Healthcare in the Age of Data
Cyber Insurance and HIPAA Fines: Making Sure You're Covered

When HITECH New browser window icon. was passed in 2009, most businesses were aware of cyber threats. Years later, we've seen countless news stories about data breaches, software vulnerabilities, and cyber attacks. Not only are these threats more common, but the penalties for a data breach have increased under HIPAA New browser window icon. and HITECH.

With million-dollar fines and expensive data breach lawsuits, it only makes sense that healthcare businesses work to prevent a data breach on their network and be prepared for its cost. That's why there's Cyber Insurance.

Cyber Liability Insurance (also called Data Breach Insurance) can be a lifesaver for small healthcare companies and contractors because it shields you from the cost of breaches and can sometimes even pay HIPAA fines.

Does Cyber Liability Insurance Cover HIPAA Fines?

Does Cyber Liability Insurance Cover HIPAA Fines?

Unfortunately, the answer to this question is maybe. Cyber Liability Insurance can cover HIPAA fines, but not always. It depends on the language in your insurance policy and the nature of the HIPAA violation.

Because Cyber Liability Insurance covers data breaches, it may cover some HIPAA fines from digital security problems, cyber crime, and hacking. Other HIPAA violations — like lost physical records — don't have to do with you network or computer and are less likely to be covered.

So how do you know if your Cyber Liability Insurance covers HIPAA fines? The best way to get this coverage is to be proactive when you talk with your insurance agent. Ask your agent whether the Cyber Insurance policies you're considering have coverage for HIPAA violations.

You should also be aware that if Cyber Liability Insurance covers a HIPAA fine, it might have a "sublimit." Your policy may offer $1 million in coverage, but only a $200,000 HIPAA sublimit, which means you'll only be able to spend $200,000 of your policy coverage on HIPAA fines and violations.

What Does Cyber Insurance Cover for Healthcare Companies?

What Does Cyber Insurance Cover for Healthcare Companies?

Cyber Liability Insurance is a relatively new type of insurance policy. That means that from one carrier to the next, coverage can vary significantly. Not all insurers will cover HIPAA fines in their policy.

So what should a healthcare company expect from their Data Breach Insurance? This policy typically covers:

  • Contacting customers after a breach of private information.
  • Hiring IT forensic specialists to investigate a possible breach and figure out where the leak occurred.
  • PR / marketing professionals to handle your response to the breach.
  • Credit monitoring for patients whose records were exposed.

When you get an insurance quote (you can use our quick online insurance application), an agent specializing in insurance for allied health businesses will contact you. You can talk with insureon's agents and ask which policies, if any, cover HIPAA fines.

The benefit of working with insureon's agents is that they specialize in insurance for healthcare companies, therapists, nurses, and medical technicians. We know that you face different cyber liabilities than other businesses, and you'll need stronger coverage to protect your business. If you have any questions about your coverage, don't hesitate to talk with an insureon agent.

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