Cyber Insurance Blog

Healthcare Data Breaches: What You and Your Clients Must Know

Healthcare Data Breaches: What You and Your Clients Must Know

Digital collection, storage, and retrieval of personal data are essential to patient care and medical research today. Protecting that data from unauthorized access is essential, too.

Healthcare data breaches can occur for many reasons. However they happen, security breaches in healthcare can have serious consequences for patients and the organizations responsible for protecting patients’ data.

The Health Insurance Portability and Accountability Act (HIPAA) mandates that healthcare providers and other covered entities keep sensitive patient information private and secure. Any unauthorized disclosure of this information can result in severe penalties—including hefty fines that could threaten organizations’ reputation and viability.

You can do much to help healthcare clients safeguard sensitive information, reduce their risk of data breaches, and respond effectively should one take place.

Possible Consequences of a HIPAA Data Breach

Stethoscope next to computer keyboard on which padlock rests, illustrating concept of preventing healthcare data breaches.

Healthcare data breaches have been on the rise in recent years, according to the Department of Health and Human Services (HHS). Indeed, 2023 saw the most reported cyber security breaches in healthcare (725) and the most breached records (more than 133 million).

In HIPAA breaches, patients’ protected health information (PHI) is accessed or exposed without authorization.

HIPAA breach examples include compromises of individuals’ data through:

Once PHI is in bad actors’ hands, they can abuse it to wreak havoc on people’s lives. Patients can find themselves vulnerable to financial and emotional distress. They may spend years repairing their credit and financial records.

HIPAA breaches can also damage a healthcare organization’s reputation. Reputational damage leads to broken trust, lost customers, and decreased revenue.

And healthcare data breaches can have legal and financial repercussions for healthcare companies and organizations. Under HIPAA, healthcare providers, health plans, healthcare clearinghouses, and other entities, as well as their business associates, can face financial penalties.

The Office for Civil Rights, the HHS agency responsible for enforcing HIPAA, can impose penalties ranging from $137 to $68,928 per violation. The maximum penalty is $1.5 million per year for repeated violations of the same provision.

The penalty’s size depends on the severity of the violation, the organization’s level of culpability, and its efforts to correct the violation. A violation due to willful neglect not corrected within the required time frame, for example, will result in a higher penalty than one promptly addressed and mitigated.

Help Your Clients Respond to and Reduce Their Risk of HIPAA Breaches

Digital forensic expert sits at computer monitor, analyzing cause and scope of healthcare data breaches. Knowing how to respond to healthcare data breaches is crucial, especially breaches occurring due to cyber crime.

Threat actors relentlessly try to gain access to PHI because it is so lucrative on the illegal market. The medical practices, hospitals, and other healthcare organizations you serve must realize the question is more likely when they will face a HIPAA breach than if.

How can you help clients in the healthcare sector respond to a data breach?

You can teach clients the importance of having a comprehensive incident response plan in place before a breach occurs. The plan should include:

  • Instructions for timely notification of internal stakeholders, external experts (including legal counsel and digital forensic experts), law enforcement and regulatory agencies, and affected individuals
  • Clear definitions of the roles of management, IT, and other departments
  • Step-by-step instructions in best incident response protocols

You should also stress preventive measures your clients can take to reduce the risk of future breaches. These steps include:

  • Implementing robust cyber security measures such as encryption and multifactor authentication
  • Carrying out regular risk assessments
  • Conducting regular staff training on security best practices

How Cyber Liability Insurance Benefits Your Healthcare Clients

Broker holds tablet computer and presents Cyber Insurance policy to client in the healthcare sector.The financial penalties for HIPAA breaches are stark reminders of how much failing to safeguard patients’ sensitive information can cost.

One of the best ways to help your clients mitigate the financial risks of healthcare data breaches is by quoting and selling them a strong, comprehensive Cyber Liability Insurance policy.

Cyber Insurance helps cover such costs associated with data breaches and other cyber incidents as:

  • Notifying affected individuals
  • Providing credit monitoring services
  • Managing the public relations fallout from a data breach
  • Conducting a forensic investigation to determine the cause of the breach
  • Implementing necessary security measures to prevent future incidents
  • Defending against lawsuits or regulatory penalties

A Cyber Liability Insurance policy can give healthcare organizations valuable financial protection in the face of ever-evolving cyber threats.

At ProWriters, we can help you research and quote the Cyber policies your healthcare clients need with less effort and in less time, without sacrificing your clients’ protection and peace of mind.

Get more information about our powerful Cyber IQ Comparative Rate Platform now.

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