The Healthcare Industry and Data Breach Insurance

The Healthcare Industry and Data Breach Insurance

The healthcare industry has many risks and exposures and the threat of a data breach has become a major concern industry-wide. According to the study “Ponemon Report on Patient Privacy & Data Security” published in March 2014 by the Ponemon Institute, cybercriminal attacks on healthcare organizations have increased significantly.

When it comes to medical records and other personal information, the digital identity of millions of people is at risk from an ever-increasing number of cyber threats that are only becoming more and more sophisticated. Each and every year, data breaches expose million of patient records that end up being used by cyber criminals for profit and other illegal activities. Data breach insurance is one way to help reduce the losses for hospitals and other medical outlets.

Medical records have become a prime target

Criminals have a raised awareness of the value of medical records, making this type of data attractive to hackers and cyber thieves. In addition to the financial and reputational effects on the targeted company, the effects of a data breach in the healthcare industry could also be dramatic for the patients due to the nature of the data disclosed. According to many experts, medical identities are precious commodities on the black market, often found to be more valuable than financial identities.

For example, individuals’ identities could be stolen directly from hospitals and healthcare insurance companies, as well as from any system that manages medical records. It is estimated that nearly 30 million Americans have had their personal health information breached or accidentally disclosed since 2009, and the number is likely to continue to grow.

In 2013, the number of major data breaches of medical records, (also called protected health information), was 804, affecting over 29.2 million patient records. Those figures were likely due to the migration process from paper-based files to electronic health records (EHR) that has occurred in recent years.

A growing number of healthcare institutions have adopted health records systems, a move encouraged by the government and made attractive by several advantages for the adoption of such systems, and in light of the fact that the number of EHR systems has more than tripled in the last 5 years. Cyber threats are not going to disappear anytime soon, so speak to your clients about the advantages of having data breach insurance to deal with these illegal acts.