The healthcare industry has increasingly become a target for cyber attacks due to the high value of patient data and the increasing reliance on digital technologies. As healthcare providers continue to digitize their operations, they become more vulnerable to cyber criminals, making cyber insurance more important than ever. In this article, we'll discuss cyber insurance, what it covers, and why it's important for medical practices to have it.
What Is Cyber Insurance?
Cyber insurance, also known as cybersecurity insurance or cyber liability insurance, is a type of insurance policy that covers a business's liability for data breaches and other cyber attacks. It can provide financial protection against the costs associated with a cyber attack, such as forensic investigations, legal fees, and notification and credit monitoring services for affected individuals, as well as indemnification for lost revenues during an incident.
Incidents covered by cyber insurance may include:
- Data breaches that exploit sensitive patient information
- Ransomware attacks on a hospital’s digital infrastructure
- Phishing and social engineering attacks that target nurses
- Business email compromise (BEC), making it difficult to schedule appointments
- Distributed Denial of Service (DDoS) attacks that prohibit access to test results
Why Do Healthcare Providers Need Cyber Insurance?
The healthcare industry is a prime target for cyber attacks due to the highly valuable and sensitive data involved. Medical records, including personal and financial information, are worth much more on the black market than credit card data, and hackers know this.
Cybersecurity Risks for Medical Professionals
Healthcare providers are responsible for the safekeeping of patient data, including HIPAA and other state and federal regulations. As a result, data breaches can have serious consequences. In addition to financial losses, cyber incidents can result in a loss of patient trust and severe damage to the provider's reputation.
Consequences of a Data Breach for Medical Practices
In 2014, the Boston Children's Hospital was the target of a massive DDoS attack that disrupted hospital operations for several weeks.
Anonymous, a well-known hacktivist group, subsequently launched a DDoS attack against the hospital's website and other online resources. The attack overwhelmed the hospital's IT infrastructure and caused significant disruptions to patient care and hospital operations. The FBI eventually intervened and helped the hospital to mitigate the effects of the attack. In total, this attack cost the hospital more than $300,000 in addition to weeks’ worth of operational disruptions.
How Much Should Healthcare Providers Pay for Cyber Liability Insurance?
The cost of cyber insurance for healthcare providers and medical practices can vary depending on a range of factors, including the size and type of practice, the amount of sensitive data handled, and the level of risk associated with the practice's IT systems and processes.
For the most up-to-date data related to cyber insurance pricing, please refer to Limit’s Cyber Price Index.
Cyber Insurance Checklist for Healthcare Providers
Insurance is all about mitigating risk. In order to keep their practices as safe as possible, medical professionals should consider engaging in the following cyber security practices:
Risk assessment. A thorough risk assessment can help identify potential vulnerabilities in the practice's IT systems and processes, as well as areas where additional security measures may be needed. For example, patient communication systems are particularly vulnerable as they contain a plethora of sensitive patient information.
Employee training. Ensuring that employees are trained on cybersecurity best practices can help minimize the risk of a data breach caused by human error. With more than 5,750,000 hospital employees in the U.S., one small error can lead to widespread consequences.
Regular software updates and patches. Medical organizations rely on robust software to manage vital medical records and offer virtual appointments. Keeping software and systems up to date with the latest security patches and updates can help minimize the risk of a cyber attack.
Backups. Regular backups of sensitive data can accelerate recovery after a data loss event, such as a ransomware attack.
Multi-factor authentication (MFA). MFA is a security mechanism that requires users to provide two or more authentication factors to access a system or application. By requiring multiple factors of authentication, MFA can significantly reduce the risk of unauthorized access or account takeover, even if an attacker has obtained the user's password.
Endpoint detection & response (EDR). EDR provides a proactive approach to identifying and responding to security incidents that occur on devices such as laptops, desktops, and mobile devices. EDR data can provide valuable information to help determine the scope and impact of an incident and assist in the claims process.
Some insurance providers may require or incentivize their policyholders to implement MFA and EDR as conditions of coverage. Limit’s Cyber Marketplace makes it easy to find the right solution for your client.
Cyber insurance is an important consideration for medical professionals and their practices in today's digital environment. By investing in cyber insurance, medical practices can help mitigate risks and ensure that they are well-prepared to respond to the next big cyber incident.
The Limit Perspective
Limit is a digitally-native wholesale insurance broker working on behalf of retailers in multiple lines of insurance and across the United States. Our platform allows clients to:
- Obtain instant quotes from top cyber insurers
- Find up to $3M in Insurance coverage automatically
- Receive a plan with customizable and comprehensive coverage
- 24/7 support
Limit is building a lean, tech-enabled business that can efficiently deliver insurance policies which are tailored to the needs of individual clients. We have taken some of the first steps to revolutionizing the industry and welcome you to learn more on our website: www.limit.com
Please reach out and connect with us and our representatives on LinkedIn as well.