Cyber Insurance Blog

Ransomware Hits Healthcare

Ransomware Hits Healthcare

How to Protect Your Organization from Ransomware Attacks

In 2018, the NAS cyber claims team managed more than 2,000 cyber liability claims from policyholders across a wide spectrum of businesses. In our annual Cyber Claims Digest, we analyzed 1,800 closed claims and identified trends among their healthcare policyholders and non-healthcare insureds. Ransomware, across both segments, was the number two cause of loss and represented over 10% of all closed claims. In three recent claims in 2019, ransom demands have skyrocketed to $400K, $500K, and $1.2 Million. This is almost 30 times the average cost of extortion payments in 2017.

Among healthcare-related businesses, NAS has seen a six fold increase in ransomware claims since 2015.

Recent targets of cyberattacks have included:

  1. Physicians’ Offices
  2. Medical Centers
  3. Hospitals
  4. Allied Health Facilities
  5. Surgi-Centers

We will continue to see growth in this type of cyberattack and cyber liability claims. Because criminals recognize that access to patient data and practice management systems are essential for healthcare organizations, they target these vulnerable organizations and expect rapid payment of their demand. Many smaller healthcare organizations do not have sophisticated IT support staff and the criminals know that, making them even more susceptible. Hackers know they’re more likely to get paid by these organizations as it’s more costly for the organization to rebuild their system based on backed-up data.

Ransomware Attack Scenario

Employees of a hospital discovered that their email accounts were not accessible. The hospital’s IT department investigated and discovered that a hospital ransomware attack affected 70 servers and 600 workstations. The hospital had to close operations for two business days and suffered various losses in relation to the event.

Close-up of a doctor in a white coat leaning on a hospital hallway wall with his arms crossed, holding a stethoscope. Cyber Insurance covered:

  • IT Forensic Consultants
    Consultants were retained to immediately address the ransomware attack, secure data, investigate if any patient health information was compromised, and rebuild the hospital’s network.
  • Business Interruption and Income Loss
    Several surgeries had to be cancelled resulting in loss of income.
  • Data Recovery
    A number of employees had to work overtime to recreate lost data from back-ups.
  • Ransom Amount
    The hospital paid the ransom demand to restore system access.

Total Expenses: $570,000


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The cost of a cyber attack can have a substantial, if not devastating effect on an organization.

According to Verizon’s 2018 Data Breach Investigations Report (DBIR), ransomware is the most common type of malware. Ransomware attacks make up 39 percent of malware-related data breaches, double the percentage from last year’s DBIR. The DBIR discovered that ransomware accounts for 85 percent of all malware targeting in the healthcare industry.

In their 2018 report, the US Department of Health and Human Services (HHS) identified the SamSam virus as the source of at least eight major ransomware attacks on government and healthcare-related entities. The HHS reported that, “beyond being a minor inconvenience, ransomware attacks can have impacts on patient care and delivery within the HPH sector. As a result of a recent attack on one hospital, an outpatient clinic and three physician offices were unable to use that hospital’s network to access patient history or schedule appointments.”

How to Protect Your Organization from Ransomware Attacks

  1. Conduct a Risk Assessment
  2. Train Employees
  3. Implement Data Security Policies and Procedures
  4. Manage Vendors Appropriately
  5. Prepare an Incident Response Plan

As cyber threats continue to evolve and increase, it’s important that your defense against these attacks stays as up to date as possible. To learn more about what you can do to protect your organization, contact us or call us at (484) 231-2335 to speak with an expert.

Jeremy BarnettBy: Jeremy Barnett
SVP Marketing & Business Development
NAS Insurance Services
[email protected]
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