By: Jenn Negley, Vice President, Risk Strategies Company
Technology plays a major role in the healthcare sector’s ability to store and handle private patient data. This has improved the efficiency of healthcare delivery, but it has also increased the susceptibility of healthcare providers to cyberattacks. The healthcare industry has witnessed a rise in cyber threats, including ransomware attacks, phishing scams, and data breaches. As a result, medical professionals need to take precautions against online threats to both themselves and their patients. A comprehensive Cyber insurance policy is one way to accomplish this.
Because medical records are so valuable on the black market, cybercriminals target the healthcare sector. The name, address, social security number, and medical history of a patient are all contained in their medical record. Medical fraud, identity theft, and other nefarious activities may be committed using this information. Healthcare professionals have a duty to safeguard the private information of their patients; otherwise, they risk legal action, government fines, and damage to their reputation.
The rising danger of cyberattacks in the medical field
The cybersecurity situation in the healthcare industry is still woefully inadequate, according to recent statistics. According to the Verizon Data Breach Investigations Report for 2025, 1,542 of the 1,710 security incidents that occurred in the healthcare sector were verified as data leaks. In a single year, over 630 ransomware incidents targeted healthcare organizations, marking a significant increase in ransomware attacks. These attacks frequently result in serious operational issues, including canceled appointments, delayed patient care, and even ambulance diversions. The healthcare sector is now the costliest industry for data breaches, with an average cost of $9.8 million, according to IBM’s 2024 Cost of a Data Breach Report. This figure encompasses both indirect costs, such as lost revenue and reputational harm, and direct costs, including the cost of the investigation and recovery.
The significance of having a good cyber insurance plan
One of the most effective ways to mitigate the risks associated with cyberattacks is through cyber insurance. Typically, incident response expenses include paying for legal counsel, recovering data, and notifying customers. Certain policies also provide companies with resources to help them prevent attacks, such as risk assessments and staff training.
Cyber insurance plans vary from one another. Many healthcare providers assume that the cyber insurance bundled with their medical malpractice insurance will cover them in any instance. Regretfully, this isn’t always the case.
Bundled Cyber Insurance Drawbacks
When offered as a “bells and whistles” supplement to medical malpractice insurance, cyber insurance frequently falls short in a few critical areas:
• Coverage Gaps: Some cyber incidents, like ransomware attacks and phishing scams, might not be covered by these policies. For example, although thirdparty vendor data breaches make up 15% of all incidents, a policy may not cover them.
• Inadequate Limits: Bundled policies frequently have coverage limits that are not enough to pay for the entire cost of a significant cyberattack. Given that a ransomware attack typically costs $1.85 million, healthcare providers are at risk when they have a policy with a $500K limit.
• Absence of specialized assistance: Bundled policies might not grant access to specialized cybersecurity tools, like those employed by ransomware negotiators or forensic investigators. This can lengthen the time it takes to respond and make an attack more powerful overall.
• Regulatory Fines Exclusions: Many policies don’t cover fines and penalties for regulatory infractions, like those under HIPAA. The United States Department of Health and Human Services fined $12.84 million for data breach-related HIPAA violations in 2024 alone.
The Path Forward: Comprehensive Cyber Insurance
To fully protect themselves against the growing threat of cyberattacks, healthcare providers must acquire customized cyber insurance policies tailored to their specific needs. These regulations ought to have:
• Broad Coverage: Verify that the policy includes coverage for a variety of cyber incidents, such as phishing, ransomware, and breaches by third parties.
• Sufficient Limits: Select coverage amounts that account for the possible expenses of a significant cyberattack.
• Regulatory Compliance: Provide coverage for penalties and fines associated with data breaches.
• Specialized Resources: Legal advice, forensic investigators, and cybersecurity specialists are available.
Because cyber threats are constantly evolving, healthcare providers must be proactive in safeguarding both their patients and their organizations. Having medical malpractice and cyber insurance alone is no longer sufficient. Purchasing comprehensive standalone cyber insurance can help healthcare providers reduce the operational and financial risks associated with cyberattacks.
For more information, please contact Jenn Negley, Vice President, Risk Strategies, at 267-251-2233 or JNegley@RiskStrategies.com.