Due to Covid-19, the healthcare industry shifted to the virtual world faster than anyone thought possible. As a result, healthcare businesses now store more data and have more people accessing that data remotely than ever before.
With the online nature of many healthcare businesses, hackers are having a field day with the valuable data being stored. According to The Washington Post, global intrusions threatening organizations’ cyber security skyrocketed more than 400% in 2019 and 2020 alone. Unfortunately, that trend shows no signs of stopping.
Typical hacking scenarios often result in days or weeks where the business cannot serve their patients, sensitive health information being put up for sale to the highest bidder, and lawsuits from patients who had their data stolen.
Therefore, cyber insurance for healthcare businesses has never been more essential. But, what cyber insurance coverage do companies need to protect themselves from the repercussions of a cyber attack? Read on to learn about the possible consequences of a cyber attack and how ProWriters helps you protect healthcare businesses with the right insurance coverage.
The Consequences of Neglecting Cyber Insurance for Healthcare Businesses
The more sensitive the data, the more valuable it is to hackers and their buyers. If data is difficult to change and can potentially wreak havoc on people’s lives if it falls into the wrong hands, hackers can charge higher ransoms — and the demands can be substantial.
Why are healthcare businesses, specifically, such lucrative targets for hackers? Healthcare businesses store the personal health information (PHI) for every patient they treat. Examples of common PHI include:
- Patient names
- Birth dates
- Telephone numbers
- Social Security numbers
- Driver’s license numbers
- Biometric identifiers
- Medical record numbers
- Credit card Information
To a hacker, healthcare businesses are a goldmine of sensitive information. They are the perfect one-stop-shop to steal information to perform a host of individual cyber attacks. Hackers know that and capitalized on it with almost 600 healthcare cyber attacks in 2020 alone.
Because healthcare businesses store so much valuable information, the US government enacted the Health Information Portability and Accountability Act (HIPAA) to protect patient’s privacy. In a data breach, the business is subject to heavy fines and penalties of up to $1.5 million a year per violation.
Even if the business took the necessary precautions to avoid a cyber attack, they are still responsible for any data breaches that resulted from their systems. Therefore, cyber insurance for healthcare businesses is essential to risk management in the likely event of a cyber attack.
First-Party Cyber Liability Insurance
The first level of cyber insurance for healthcare businesses is first-party coverage. First-party coverage protects the company from a cyber attack’s direct cost.
One scenario that first-party coverage protects against is a phishing attack. If an employee accidentally falls prey to a phishing attack and compromises data, first-party coverage pays for IT staff to find the extent of the damage, notify potentially compromised patients, and build the business’s systems back more securely.
Another scenario first-party coverage protects against is a ransomware attack. A ransomware attack is where cyber criminals hide a business’s data behind a paywall and force them to pay the ransom or lose their data indefinitely. First-party coverage provides experts who contact the criminals and in some cases, pay the ransom. Given that the average cost of a data breach in the US is $8.64 million, cyber insurance for healthcare can help protect the bottom line.
Third-Party Cyber Liability Insurance
The second level of cyber insurance for healthcare is third-party coverage. Third-party coverage differs from first-party by covering costs associated with cyber attacks that come from outside of the company.
For example, if a hacker breaches data and steals PHI, the business will often face legal consequences.. It is typical for the US Department of Health and Human Services to file claims against the company in violation of HIPAA in such a situation. With third-party coverage, insurance covers any regulatory fines and penalties.
Similarly, patients can file claims against a business for violating privacy laws if hackers steal their data in the breach. When there are hundreds or thousands of such claims, addressing them all can become unmanageable. Third-party coverage helps pay for defense against such claims, and in many cases, even pays them.
Aside from patient data breaches, credit card companies can even sue the business. If a business stores credit card payments and does not adhere to payment card industry data security practices, affected credit card providers can also press charges. Once again, third-party coverage supports a defense and pays costs, including fines.
Selling Cyber Insurance for Healthcare
Healthcare businesses are a cyber criminal’s gold mine. They must take steps to protect themselves. Cyber attacks are no longer a matter of if, and are now a matter of when.
Healthcare businesses can’t afford to wait until they are attacked to protect themselves. Not only could they lose millions of dollars, but they can also lose their patient’s trust and future business.
To prevent that future from happening to your healthcare clients, read our free eBook—The Expert Guide to Selling Cyber Liability Insurance. In it, you will learn:
- What your clients without insurance would really pay in a data breach
- The data regulations that apply to your clients
- The costs of non data compliance
- How to present and explain both packaged and stand-alone cyber insurance policies.
Click here to download the Expert Guide to Selling Cyber Liability Insurance.