The Importance of Cyber Insurance for Healthcare Systems
Recently, healthcare systems have been one of the top targets for threat actors – no surprise given the significant amount of confidential information they store.
It’s important that these healthcare systems protect their providers and patient records by familiarizing themselves with State regulations, and how health data should be properly shared and stored. As digital healthcare progresses, the regulation of data security has become a major issue. Unfortunately, many in the digital healthcare sector are slipping through the regulatory cracks.
As we progress in the digital age, the world has become increasingly dependent on technology – Healthcare systems included. Medical billing platforms are what keeps the healthcare system flowing. Without this – insurers, providers, hospitals, and pharmacies cannot process bills and get the payments they need to operate.
Consider the recent cyber-attack on Change Healthcare. This attack has revealed that the industry is very susceptible to fraud and computer hacking. The American Hospital Association referred to this event as “The most significant & consequential cyberattack on the U.S. Healthcare system in American history.” Change Healthcare, who is involved with nearly 1/3 of our Countries patient records, is currently under investigation by the Health Insurance Portability & Accountability Act (HIPPA) to see if Change properly protected its patients’ data.
What can our clients in the healthcare industry do to protect themselves?
In today’s evolving cyber landscape, it’s important that the healthcare industry is protected. For an industry with zero tolerance for system downtime, Healthcare systems need to ensure they consult the proper IT professionals and carry Cyber coverage tailored to their unique exposures.
It’s important to carry all applicable coverages that will react on a first and/or third-party basis – below are some of the key coverages to consider:
- Network Security & Privacy Liability
- Privacy Regulatory Defense & Penalties coverage
- Payment Card Industry Data Security Standard Liability for PCI DSS Fines & Assessments
- Dependent Business Interruption
- System Failure coverage – including data recovery & non-physical business interruption.
- Extortion / Ransomware
- Cyber Crime – Financial fraud, Telecommunications and Utilities Fraud, & Phishing Fraud.
Cyber coverage is much more than a piece of paper saying ‘You’re covered for X’. Cyber carriers bring value to our insureds through consistent cyber scans, consultations, and expert claims handlers that negotiate with threat actors in real time.
Another major component of cyber coverage is legal counsel specializing in privacy regulations – who can quickly ascertain your legal obligations under the relevant jurisdictions. All cyber policies are unique in their own way. Ensure you review the specifications and terms & conditions of your policy carefully.
About the Author
Peter Stavrakos is a Vice President and Professional Liability/ Cyber Liability Broker with Founders Professional (Wholesure). Peter assists retail insurance agents across the Country in securing professional liability and cyber liability insurance solutions for Healthcare, Architecture & Engineering, Technology, and Miscellaneous Professional Service organizations of all sizes. Peter can be reached at [email protected].