Cyber insurance was initially offered in the 1990s and viewed as optional, but today it’s a must-have protection for all businesses across all industries. It’s designed to protect companies against threats in the digital age, with cybercriminals becoming increasingly more sophisticated with their tactics over the years. Cyber threats include data breaches, phishing attacks, business email compromise scams, and ransomware attacks.
A Cyber insurance policy, in general, is designed to pay for a number of expenses after an incident. This includes the costs for a breach coach or law firm to help a business navigate a cyberattack, a forensic specialist to determine the cause of the attack, a negotiator in the event of ransomware, and a public relations firm to mitigate reputational damage. There are also the costs associated with business interruption, hefty fines, and liability. For example, HIPAA Privacy Rule violations in the health care industry could result in penalties ranging from $100 to $50,000+ per violation, with a calendar year cap of $1.5 million.
Why Cyber Insurance for the Health Care Industry?
In 2022, 674 data breaches were reported in the health care industry, impacting about 49.8 million records, according to the HIPAA Journal. In addition, in 2022, the average cost of a health care data breach in the U.S. was $10.1 million, according to IBM’s annual report. The health care industry has had the highest average data breach cost compared to other industries for the past 12 years.
Following a breach or other cyberattack, Cyber insurance is necessary to assist a health care provider’s financial recovery. Insureds must understand what they are purchasing, what the policy covers, and the services provided.
Equally important is having a cybersecurity plan in place to mitigate potential attacks and losses. In fact, insurers will ask to see an insured’s plan before providing coverage.
About Manchester Specialty Programs
We specialize in providing agents and brokers with totally integrated business insurance solutions, including Cyber insurance coverage, to meet the needs of Home Care, Allied Health, Medical Staffing, and Human/Social Services organizations. For more information about how our products and services can help protect your insureds, please contact us at 855.972.9399.