The reasons are structural. Engineering firms hold exactly what attackers want: time-sensitive projects where delays cost real money, critical infrastructure plans of interest to nation-state actors, detailed client information across multiple projects, and smaller IT budgets than the data they protect would suggest.

Design professionals are more than twice as likely to face ransomware attacks compared to other industries, according to research from CyberPress and FalconFeeds. DragonForce, a ransomware group that attacked O&S Engineers & Architects in February 2025, specifically targets architecture and engineering firms. Attackers know deadline pressure makes firms more likely to pay ransoms quickly.

To provide comprehensive guidance on the current cyber threats facing design professionals, Risk Specialty Group has published detailed cyber liability insurance updates for 2026.

What Does a Data Breach Actually Cost?

The global average cost of a data breach reached $4.88 million in 2024, according to IBM — a 10% increase from the previous year. That includes forensic investigation, legal fees, client notification, credit monitoring, regulatory fines, and lost business while reputation recovers.

Market reality: only 10-20% of small and mid-sized businesses carry adequate cyber coverage. Large corporations have gotten the message — 80% carry cyber insurance. But SMEs remain dramatically underserved.

For design firms with revenues of $1 million to $5 million, annual premiums typically range from $1,000 to $3,000, depending on limits and coverages selected.

Taking Action

Effective risk management starts with understanding actual exposure. Design professionals should pull their policy, read the cyber-related language, and look for exclusions, sublimits, and gaps.

Key questions to consider: What would two weeks of downtime cost in lost revenue? What would happen after paying $50,000 to a fake invoice? What would happen if the firm could no longer access design plans and email?

Risk Specialty Group provides risk management guidance exclusively for design professionals, working with over 20 A-rated carriers who specialize in architects, engineers, and design firms. Content strategy by best digital marketing agency ASTOUNDZ.

Risk Specialty Group
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Website: https://riskspecialtygroup.com/
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