If you are in healthcare industry managing PHI, then a single security breach can cost millions. With the large numbers of patients or insured customers, the potential cost of a breach can be very high. In such a case, you should opt for network security or privacy loss insurance. What started with just a few specialist insurers, like Lloyds of London, has gone up with more than 15 companies offering coverage for security breaches, as well as brokers who can help you find the right coverage.
Insurance against security breaches covers two main areas. First-party coverage protects you against the direct costs suffered by your business, including potential fines, productivity loss, financial damage and even PR expenses. Third-party coverage protects you against costs incurred for damage to third parties, such as virus damage or identity. Healthcare and insurance companies are buying these policies to cover the residual risk of a breach that reveals HIPAA protected information.
When going for this type of insurance, you need to first figure out how much coverage is needed. The potential loss depends on the number of records of sensitive data, the regulatory framework and the company’s existing security infrastructure. Coverage can be secured for a few thousand dollars, offering protection against losses in the $1 million to $5 million range. Special policies can be tailored for more coverage.