Data Breach Insurance

May 4, 2011
Volume 28, Issue 4

The demand for security/privacy insurance is growing rapidly as health care practitioners realize that traditional insurance does not address privacy exposures.

The demand for security/privacy insurance is growing rapidly as health care practitioners realize that traditional insurance does not address privacy exposures. The cost to notify affected individuals adds up quickly, particularly if the clinician must provide some form of credit monitoring, hire legal and public relations firms to mitigate reputational damage, and pay for a computer forensic investigation. Lawsuits that may arise from a breach are costly to defend, even if groundless, and class action lawsuits are on the rise. Regulatory actions are becoming more common and can impose a significant financial burden on even a well-capitalized practice.

Applying for coverage has been simplified, and the cost has come down dramatically over the past few years. As such, security/privacy insurance has become a good value for most organizations. Specialty risk protection insurance is sold by coverage part, so you can buy what you need and have access to the latest enhancements, including:

• Express coverage for claims arising from breaches of confidential information considered “electronic-protected health information”

• Coverage for regulatory actions and fines/penalties (where insurable by law)

• Flexible event management options (eg, covering forensic investigation expenses, costs to notify and provide identity monitoring for individuals whose personal information is compromised)