Does your business need cyber insurance?
Quick Answer: Yes.
Technology is essential in healthcare today with the role continuing to grow in the future as IoT and AI expand. As more technology is used and more information is transmitted over the Internet, the risk of data leakage increases through cyber attacks by cyber threat actors. That is called cyber liability which is the risk posed by conducting business over the Internet like over networks or using electronic storage.
As part of a risk management plan, institutions must determine, which risks to avoid, accept, control or transfer. The cyber liability for healthcare is vast. Healthcare data is especially lucrative to threat actors. A successful cyber attack can cause moderate to severe losses for an organization. In healthcare, the provider is ultimately legally responsible for any data loss; transferring risk is when cyber insurance is helpful.
Cyber insurance covers an organization’s liability for a data breach in which customer or patient personal information is exposed or stolen by a cyber attack of the network or data storage. The insurance covers related to claims by first and third parties.
What does it cover?
Cyber insurance usually includes the cost of investigation, business losses, notification, and lawsuits or extortion. Policies depend upon several risk factors; however, for most small businesses annual premiums could range from $1,000 to $7,500.
Let’s dive deeper into cyber insurance:
Investigation: A forensic examination is conducted to discover what happened, how to repair damage then how to prevent the same type of breach from occurring in the future. Depending on the size of the organization, the investigation could involve a third-party security firm and coordination with law enforcement.
Business Losses: Cyber insurance policy which grew out of errors & omissions policies (errors due to negligence and other reasons) may include similar items to E&O policies. Monetary losses encountered by network downtime, business interruption, data loss recovery and costs involved in managing a crisis, such as rebuilding reputation.
Privacy and notification: Each state has data breach notification laws requiring data breach notifications to customers and other affected parties. Included is credit monitoring for customers.
Lawsuits and extortion: coverage includes legal expenses connected with the release of private data and intellectual property, legal settlements and regulatory fines. Some policies may cover the costs of cyber extortion.
As part of every cyber insurance policy, an audit of procedures and systems takes place. It is typically a checklist to assist with the process. That will help a business understand what it needs to do to prevent and mitigate a cyber attack.
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