Security Breaches on the Rise – Are you Covered?

By Marina Calabrese, Assistant Vice President, Communications, Medical Mutual

The recent cyber-attacks on one of the largest health insurers, Anthem Inc., underscores the fact physicians and other health care entities are increasingly exposed to privacy related claims such as lost laptops, hacking, and virus attacks, which can result in an embarrassing and costly loss. Does your practice have adequate cyber-liability coverage in the event of a security breach?

In the case of Anthem, hackers stole personal information relating to current and former customers after breaching an IT system containing data on approximately 80 million people, the company reported. Cyber-security has become a major concern both for U.S. firms facing a barrage of attacks, as well as insurers trying to figure out how much of that risk they can afford to underwrite.

Medical identity theft is often not immediately identified by patients or their provider, giving criminals years to milk such credentials. That makes medical data more valuable than credit cards, which tend to be quickly canceled by banks once fraud is detected. “The [Anthem] information is a treasure trove for cybercriminals. It can easily be sold on underground markets within hours and used for a wide variety of identity fraud schemes,” said Stuart McClure, chief executive of cyber-security firm Cylance Inc. (Insurance Journal, 2/5)

Experts say that even in light of the Anthem and other recent breaches, it has been a challenge to convince health care organizations to step up their spending and reverse their chronic underinvestment in information technology security. Even before the Anthem data breach, there had been 1,172 breaches large enough to expose 500 or more individuals’ records, or 40.9 million individuals’ medical records in all, according to the breach list compiled by the Department of Health and Human Services’ Office for Civil Rights.

Dr. James Madara, CEO of the American Medical Association, expressed hope that the recent breaches will lead to greater security spending. Data security hasn’t made many top-five problem lists among health care organizations, Madara said. The Anthem breach “will bring some light to that. If cyber-security isn’t something that’s at the top of your list as an insurer or an integrated system, it has to get there very quickly.” (Modern Healthcare, 2/7)

In today’s data-driven world, where sensitive patient information is collected, stored, and communicated electronically, physician and surgeon practices of all sizes are especially vulnerable to costly and damaging liabilities from data security breaches. Cybercrime, including identity theft, is the fastest growing criminal activity.  Whether your data is compromised by a hacker, virus, cyber thief, or simply because of lost or stolen computers, laptops, flash drives or smart phones, the breaches can have serious ramifications. The cost to recreate compromised patient data is staggering, and includes the expense of notifying customers—now legally mandated by 46 states—possible fines, and legal expenses. Your practice can also suffer immense damage to its reputation and from the interruption to business.

Traditional liability insurance products only cover “tangible” assets. Electronic data is not considered “tangible” under the typical policy definition. Cyber-liability coverage fills that gap. There may be a small amount of coverage on a professional liability policy, but this amount can be quickly eroded. It is highly recommended that all health care offices purchase additional cyber liability coverage.

Medical Mutual offers e-MDTM cyber-liability insurance protection with up to $1M beyond the $50K automatically included in  professional liability policies for insured members. This coverage is designed for the unique network security and privacy exposures faced by physicians, dentists, medical groups, hospitals, and other health care related organizations.

Don’t be caught off guard! Contact us today at 800.662.7917 for a quote.  Additional details on e-MDTMcoverage are available at


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