Healthcare Sector Cyber Insurance: Understanding Advantages and Criteria
In the rapidly evolving digital landscape of healthcare, the need for robust cybersecurity insurance has become increasingly important. Over the past 12 to 18 months, an increase in cyber insurance capacity has led to more options for healthcare organizations [1].
Publishing educational information and participating in events aimed at improving security posture is a common practice among cyber insurance firms. These initiatives help healthcare organizations navigate the complexities of cybersecurity and risk management [1].
To secure the best possible coverage, healthcare organizations should demonstrate strong governance and regulatory compliance, including adherence to healthcare regulations such as HIPAA, GDPR, and CCPA/CPRA. Additionally, advanced security controls beyond baseline measures should be implemented [1]. Regular reviews of compliance programs are essential to ensure their adequacy [1].
Coverage scope is another crucial factor. Organizations should ensure that their policies include critical areas such as data restoration, loss of income, notification costs, cyber extortion, and crisis management expenses. These elements help mitigate various financial and operational risks arising from cyber incidents [2][4].
When assessing the needed coverage limits, both per-occurrence and aggregate limits should be considered to match the organization's potential exposure and risk profile [5]. It's also important to confirm that policies address risks from third parties and business associates who handle protected health information [4].
Insurers increasingly expect proof of proactive security efforts and resilience, not just minimal compliance. Investing in robust cybersecurity measures such as multi-factor authentication, regular risk assessments, vulnerability management, and security audits can help lower premiums [1][4]. Transparency during underwriting and demonstrating accountability with a clear cybersecurity strategy and controls further help avoid higher premiums or coverage reductions [1].
Some cyber insurance firms partner with attorneys and incident response specialists to help with auditing and provide additional services. Being part of a collective network of professionals can be beneficial when dealing with a breach [2].
The University of Pittsburgh Medical Center (UPMC) has had cybersecurity insurance for at least a decade and uses it as part of their risk mitigation strategy. UPMC's cybersecurity premiums are affected by milestones such as HITRUST certification [3].
Healthcare sector experiences the highest average cost for data breaches, according to IBM's annual Cost of a Data Breach report. Improving an organization's security posture may require investing in additional security personnel and better tools [6].
In conclusion, by focusing on strong governance, tailored coverage, appropriate coverage limits, evidence of advanced security practices, and inclusion of vendor/business associate risk coverage, healthcare organizations can position themselves for successful insurance procurement while addressing the heightened cyber threat environment in healthcare [1]. Considering an independent third party for risk assessment and positioning when applying for cyber insurance is also advisable [7].
- Incorporating strong governance and adherence to healthcare regulations such as HIPAA, GDPR, and CCPA/CPRA, along with advanced security controls and regular compliance program reviews, can demonstrate a healthcare organization's commitment to security and potentially reduce cybersecurity insurance premiums.
- To ensure comprehensive protection, healthcare organizations should ensure their cyber insurance policies cover critical areas like data restoration, loss of income, notification costs, cyber extortion, and crisis management expenses, as well as risks from third parties and business associates who handle protected health information.
- To navigate the complexities of cybersecurity risk management, healthcare organizations can engage in educational initiatives, participate in events, and collaborate with cyber insurance firms, attorneys, and incident response specialists in forming a collective network of professionals to aid in auditing and managing breaches.
