Health Information Management

Cyber insurance may help cover the true cost of a breach

HIM-HIPAA Insider, February 9, 2015

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Even organizations with sound policies, procedures, training, and safeguards can experience a breach. When—not if—a breach occurs, traditional insurance may not be enough to cover the damages. Ensuring that your organization has adopted the appropriate cyber insurance can be valuable in the event of a breach.

 
For example, if a laptop containing the PHI of 100,000 patients is stolen from your organization, a traditional insurance policy will likely cover the cost of the laptop. However, that policy may not cover the data breach costs that resulted from the theft, including the cost of a forensic investigation, sending notices to affected patients, offering identity protection and credit monitoring for affected patients, and potential civil monetary penalties, says Adam Greene, JD, MPH, a partner at Davis Wright Tremaine, LLP, in Washington, D.C. In the event of a breach, cyber insurance can often cover most of these costs.
 
"We've seen insurers move toward excluding data security coverage from the general policies and instead require a separate policy for cyber insurance coverage," Greene says. "The costs related to the data are exponentially higher than the costs related to the hardware."
 
Healthcare organizations should examine their insurance policy to understand whether it simply covers the cost of replacing stolen hardware or covers the activities associated with breach notification and investigation, he says.
 
Continue reading "Cyber insurance may help cover the true cost of a breach" on the HCPro website. Subscribers to Briefings on HIPAA have free access to this article in the February issue.



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