Cyber insurance for healthcare professionals

Cyber insurance, also called cyber liability or cybersecurity insurance, protects medical practices and other healthcare businesses in the event protected health information (PHI) is compromised. Cyber liability can cover notification and recovery costs, as well as provide essential resources.

It provides liability coverage related to:

• Data breaches
• Business interruption and recovery expenses
• Regulatory fines and penalties

Policy cost is based on several factors such as your healthcare specialization, level of cyber risk, the type and amount of sensitive data you store, and coverage limits.

Every healthcare practice stores the health information of patients, including medical records, test results, billing information, and other sensitive patient data. The federal Health Insurance Portability and Accountability Act (HIPAA) requires healthcare organizations to safeguard this information and respond appropriately when a breach occurs.

Healthcare providers often face cyber risks from ransomware attacks, phishing scams, malware, lost devices, and employee mistakes—and even a small incident can expose patient records.

Cyber insurance helps health practitioners recover from these events by covering many of the costs associated with a HIPAA breach, including forensic investigations, patient notification expenses, credit monitoring services, data recovery, cyber extortion payments, and certain HIPAA fines and penalties.

Healthcare providers may also face investigations or audits by the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR), which enforces HIPAA regulations. These audits can be triggered by a patient complaint, reported breach, or routine compliance review. Even if no breach occurred, responding to an audit can involve significant legal and compliance costs.

There are two types of cyber liability insurance coverage that help protect healthcare businesses from cyber threats: first-party coverage and third-party coverage.

Healthcare organizations increasingly rely on electronic health record (EHR) systems, telehealth platforms, cloud-based software, and connected medical devices such as imaging equipment and patient monitoring systems. A cyberattack, system failure, or unauthorized access to these technologies can expose PHI and lead to significant recovery costs.

In most cases, healthcare professionals only need first-party coverage, also called data breach insurance. This coverage can often be added to your general liability policy or business owner's policy.

Cybersecurity insurance can cover expenses related to a patient data breach at a doctor's office or other healthcare business that exposes personally identifiable information (PII). First-party cyber insurance can help cover data breach response expenses such as:

• Investigations into cyber incidents
• Data security fixes
• Data breach notifications
• Credit monitoring services for affected clients
• Cyber extortion demands
• Public relations

If your healthcare business is responsible for the security of client records at another company, you could be held liable if the system is breached. For example, you face additional risks if you work as a consultant and recommend software to other businesses.

When a client blames you for failing to prevent a security breach, third-party cyber liability coverage helps pay for:

• Attorneys' fees
• Court costs
• Settlements or judgments

While cyber liability insurance shields against cyberattacks and data breaches, your business faces many other risks, too. Healthcare professionals should also consider the following as part of their risk management strategy:

General liability insurance: This policy can pay legal expenses related to patient property damage and injuries, along with advertising injuries such as slander and libel.

Business owner’s policy: A BOP bundles general liability coverage with commercial property insurance, often at a lower rate than if the policies were purchased separately.

Workers’ compensation insurance: Most states require this coverage for healthcare businesses with employees. It helps cover medical costs and disability benefits in the event of a work injury.

Professional liability / medical malpractice insurance: This policy covers legal expenses when a healthcare professional is accused of negligence or an error.

Commercial auto insurance: Almost every state requires this coverage for business-owned vehicles. It helps pay for property damage and medical bills after an auto accident.

In many cases, yes. Cyber coverage and malpractice insurance protect against different risks.

Cyber liability insurance helps cover the costs of a social engineering incident or other type of cyberattack. It can help pay for expenses such as forensic investigations, public relations, data recovery, and certain penalties.

Medical malpractice insurance (also called professional liability insurance) helps cover claims that a healthcare provider's negligence, error, omission, or failure to meet professional standards caused harm to a patient. It may also respond when allegations of professional negligence contribute to a HIPAA violation or privacy-related claim.

Because healthcare providers face both clinical and cyber risks, many businesses carry both types of coverage as part of a comprehensive insurance program.

Are you ready to safeguard your healthcare business with cyber liability insurance or another type of business insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.